Our suppliers are the companies worldwide providing the goods and services we need to run our facilities and make our products. These include contract manufacturers that produce finished products to our specifications. We use these companies to increase our manufacturing capacity or to make products that our own facilities are not equipped for or that would require a large capital investment to upgrade. In 2007, 95 percent of Kimberly-Clark’s North American cost of sales related to our own production and contract manufacturers accounted for the remaining 5 percent.

We have more than 25,000 suppliers of materials and about 100 contract manufacturers supporting our global businesses.

We prefer suppliers who share our commitment to sustainability and have the resources and expertise to help us achieve our broader goals. We expect suppliers to comply with all applicable laws, standards and codes and to enhance the sustainability of their operations. In return, we aim to treat our suppliers with honesty and respect.

We want our suppliers to benefit from our success and grow alongside us, and so have a keen interest in the welfare of their employees. We have extended some of our employee welfare programs to the packing cooperatives we use in Colombia, Ecuador and Peru. Also in Colombia, our Consumer Tissue business has run safety, health and well-being campaigns and training programs for employees of recycled fiber suppliers. This has helped boost loyalty from these suppliers in a market where recycled fiber is increasingly scarce.

In 2007, we rolled out Sustainability at K-C: Guide for Suppliers. We sent 1,000 major suppliers in North America and Europe a letter containing a link to the document on our corporate website and asked them to set sustainability objectives for 2008. We have started to hear back from some suppliers, especially those with robust programs who believe their products will help K-C meet our sustainability objectives. We are planning on translating the document to send to suppliers in other regions.

We continue to conduct risk assessments for all new contract manufacturers, following the successful introduction of this process in 2006. In late 2007, we translated our risk assessment questionnaire into Mandarin and began a pilot program to assess five existing contract manufacturers in China.