SCA is a global leading consumer tissue and Away-From-Home (AFH) tissue company. The consumer tissue product portfolio comprises toilet paper, kitchen rolls, facial tissues, handkerchiefs and napkins. Products are sold both under own and retailers’ brands. In the AFH product segment, encompassing hospitals, large workplaces, restaurants and hotels, SCA develops and markets complete hygiene solutions comprising dispensers, tissue, soap, service and maintenance.
SCA produces tissue at 55 plants in a total of 23 countries. The manufacturing processes and logistics are optimized through continuous improvements, investments in more efficient plants and the discontinuation of unprofitable capacity. The integration of previous acquisitions facilitated the rationalization of the European tissue operations and production was concentrated to efficient facilities in strategic locations.
The cost-cutting and efficiency-enhancement program launched in 2012 and affecting both of SCA’s hygiene operations, meaning Personal Care and Tissue, will generate annual cost savings of EUR 300m with full effect from 2015. The measures will affect about 1,500 employees. The bulk of the savings relates to production and purchasing. In terms of production, SCA initiated a standardization project by implementing the most efficient processes at all of its production facilities. For purchasing, the main focus is on achieving economies of scale by more efficiently centralizing purchasing and consolidating suppliers.
SCA’s Tork Xpressnap guarantees customers in the AFH segment a significant reduction in napkin usage compared with conventional dispensers. Its one-at-a-time napkin dispensing system reduces the amount used and waste, and offers a more hygienic solution. The dispenser also has a larger capacity than conventional models, cutting down on work and maintenance. During the year, SCA launched several different dispenser models of the Tork Xpressnap Signature, featuring improved design, higher capacity and the possibility of customizing dispensers to customer preferences.
In response to demands for intelligent hygiene solutions, which are driven by greater awareness of hygiene and pandemic threats, SCA launched the Tork Elevation H1 Sensor touch-free hand towel roll dispenser. One towel at a time is dispensed and the user is not required to touch anything.
2-in-1 Tork, a patented soap that both cleans and sanitizes, was launched globally in 2012. The product is gentle on skin and better for the environment than many other antibacterial products.
SCA has developed a new packaging system, Tork Easy Handling, in the AFH segment aimed at simplifying the day-to-day jobs of cleaners. The idea behind the Tork Easy Handling systems of boxes and plastic packs is to prevent stress injuries, raise efficiency and simplify cleaning. Tork Easy Handling, consisting of the plastic Carry Pack and the cardboard Carry Box, introduces several functions that improve efficiency and ergonomics compared with traditional packaging. New handles allow cleaners to carry one cardboard box in each hand, making the task more comfortable. The packaging is also easier to open and to flatten as no special tools are required.
SCA launched Plenty Super Strong, a kitchen towel that is three times stronger in wet condition than its conventional counterpart due to its patented surface. The towel is as strong as a dishcloth, as absorbent as other high-quality kitchen towels and 100% biodegradable.
During the year, SCA launched Velvet Almond Milk, toilet paper with almond milk lotion, in the UK. Almond milk is being used increasingly for skincare purposes in hygiene products, but has not previously been used for toilet paper.
In 2012, sales of the Tissue business area rose in both product categories. Global growth amounted to 17%, excluding exchange rate effects and divestments. Acquisitions increased sales by 13%. The sales increase in emerging markets, which accounted for 17% of the business area’s sales, amounted to 19%, excluding exchange rate effects.
SCA’s target for the business area is an annual rate of organic growth of 3–4%.
In 2012, SCA grew both organically and through acquisitions. The largest acquisition completed during the year was the purchase of Georgia-Pacific’s European tissue operations, which was finalized in July. The company reported sales in 2011 of about SEK 12bn. The acquisition strengthens SCA’s product offering and geographic presence in strategic key European markets. The annual cost synergies are estimated at SEK 1.1bn, with full effect from 2016. The acquisition affords SCA a clear market- leading position for tissue in Europe, with a market share of approximately 30% in both consumer tissue and the AFH segment. For consumer tissue, the acquisition entails that an increased proportion of sales will be generated from SCA’s own product brands.
In April, SCA strengthened its presence in South America by acquiring the outstanding 50% interest in the Chilean hygiene company PISA, thus increasing its holding to 100% of the company. PISA is the second largest tissue company in Chile.
In 2012, SCA acquired a further 5% of the shares in the leading Chinese tissue company Vinda International. SCA’s holding totals 21.6% following the purchase (after dilution effects). Vinda is the third largest tissue company in China, which is the number two tissue market globally in terms of size, and is growing faster than the market.