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Market - AfH tissue

SCA is the world’s largest supplier of AfH tissue with the global brand Tork. The AfH segment comprises institutions and companies, including care institutions, offices, universities, industries, restaurants, hotels and venues for which SCA develops and sells complete hygiene solutions, including toilet paper, paper towels, napkins, hand soap, hand lotion, hand sanitizers, dispensers, cleaning and wiping products, sensor technology, service and maintenance. The products are distributed by distributors and service companies.

SCA is the market leader in Europe and holds a market share that is about double that of the second largest player. Following the acquisition of Wausau Paper Corp., which was completed on January 21, 2016, SCA is the second largest supplier in North America. SCA’s market position is particularly strong in foodservice in North America, where approximately every second napkin is supplied by the Group. SCA also holds strong positions in emerging markets, such as Russia and Colombia, where it is the market leader.

The global brand Tork provides significant synergies since the difference in customer requirements is minimal in regard to tissue and dispensers in the various parts of the world.

Strategy

SCA is prioritizing activities to strengthen Tork’s global market-leading position through profi table growth, expanding at a faster rate than the market and growing to become a market leader in North America.

SCA is focusing on increasing customer satisfaction and loyalty by helping its customers to be more effi cient and environmentally friendly and by improving hygiene standards. Great emphasis is on sustainability. For example, SCA relaunched Tork SmartOne® with a new design and new functions in 2016. Tork SmartOne® is a toilet paper solution designed for use in demanding environments, such as schools, hospitals, stadiums and airports.

These public places often have washrooms with high traffic where stringent demands are placed on cost control and good hygiene. Consumption of toilet paper can be reduced by up to 40% compared with traditional jumbo roll dispensers. The single-sheet dispensing system also improves hygiene and reduces the risk for pipe blockages.

In 2016, SCA worked on the integration of Wausau Paper Corp. The acquisition is an excellent strategic fit for SCA and strengthens SCA’s presence and production capacity in North America. The Wausau Paper product portfolio complements SCA’s offerings in North America. The acquisition is expected to generate annual synergies of approximately USD 40m, with full effect three years after closing. Synergies are expected in sourcing, production, logistics, reduced imports, increased volumes of premium products and reduced SG&A costs. The restructuring costs are expected to amount to a approximately USD 50m.