Confirming a future for a century-old plant whose fate had been in doubt, Kimberly-Clark Corp. said Friday it will invest more than $150 million in its Chester mill, which makes Scott 1000 toilet paper.
The plant, once the flagship mill of Philadelphia's former Scott Paper Co., employs around 600, said spokeswoman Julia Bonner. Hourly workers are members of the United Steelworkers Union. The workforce is down from more than 800 in 2011 amid cost-cutting as Kimberly-Clark sought to make its commodity products "more efficient," Bonner said. She added that the improvements won't affect future job levels.
The money will go to replace Kimberly-Clark's coal-fired power plant over the next three years "with a more econ-friendly and efficient natural gas-fired plant," the Dallas-based paper company said in a statement. Kimberly-Clark has been updating its U.S. plants, said Adrian Poretti, vice president of supply chain.
Sweetening the deal is a $6 million matching grant from Pennsylvania's Redevelopment Assistance Capital Program (RACP), which the Wolf administration disclosed in December 2017 under the name "Jericho 1," leaving local politicians to take credit for the money going to Kimberly-Clark. The company confirmed Friday that the grant will go to its power plant replacement project and other improvements.
Kimberly-Clark earned after-tax profits of over $3 billion last year, on sales of $18 buillion.
Would Kimberly-Clark have closed the plant without $6 million from taxpayers? "We understand the speculation as a result of our Global Restructuring Plan, but as a matter of practice, we do not comment on rumors and speculation," said spokeswoman Bonner.
"We are tremendously grateful to Kimberly-Clark for making such a substantial investment in our state," State Sen. Tom Killion (R., Delaware) said in a statement. State Rep. Brian Kirkland (D., Delaware) promised "cleaner air" as burning natural gas replaces burning coal at the plant's cogeneration facility.
Kimberly-Clark, which also makes Huggies diapers, Kotex tampons, and other products, has been updating its U.S. plants at the same time it's been shaving a half-billion dollars from its yearly spending by cutting materials, energy, and administration costs, chief financial officer Maria Henry told investors in the company's midyear conference call in July. "We will continue hitting the cost structure hard," but "we are not reducing the fundamental investment in our business," and plan to add new products over the next year.
Like wallboard, asphalt, or mattresses, toilet paper is a cheap, bulky product that is still manufactured locally around the U.S. as higher-value manufactured goods have consolidated to high-tech factories or moved to cheaper foreign countries.
Delaware County's other surviving manufacturing industries include the military aircraft plants at Boeing's Ridley Township complex. In the early 2000s, Boeing completed a $130 million update of its Chinook helicopter plant on the Delaware River, which makes transport and fighting craft for the Army and for foreign military forces.
Boeing now plans to invest $100 million moving production of its V-22 Osprey vertical take-off and landing war aircraft from its current location next to I-95, across Industrial Highway, to a vacant 230,000-square-foot high-rise industrial building, next to the helicopter plant and the Delaware River.
Pennsylvania has given that effort at least $1.25 million in RACP grants so far, though that's a fraction of the $30 million in state money that Boeing applied for.
The Osprey project will include new "air rotation" units for heating and air-conditioning, electrical substations, fire suppression, utility connections along the production line, a paint facility, level floors, doors, and a cafeteria, all supporting 300 workers.