SCA Splits into Hygiene and Forest Products Divisions, Expands Pulp Production

 

SCA, Stockholm, Sweden, detailed in a company release this past week that it is a global hygiene and forest products company with about 85% of its sales derived from its hygiene operations. To further intensify the focus on the group’s two operations, SCA stated that it has decided initiate a dividing of the group into two divisions: a Hygiene division and a Forest Products division. In relation to the Forest Products division, all forest industry and forest land currently owned by SCA will be merged into one division. A decision has also been made to invest in increased capacity for pulp production in the forest products operation.

"SCA is a global hygiene and forest products company in which we work continuously to enhance the respective operations. The enhancement of the organization and the investment in increased pulp production will secure the long-term competitiveness of the businesses," says Magnus Groth, President and CEO of SCA.

 

The Forest Products division will encompass all forest industry operations and all forest land currently owned by SCA. The work to realize this consolidation will now begin. There are significant synergies between the forest industry and the ownership of forest land. SCA’s forest products operation has a well-integrated supply chain with production facilities concentrated in Northern Sweden in close proximity to its forest holdings. As of January 1, 2017, the Forest Products division will expand its quarterly financial reporting.

 

To satisfy the growing demand for pulp, SCA has decided to invest in increased capacity for pulp production at the Östrand pulp mill in Timrå, Sweden. The annual production capacity of bleached sulphate pulp will increase from the current level of approximately 430,000 tons to about 900,000 tons. The investment will amount to about SEK 7.8bn over a three-year period. Production is expected to commence in 2018. 

 

"A cohesive forest products operation in a single division further highlights the value created and optimizes synergies between the forest industry and ownership of forest land. Over time, the investment in Östrand will increase sales and competitiveness and create a world-class cost position and higher margins," says Magnus Groth, President and CEO of SCA.

The group has also detailed plans to enhance the hygiene operation’s organization.