Of the fiber used in all products manufactured by K-C and our equity affiliates in 2007, about 31 percent was recycled. We used around 36 percent recycled fiber in our tissue products. We bought 92 percent of virgin fiber from suppliers, and made the remaining 8 percent in our own mills in Everett, Washington, U.S. and Tantanoola, Australia from wood chips bought from suppliers.

For the year 2007, 97 percent of the wood pulp, timber, logs and wood chips we purchased for manufacturing in our facilities came from suppliers certified to one of the five schemes listed in our fiber procurement policy. Seven pulp suppliers, accounting for the remaining three percent of virgin fiber purchases, were not certified, although they do practice sustainable forest management and most plan to certify their woodlands or fiber procurement activities. We audit all our fiber suppliers every three to four years.

Fiber procurement results

In 2007, we assessed 14 forestry suppliers to verify compliance with our fiber procurement policy. All 14 suppliers have had their forestlands or fiber procurement activities certified to one of the five sustainable forestry schemes specified in our policy. The assessments did not identify any major areas of non-compliance with our fiber policy. Two of these suppliers are working toward the Forest Stewardship Council (FSC) Chain-of-Custody certification in addition to the certification schemes they already have in place.

We have made good progress on the commitments we made in our 2006 sustainability report regarding fiber procurement. Here is a brief update:

• We have completed an independent life-cycle assessment with a leading environmental consultant, Environment Resources Management (ERM), to compare the environmental impacts of using virgin versus recycled fiber in our tissue products.
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• We continue to review our global fiber purchases to verify compliance with our policy using supplier questionnaires and audits
• We continue to report publicly on compliance with our fiber procurement policy
• We engaged with non-governmental organizations with an interest in forestry and related organizations including the FSC, Greenpeace and the WWF.

In November 2007, Kleenex brand facial tissue in the U.K. became our first FSC-labeled product. Andrex bath tissue is expected to follow in 2008. We also produce FSC-certified product for some of our major retail customers in the U.K., including Sainsbury’s supermarkets.
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K-C joined the WWF-UK Forest & Trade Network (FTN) in December 2007. Founded in 1991, the FTN is a partnership between WWF and businesses that promotes responsible management of the world's forests. Members commit to tracing their timber and paper products back to the forest source.

We will continue to strengthen our fiber procurement practices in 2008. Our goals are to:

• Continue to work toward 100 percent certification for our fiber suppliers
• Continue to work toward increasing the available supply of FSC-certified fiber, and the amount of FSC-certified fiber that we purchase
• Audit 20 of our fiber suppliers
• Communicate our progress publicly
• Share best practices with the WWF-UK FTN.