SCA acquires hygiene companies in growth markets for SEK 1 billion
SCA's Board of Directors has approved a number of acquisitions within the
hygiene products area totaling about SEK 1 billion. All the projects are in
line with the previously announced growth strategy for the Group's hygiene
Brazil is new SCA market
In Brazil, SCA is participating in the new issue of shares in the
Melhoramentos Papeis Ltda (MP) tissue company, whereby SCA is acquiring a 50%
interest in the company. Currently, MP has a capacity of about 60,000 tons of
tissue and annual sales amount to approximately SEK 900 million. The market
share is about 10%. Measures to increase capacity on existing machines and
investment in converting equipment will be implemented to increase the
capacity to approximately 115,000 tons. With MP as a base, further
opportunities are created to introduce incontinence and feminine hygiene
products on the Brazilian market. The transaction is expected to be completed
by the end of 1998.
Strengthened position on the Andean market
In Colombia, where in 1997 SCA acquired 20% of the shares in the Productos
Familia S.A. tissue company, SCA is now successively increasing its holding to
50%. The company's sales have developed very favorably during the past year.
After SCA acquired an interest, the company purchased Tecnopapel, one of the
two tissue companies in Ecuador. Previously, SCA was already engaged in a
50/50 joint venture with Productos Familia in the fluff segment.
Expanded involvement in Asia
In the Philippines, all shares in the Holland Pacific Paper Inc. (HPPI) tissue
company were acquired. Capacity is currently 22,000 tons of tissue and 8,000
tons of specialty papers. The specialty paper machine can be converted to
tissue production. Sales amount to approximately SEK 75 million annually and
the market share is about 22%. SCA is also involved in joint ventures in
Japan, Taiwan and Australia.
Financing through cash flow
All the acquisitions well meet SCA's return requirements in the various
regions (about 20%). It is expected that financing will be carried out within
the framework of SCA's 1998 cash flow from operations.
Stockholm, 27 August 1998
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ)
For further information please contact:
Sverker Martin-Löf, President and CEO. Tel: +46 8-788 51 51 or
Sten Lindholm, Senior Vice President, Corporate Communications. Tel: +46-8-788