Following a strategic global business review of its pulp and tissue assets Kimberly-Clark Corporation announced late February closure of the two oldest tissue machines at its Millicent Mill in South East South Australia. However, KC Professional premium product for both Australia and New Zealand will continue to be made at the Millicent facility. It includes Kleenex and Scott brands and covers soft interleaved toilet tissue, folded towel, rolled towel and rolled bath tissue.
“The #1 machine was installed in 1960 and is 50 years old and the #3 machine installed in 1973 is 37 years old,” Kimberly-Clark’s vice president, family care, south Asia, Milo Foster said.
“The point has been reached where these machines can no longer economically produce the quality of products demanded by today’s Australian consumers.”
Closure of the two tissue machines will mean the loss of an estimated 170 permanent jobs at the Millicent Mill. The two tissue machines will cease production by May 2011.
“The decision to restructure our Millicent operations was not taken lightly, and is no reflection on the great efforts of our employees at Millicent who have worked with us over the years to keep these assets competitive for as long as possible,” Foster stated.
The two tissue machines used paper pulp from the Tantanoola Pulp Mill as a raw material in tissue production. The loss of this end use volume makes the Tantanoola Pulp Mill uneconomical for Kimberly-Clark to continue to operate so the pulp mill will be put up for sale. If a buyer cannot be found by year end Tantanoola Pulp Mill will be closed. The mill currently employs 65 people.
“The continued high level of the Australian dollar, difficulty in maintaining a ‘level playing field’ in the tissue market with dumped product and continued high and escalating energy prices in Australia have all contributed to a rapidly deteriorating environment for commodity pulp and tissue manufacture.
“Ultimately though, the asset’s age and base technology limits our ability to respond effectively to competition, so this decision and consequent ones on pulp manufacturing have had to be made” Foster explained.
He pointed out that the company has invested more than $500 million over the past 10 years at its Australian manufacturing sites (Tantanoola, Millicent, Ingleburn, Albury), including more than $300 million at Millicent since 2002 and remains committed to Australian manufacturing to support its market leadership positions in a number of key retail categories.
The remaining two world class tissue machines and associated converting equipment will continue to manufacture Kleenex Silk Touch Facial tissue, Kleenex Cottonelle Bathroom Tissue, Kleenex VIVA Towel, Wondersoft Bathroom tissue and Thick & Thirsty Towel products as well as KC Professional premium product for both Australia and New Zealand. The Millicent Mill will continue to employ some 370 people.