Three Years Plan 2019 – 2021

KIMBERLY-CLARK PROFESSIONAL
INDONESIA

Abdus Samad
Sri Dewi Widjaya
Fhadli Muhammad Kunt
Muhammad Mazidun Niam
External Environment

• Regulatory

• Keputusan Menteri Kesehatan Republik Indonesia no. 942/MENKES/SK/VII/2003,

regulates the application of HACCP and Food Hygiene Program to Catering & Food Service
by the Health Department of Indonesia.

• Import tax may vary each year referring to Buku Tarif Bea Masuk (BTBM)

• Surat Edaran Kepala Badan Renbang tahun 1998 regulates the Guidelines of Workers’ Safety
in the industrial sector

DRAFT 2
External Environment – Competitive

Main Goal Main Goal Main Goal Main Goal

■ Increase market share or ■ Increase market share and ■ Increase market share and ■ Increase market share and
profitability? profitability profitability profitability
■ Use cutting edge technology in
the development of new
products and mill efficiency
Products Products Products Products
■ What are the key brands? ■ LIVI,Toply ■ See - U ■ TYVEK®
■ Locally produced or ■ Locally produced ■ Locally produced ■ Imported from China
imported? ■ Factory locations: Lontar ■ Factory location: Surabaya
■ If locally produced, add Papyrus (Jambi) for non-brand, ■ Estimated capacities: 15.000
factory locations and Pindo Deli 1 & 2 (Krawang) for tonnes / year
estimated capacities LIVI, converting facility in Deli
Serdang (North Sumatra)
■ Estimated capacities: over
72,000 tonnes (tissue only)
Distribution Distribution Distribution Distribution
■ How do they distribute ■ Via distributors (Business to ■ Direct selling and via agents / ■ Via agents & distributors
products? How many business) suppliers ■ 12 distributors
distributors that they have? ■ Exclusive B2B: 12 distributors ■ Exclusive B2B: 0 distributors

Promotion Promotion Promotion Promotion

■ How do they advertise? ■ Approach to Associations ■ Exhibitions ■ Exhibitions
Strong in print or electronic? ■ Exhibitions ■ Seminars & Trainings
Estimated 2006 spending? regarding Safety
Internal Assesment - KCP Current Portfolio

• Tisssue Products
Facial Tissue, Toilet Tissue, Food napkins

• Safety Products
Wipers, industrial skin cleansers, safety apparels, gloves, glasses
KCP Geographic Profile by Value

Distribution of products in value is highest in Jabotabek area,

followed by other Java regions
KCP Demographic Profile by Value
Distribution of products in value is highest in Lodging Segment, followed
by Food Service

28% 23% FOOD 17% OFFICE

HOTEL SERVICE BUILDING

9% 20% 3% ENTERTAINMENT
HEALTHCARE MANUFACTURING & EDUCATION
Porter’s 5 Forces Model
Barriers to Entry Supplier Power
Tissue Tissue
• High capital costs to have paper mill/converting facilities
• Pulp is a commodity. Pulp price tends to increase
• Bulky product nature impacts to high freight &
warehousing costs
• Commodity product, lack of product differentiation result
in competitive pricing
• Many competitors/player in the market
Safety Safety
• Relatively low awareness for hygiene and safety issues • Suppliers fully control the price for exported products
• Competitive price – low price from non brand items • Not flexible in delivery due to long distance, and
especially in safety segment forecasting due to growing market
• Need to pass international standard and availability of
technical data especially for safety products
• Established good connection with suppliers/agents and
distributors
Porter’s 5 Forces Model
Bargaining Power of Buyers Intensity of Rivalry

Tissue Tissue
• Lack of product differentiation & manufacturer • Diverse & aggressive competitors
need volume to sustain
• Lack of product differentiation
• Cost reduction program • Driven by filling up machine capacity

Safety Safety
• Needs for some specific products to meet • Pararel importer
specific requirements & qualifications • E-trading
• Cost reduction program • Diverse and aggresive competitors (3M, non
brands)
Porter’s 5 Forces Model

Threat of Substitution

Tissue
• Water
• Napkin cloth
• Air blowers for towel
• Hand sanitizer

Safety
• Rags, cotton towel, kanebo for our disposable wipers
• Solar, cream soap & water for our industrial skin cleanser
• Leather jacket for apparel, nylon gloves for our general use gloves and normal latex for
chemical resistant gloves
SWOT Analysis

Strengths Weaknesses
•World-wide image and strong brand positioning in •High COGS for converted products leads to low
B2B industry margins
•Strong visibility in public places which acts as •Easy-to-emulate format of tissue, which breeds
advertising me-too competitor products
•One-stop shopping place for washroom (from •Tissue is increasingly seen as a commodity,
tissues, seat covers, air fresheners, to hand soap) which makes customers aim for lowest prices
instead of quality or brand
•International certifications such as HACCP
•Longer product launch to market
•Environmentally safe (Chlorine free, non- •Delayed arrival of imported products leads to
petroleum based, sustainability policy (fiber OOS
procurement, etc)
SWOT Analysis

Opportunities Threats
•Untapped market: DIY •Local players such as APP (Sinarmas), and Suparma,
•Association with premium goods and properties; who own tissue manufacturing companies copy our
establishments that don’t compete in price tissue with good quality and low prices
(restaurants, lodgings, private jets). •International players like SCA (TORK) have also
Co-operation with FMC on joint exhibitions, entered the Indonesian market; especially Healthcare
etc with similar washroom offerings
•New segments: Theme parks & water parks, •3M and other non-brand products from Taiwan &
funerals and crematoriums, night entertainment, China in workplace & safety category
gas stations
•Replacing rags for wiping tools
•Heightened customer’s awareness of hygiene,
safety and environmental issue leads to product
needs
Important attributes in B2B market

SERVICE

PRICE 1
CUSTOMER
RELATIONSHIP
2
QUALITY
3
BRAND
4
5
KCP – Objectives & Key Issues

Objectives

•To achieve Gross Profit of IDR 12.098 Mio in 2021

•To achieve Net Profit Before Tax of IDR 484 Mio in 2021

Key Issues
Mill Performance; high COGS, due to high waste, inconsistent quality
Issue # 1
Issue: Mill Performance

Strategies, timing and targets:

1. Having consistent hard roll quality and reduce process waste

Targets: to achieve COGS 70%
Timing: 2019 - 2021

2. Approved schedule & costs of maintenance plan

Targets: reduction of maintenance costs by 30%
Timing: 2019

3. Costs Allocation
Targets: mill warehouse allocation based on volume utilization,
Timing: 2019

Resources Required:
• Independent Operational Audit
• Chemical Formula Data Release or sourcing the right chemical composition from Regional Office
KCP – Summary of Strategies

Improve Mill performance to achieve Tissue products’

COGS of 70%, while still improving product quality
KCP – Financial Performance

2018 2019 Fluctuation 2019 - 2018 2020 Fluctuation 2020 - 2019 2021 Fluctuation 2021 - 2020
Account Balance
Actual Budget IDR % Budget IDR % Budget IDR %

Net Sales 18.000 26.000 4.000 22% 28.900 5.198 24% 32.456 5.013 18%

COGS 13.056 15.345 2.289 18% 17.456 2.111 14% 20.113 2.657 15%

Gross Profit 4.944 6.655 1.711 35% 9.742 3.087 46% 12.098 2.356 24%
Sallary, allowance, and
training 3.750 3.890 140 4% 4.000 110 3% 4.357 357 9%

Marketing and Sales Expense 2.500 3.000 500 20% 3.250 250 8% 3.467 217 7%

General and Administrative 4.987 3.500 (1.487) -30% 3.679 179 5% 3.790 111 3%

Net Profit Before Income Tax (6.293) 265 2.558 -41% 515 2.548 -68% 729 1.671 -141%

Ratios

Profitability 2018 2019 2020 2021

Gross Profit Margin (GPM) 27% 41% 36% 38%

Net Profit Margin (NPM) -35% 1% 2% 2%

COGS Percentage from Net Sales 73% 70% 64% 62%

KCP – Mill Performance

2018 Actual 2019 Target 2020 Target 2021 Target

Roll
Actual Total Expectation Actual Total Expectation Actual Total Expectation Actual Total Expectation

Waste total 10,49% 2,42% 6,07% 1,72% 5,60% 1,68% 4,98% 1,36%

Delay 15,69% 14,70% 13,90% 12,10%

Realibility total 71,85% 78,84% 75,85% 78,34% 74,96% 77,90% 73,56% 76,34%

2018 Actual 2019 Target 2020 Target 2021 Target

Folded
Actual Total Expectation Actual Total Expectation Actual Total Expectation Actual Total Expectation

Waste total 3,89% 2,45% 3,04% 1,94% 2,87% 1,76% 2,34% 1,35%

Delay 19,40% 17,36% 16,86% 15,36%

Realibility total 77,81% 78,98% 80,12% 81,04% 79,85% 80,76% 77,99% 79,20%
Thank You. . . . . . . . 