Photo: Marie-France Coallier The Duty
Kruger products, known for its trademark Cashmere, Scotties and SpongeTowels, control almost one-third of the market for toilet paper and tissue paper in Canada, and about 20% of the paper towels.
When the photos of the packed grocery store full of toilet paper and paper towels and began to circulate at the beginning of the pandemic, the Products group Kruger S. E. C. was already of the feet and hands to increase production in its factories, but the company has also had to resort to a second strategy to respond to the outbreak : turn to its own reserves.
Six weeks after these images of tablets hair loss and limits sudden banning customers from buying more than two packages at some grocers, the boss of the company, known for its trademark Cashmere, Scotties and SpongeTowels, took advantage of the publication of financial statements Friday for telling financial analysts how the company is taking to tackle the rush.
“In front effect suddenly like that, of course, you are going to reduce your inventory. You can’t react fast enough, ” said Dino Bianco, chief executive officer of Kruger Products (KP), but also of KP Tissue, the publicly traded company which owns approximately 15 % of KP. The company has also found ways to increase its production, for example by giving some interviews to the non-essential later, restarting of the machines idle and with the use of the additional workforce.
“And the most important thing is that it has reduced the number of SKUS [stock keeping units, or distinct products that it manufactures, so as to limit the number of changes in the production lines so that they work more efficiently,” added Mr. Bianco.
As to how and when consumers will reduce their inventories to return to normal, it will depend on their confidence in the supply chain
— Dino Bianco
Kruger products control about one-third of the market for toilet paper and tissue paper in Canada, and about 20% of the paper towels. The company operates facilities in Quebec, Ontario, British Columbia and Memphis. On average and across all categories, it is believed that consumers have bought products for three to five weeks of use, although some have gone well beyond that.
“As to how and when consumers will reduce their inventories to return to normal, it will depend on their confidence in the supply chain. As and to the extent that they will go into stores and see shelves stocked, it will reassure them about the stability of the channel. I think it will be done slowly throughout the year, ” said Mr. Bianco, who has also named the evolution of the pandemic as a factor.
Revenues were $ 375 million in the first quarter, up 7 % compared to last year. Excluding the activities of Mexico, which are no longer part of the company, the increase is 15.5 %. The profit before taxes and other items increased from 24 million to 51 million. The net income amounted to $ 8.4 million, compared to a loss of $ 3.2 million in 2019.
The sales have also increased in the category of products ” out of focus “, whose buyers include commercial establishments or public, such as restaurants, hotels, etc However, this niche “will be faced with strong headwinds as markets end-users have been severely affected by the COVID-19,” said Kruger Products.
The action was absorbing the shock stock in the month of march, but has already returned to its level of the end of the month of January. She finished Friday’s session down 2 %, to 9.97 $.
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