SCA Tissue at a glance

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 tissue segment, SCA develops and markets complete hygiene solutions comprising dispensers, tissue, soap, service and maintenance to hospitals, large workplaces, industries, restaurants and hotels, under the globally leading brand Tork.

Efficiency

SCA produces tissue at 54 plants in a total of 19 countries.


During the year, SCA focused on the cost and efficiency program, launched in 2012, for its hygiene operations, meaning Personal Care and Tissue. The program is progressing according to plan and will generate annual cost savings of EUR 300m with full effect in 2015. The bulk of the savings will be made in production and sourcing. In terms of production, SCA is working to standardize activities by implementing the most efficient processes at all of its production facilities. For sourcing, the main focus is on achieving economies of scale by more efficiently centralizing sourcing and consolidating suppliers. The program also requires savings to be made in logistics, sales and  administration. In 2013, total cost savings in the Personal Care and Tissue business areas amounted to approximately SEK 1,050m.

In conjunction with the acquisition of Georgia- Pacific’s European tissue operations, synergies were identified that will lead to annual cost savings of EUR 125m with full effect in 2016. The Group’s efforts to realize cost  synergies progressed as planned in 2013. The savings achieved pertained to production, sourcing, logistics, sales and administration. Cost savings of SEK 385m were achieved in 2013.

Innovations and launches

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 dispenser in 2012.During 2013, the Tork Intuition Sensor touch-free foam soap dispenser was launched. The foam soap and the paper towels are dispensed without the user being required to touch anything, which improves hygiene and reduces the spread of infection.

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 is also positive from both a hygiene and sustainability perspective. The  dispenser also has a larger capacity than conventional models, cutting down on work and maintenance. During 2013, SCA launched a new, more elegant Tork Xpress Countertop dispenser, which is an attractive feature on countertops and tables or beside wash basins. It is available with a stainless steel finish, or in black or white plastic.

During the year, SCA launched a portable Tork dispenser for wiping paper that can be used in restaurant kitchens and can be easily moved between work stations. The dispenser also has a docking station on which the paper holder can be mounted, thereby also functioning as a stationary solution. It is an  intelligent product for food preparation environments that simplifies the work of the user and promotes better hygiene.

SCA also launched Tempo Cotton Touch, a new handkerchief containing  cotton to provide a stronger and softer product.

During the year, SCA launched Familia Famitex in Colombia via its joint venture there. Familia Famitex is a durable and strong paper towel for cleaning purposes that can be reused several times and represents a hygienic alternative to kitchen and cleaning cloths. Familia Famitex is available in three different colors for use is different cleaning areas around the home.

Growth

SCA’s target for the business area is annual organic growth of 3–4%.

In 2013, the Tissue business area grew both organically and through  acquisitions. Sales rose during the year in both product segments and global growth for the business area, excluding exchange rate effects and divestments, amounted to 15%. Acquisitions increased sales by 12%. The sales increase in emerging markets was 13%, excluding exchange rate  effects. Emerging markets accounted for 18% of the business area’s sales in 2013.

During the year, SCA became the majority shareholder in the Chinese tissue company Vinda, with ownership of 51.4%. Vinda is the third largest tissue company in China, which is the world’s second largest tissue market. SCA aims to develop the collaboration with Vinda and use its extensive and strong distribution network. SCA will consolidate Vinda from the first quarter of 2014.

During 2013, SCA established operations in India and decided to invest SEK 150m in local production of hygiene products. The plan is to commence production at the Group’s own plant in 2015. India’s large population and low use of hygiene products indicate potential for future growth. In 2013, SCA launched its Tempo consumer tissue in India.