It is too early to say how Singapore will be affected by Kimberly-Clark's worldwide business shake-up, according to the consumer giant's regional head.
But the company's role in Singapore is still expected to keep growing, Mr Achal Agarwal, president of the Asia-Pacific consumer business, told The Business Times in an e-mail last Friday.
New York-listed Kimberly-Clark shocked the market when, alongside the announcement of its full-year results last Tuesday, it unveiled a scheme to slash costs and simplify the manufacturing supply chain.
As part of the initiative, about 10 factories are expected to be sold or closed, while production capacity will be beefed up at "several others".
Between 5,000 and 5,500 people will be laid off - or 12 per cent to 13 per cent of the multinational's headcount.
It said in its announcement that the move "is expected to broadly impact all of the company's business segments and organisations in each major geography".
When asked about the impact to the Republic, Mr Agarwal said Kimberly-Clark will not provide specifics on job cuts or the status of production facilities "until final decisions are made and announced".
Kimberly-Clark had reported an operating profit for the fourth quarter of last year of US$812 million (S$1 billion) - a drop from the US$839 million in 2016. For the full year, the company reported an operating profit figure of close to US$3.3 billion.
Singapore houses Kimberly-Clark's Asia-Pacific headquarters, and more than half of its roughly 250 employees here work at a plant in Tuas.
The facility makes Huggies nappies, baby wipes and pull-up pants. Other brands in the Kimberly-Clark portfolio include Kleenex tissues and Kotex menstrual products.
An expansion of the Tuas factory in 2016, when two advanced production lines were added, brought Kimberly-Clark's investment in the country to $400 million in all.
Mr Agarwal told BT that the global restructuring programme is expected to bring improvements in areas such as digitalisation and e-commerce.
"The Asia-Pacific, as a key contributor to global growth, will be a key focus for these opportunities," he said.
It is Kimberly-Clark's second-biggest region, after the company's home market in the United States.
"We foresee our presence and involvement in Singapore only growing deeper and broader in the future," Mr Agarwal added.
The global restructuring is expected to yield annual cost savings of US$500 million to US$550 million by the end of 2021.
Chairman and chief executive Thomas Falk also said in a statement that "it will make our company leaner, stronger and faster".
But there was domestic outcry after chief financial officer Maria Henry intimated in an earnings call that the cost of the restructuring would be partially cushioned by gains from the recent corporate tax overhaul.
Kimberly-Clark later issued a statement saying the decision to restructure was made independently of the tax reform. It said it "remains committed to American manufacturing" and is planning "significant capital investments" in its operations in the US.
