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Kimberly-Clark To Raise Some Product Prices

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Kimberly-Clark products, including Huggies diapers, sit on display. (credit: AP Photo)

Kimberly-Clark products, including Huggies diapers, sit on display. (credit: AP Photo)

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DALLAS (AP) – Kimberly-Clark Corp. is raising prices for products including diapers and bathroom tissue as the maker of Huggies diapers and Cottonelle tissue tries to deal with increasing costs for raw materials.

Other consumer product companies such as Colgate-Palmolive Co. and Procter & Gamble Co. have recently indicated that they are also likely to boost prices.

Kimberly-Clark’s announcement comes the same day that the Labor Department said consumer prices climbed in February at the fastest pace in nearly two years. The results showed Americans paid more for food and gas, but that outside those categories inflation was tame.

Kimberly-Clark said Thursday it will raise prices in North America for its baby, child care and consumer tissue businesses during the second and third quarters. The Dallas company is facing rising costs for wood pulp and oil, major materials for its products.

Prices for items including Huggies diapers and baby wipes, Pull-Ups training pants and GoodNites youth pants will rise 3 percent to 7 percent on average in the U.S. and Canada. Prices for Cottonelle and Scott 1000 bathroom tissue will likely rise by about 7 percent in the U.S. Price changes vary by brand and pack size.

In January, Kimberly-Clark unveiled restructuring plans to deal with higher costs. The restructuring includes plans to streamline, sell or close five or six plants. The company expects the restructuring of its pulp and tissue businesses, which will be done over two years, to cost $280 million to $420 million.

The company plans to shed some products, mostly nonbranded items, and transfer some production to lower-cost plants to boost profitability. Kimberly-Clark is dealing in part with competition from less-expensive store brands, which increased during the economic downturn.

Many shoppers are still trading down to cheaper items as they contend with high unemployment and a dismal housing market.

Kimberly-Clark, whose other brands include Kotex and Depend, said North American revenue for its baby, child care and consumer tissue products came in at more than $4 billion last year.

The company’s stock added 54 cents to $63.80 in morning trading.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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