Diapers and tissues maker Kimberly-Clark plans to invest over $2 billion over the next five years in the United States, just days after disclosing that tariffs could cost the company as much as $300 million.
The expansion would be Irving, Texas-based Kimberly-Clark's largest domestic investment in more than 30 years.
The company said the moves are designed to enhance its U.S. manufacturing capacity amid rising demand for its consumer products, which include labels such as Huggies diapers, Kleenex tissues, Depend incontinence products and Cottonelle toilet paper.
The imposition of worldwide tariffs has not deterred Kimberly-Clark from moving forward with its expansion efforts that had already been underway.
"We feel like the best approach to mitigate the headwinds is to reoptimize the network," CEO Michael Hsu said on the company's earnings conference call last month. "What [tariffs have] done is change the cost of different nodes of our network and change some of the operating constraints. So, we just have to rerun the model and, in my words, kind of reoptimize what our flows are."
Half of Kimberly-Clark's broad-based investment program centers on two new projects: an advanced manufacturing plant in Warren, Ohio, a suburb of Youngstown, and an expansion of a Beech Island, South Carolina, site with a state-of-the-art automated distribution center.
The plans also include an additional $1 billion in capital expenditure linked to North America supply chain upgrades.
"This landmark investment represents a strategic bet on the American consumer," Russ Torres, president of Kimberly-Clark North America, said in a statement.
The Ohio facility is slated for a more than 300-acre redevelopment site that once housed a steel plant. The company plans to spend $800 million on the plant, its first in the state.
The Warren facility, spread across more than 1 million square feet, will provide the manufacturing capacity needed for Kimberly-Clark's fastest-growing personal care categories, which include baby and childcare products and adult and feminine care, the company said. The new plant is expected to create nearly 500 jobs.
In South Carolina, Kimberly-Clark is set to add a new automated distribution center at 246 Old Jackson Highway in Beech Island, just across the border from Augusta, Georgia. The firm plans to spend $200 million to add 1.1 million square feet to the existing plant, increasing its ability to ship directly from the location.