CHICAGO (Reuters) - Kimberly-Clark Corp (KMB.N) will raise prices on diapers, toilet paper and baby wipes as much as 7 percent later this year due to soaring raw material and energy costs.
The company is not raising prices on its well-known Kleenex tissues or its Viva and Scott paper towels, Kimberly-Clark said on Thursday.
Among household products makers, Kimberly-Clark is the most exposed to pulp costs as a large chunk of its business comes from tissues, toilet paper, paper towels and diapers. It is also absorbing higher polymer resin and gasoline costs.
Wood pulp prices rose 17 percent in February from a year earlier, according to U.S. producer price index data released on Wednesday.
Kimberly-Clark’s material and energy costs went up $790 million in 2010, which was an all-time high. In January, the company predicted that costs would rise $200 million to $250 million this year and be fully offset by cost-cutting. It did not update that forecast on Thursday.
Prices in the United States and Canada for Huggies baby wipes and diapers, Pull-Ups training pants and GoodNites youth pants will rise 3 percent to 7 percent, on average. The U.S. price for Cottonelle and Scott 1000 toilet paper will go up about 7 percent.
The price increases will be taken in the second and third quarters of 2011, starting on June 19.
North American sales of the products affected by the price increases topped $4 billion last year.
The price increase comes about three years after Kimberly-Clark raised prices by 6 percent to 8 percent on Huggies, Pull-Ups, Cottonelle and Scott, Viva towels and Kleenex amid rising costs in the third quarter of 2008.
Kimberly-Clark announced plans in January to get out of the business of making the pulp used in its paper products, an overhaul that involves streamlining, selling or closing five or six manufacturing facilities.
Shares of Kimberly-Clark rose 1 percent to $63.90 in morning trade.
Reporting by Jessica Wohl, editing by Gerald E. McCormick, Dave Zimmerman