SCA and Johnson & Johnson will initiate cooperation in the North American
and Nordic consumer product markets
SCA and Johnson & Johnson signed agreements today covering the consumer
product sectors in the North American and Nordic markets.
SCA is acquiring Johnson & Johnson's adult absorbable incontinence product
brand in the U.S. and Canada. The products are sold under the SERENITY
brand name in the United States, with sales currently amounting to
approximately USD 50 M per year, mainly through retail outlets.
Johnson & Johnson will continue to sell and distribute these products
under the agreement with SCA. However, SCA will assume responsibility for
product development and marketing, while product supplies will initially
be organized under terms of a supply agreement with Johnson & Johnson.
Production of the products will gradually be taken over by SCA and
integrated within the Group's other plants in North America.
The transaction represents SCA's initial penetration into the retail
sector of the North American market. The SERENITY brand is second in the
North American mild incontinence market, which is the fastest growing
segment of the market, of about 25%. SERENITY holds a total share of about
10% of retail sales of incontinence products. As a result of the agreement
with Johnson & Johnson, SCA will now have the opportunity to build on its
success in Europe within the mild incontinence segment. SCA's market share
in Europe in this segment under the Tena Lady brand is currently about
70%, with annual sales growth of approximately 20%. Growth in this segment
in the American market is also in the range of 20%.
With the acquisition of SERENITY, SCA will be able to participate in the
favorable growth in the North American market and thereby strengthen its
global market-leading position. SERENITY is expected to increase in sales
by at least 20% annually during the next few years. Profitability is
expected to increase over time to an attractive level in line with SCA's
corresponding European operations.
In addition, SCA and Johnson & Johnson have reached an agreement whereby
SCA's consumer products organization will sell and distribute Johnson &
Johnson's consumer products to the retail segment in the Nordic countries.
Some of the leading brand names include Natusan, Clean & Clear and
Chiffonet. Annual sales amount to about SEK 350 M.
This cooperation will enable SCA to offer its retail customers a broader
product range and thereby, in the Nordic region, enhance SCA's leading
position in the hygiene products category.
SCA will also terminate SCA's license agreement governing Johnson &
Johnson's "o.b." tampons in the Nordic countries now to be effective in
two years. Annual sales of the product amount to approximately SEK 140 M.
Johnson & Johnson owns the "o.b." brand, which is also a global brand
name. SCA will continue to sell and distribute "o.b." in the Nordic
Tampons are not one of SCA's prioritized product areas. SCA is focusing on
external feminine hygiene products, i.e., on panty liners and sanitary
Upon the termination of SCA's rights under the o.b. license agreement, it
is possible that production of tampons will be discontinued at SCA's
production plant in Tönsberg, Norway. Production volumes may become too
small to maintain continued profitable operations at the plant. There is a
risk, accordingly, that operations will be terminated in Tönsberg at some
point in the future, but not before mid-year 2002. The company, however,
will study opportunities for alternative production operations at the
plant, which has approximately 170 employees today.
The agreements described above are pending approval by competition
authorities in both Europe and North America.
Stockholm 11 May 2000
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ)
For further information please contact:
Sverker Martin-Löf, President and CEO. Tel +46 8 788 51 51
Stefan Angwald, President, SCA Hygiene Products, Incontinence Care. Tel
+46 31 746 08 32
Sten Lindholm, Senior VP, Corporate Communications. Tel +46 8 788 51 62
PS Further information can be obtained via SCA's homepage www.sca.se.
Please visit http://www.bit.se for further information
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