Kimberly-Clark Announces Global Innovation Centers in Korea and Columbia
In a bid to significantly expand its global product innovation capabilities, Kimberly-Clark (NYSE:KMB) has announced plans to establish a Global Innovation Center in Bogota, Colombia, closely following the announcement of a similar one in Korea in July 2011. Kimberly-Clark competes with Procter & Gamble (NYSE:PG) and Unilever (NYSE:UL) as well as with other personal care companies including local players as well as supermarket private labels. It holds the No. 1 or No. 2 market share positions in over 80 of the 150 countries in which it sells its personal care products while touching the lives of nearly a quarter of the world’s population.
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These facilities in Korea and Colombia are in addition to Kimberly-Clark’s North American facilities in Neenah, Wisconsin and Roswell, Georgia.
Columbia Facility To Focus On Products For Emerging Markets
The Columbia Global Innovation Center located in Bogota and the first of its kind in Latin America will develop new products especially targeting the high-growth emerging markets. The facility will focus on product development with a favorable cost structure. With a rise in household disposable incomes in emerging economies as well as the rapid increase in demand for consumer goods such as baby diapers and female hygiene care, the facility will help Kimberly-Clark tap the increasing consumer demand in the relatively unsaturated Asian and Latin American markets.
Kimberly-Clark currently has five manufacturing plants in Colombia that cover all product sectors. The Columbian facility will also benefit from strong support from the Colombian government which is focusing on developing the hygiene sector.
Korean Facility To Focus On Product-Innovation For Developed Markets
With close proximity to the key Korean market, the Global Innovation Center based in Korea will help accelerate the development and introduction of innovative products, especially targeted at the developed markets. It will primarily focus on product development in the premium category that commands higher profit margins. Korea produces and markets all major Kimberly-Clark products and provides an ideal location for product innovation with quick feedback from the demanding Korean consumers that adopt new products quickly.
Innovation to Drive Market Share Gains and Sustainable Growth
In the fast changing personal care segment, innovation is critical to staying competitive. Kimberly-Clark plans to launch new products gradually to create different product segments under the same brand in order to help drive up market share and maintain sustainable growth. It will also help develop premium products that can demand higher prices and greater margins. While focusing on innovation might require investment in the near-term, this strategy could have a more sustainable impact in terms of market share gains and higher prices and lower costs of products in general.