Mark Buthman knows Kimberly-Clark from the inside out. In fact, he laughs, “it’s the only real job I’ve ever had.” Given that he went straight from college to the company, in 1982, the 48-year-old CFO isn’t kidding. Over the past 27 years, Buthman has held a number of positions at the $19.4 billion health and hygiene consumer-goods company — mostly in financial analysis, but also including a stint as the head of a small tissue mill (“to get some operating experience”) and “doing a lot of M&A in the 1990s,” as the company changed its portfolio of businesses. He became finance chief in 2003.
Today, as cash-strapped consumers turn to private-label goods, Buthman is preoccupied with improving margins and lowering working capital; the latter effort has helped the company increase cash flow more than 40% in 2009.
Buthman says the maker of Kleenex tissue, Huggies diapers, and other products is committed to sustainability, and he’s not just paying lip service to the cause du jour. In August, Kimberly-Clark said that it was adopting stronger standards for obtaining wood fiber from environmentally responsible sources — standards developed with the help of environmental group Greenpeace, which agreed to drop its “Kleercut” campaign against the company.
Greenpeace doesn’t make peace with many companies, yet it recently gave its blessing to Kimberly-Clark’s efforts. How did that come about?
Wood fiber is our largest raw-material input. We’ve had an ongoing dialogue with Greenpeace and some NGOs [nongovernmental organizations], resulting in a new fiber-procurement policy — increasing recycled content, moving to even more certified forestry. There is an emphasis on protecting old-growth forests.
Was there shareholder pressure behind this?
Certainly there are some shareholders for whom this issue is front and center on their agenda, but that wasn’t a driving force behind our actions.
Are your sustainability efforts focused only on forestry issues?
No. Since 1995, for example, we’ve had [successive] five-year plans for trying to eliminate manufacturing waste sent to landfills. We look at everything from how to turn diaper [manufacturing] waste into fuel for boilers to how to use the output from tissue production as a soil additive. In many countries where we operate, the water that we discard is cleaner than the water we take in.
Sustainability is an important part of our culture. Dow Jones [the Dow Jones Sustainability World Index] recently named us the sustainability leader in the personal-care space for the fifth year in a row.
Let’s talk about a different kind of sustainability: sustaining sales growth. It isn’t easy in this economy as consumers spend less and shift to generic products. How do you protect and grow your brands?
It’s about having the best products on the shelf every day, at a competitive price. We compete, basically, in eight categories; we invented five of those eight. There’s typically a technology underpinning or an innovation underpinning to all of our products. Depending on the market, we have a range of products, from value-oriented all the way to premium.