SCA implements packaging acquisition and expansion investments in the
SCA carries out a packaging acquisition in North America and is
a tissue machine in Colombia as well as added capacity in incontinence
Packaging acquisition in North America
To expand and complement SCA's North American protective packaging
operations, SCA is acquiring the Alloyd Inc. packaging company based in
DeKalb, Illinois. The purchase price on a debt-free basis amounts to SEK
740 M (USD 97 M). Alloyd has annual sales corresponding to SEK 600 M and
an EBITDA margin of about 17%. The purchase price corresponds to an
EBITDA multiple of 6.5 based on forecast earnings for the current year.
After taking into account integration effects that can be achieved with
the existing protective packaging operations, the CVA index for the
acquisition amounts to 1.3, which means that the net present value of
the future free cash flow exceeds the purchase price by 30%. The
acquisition will have a marginal positive impact on SCA's earnings per
share during the first 12 months.
With a market share of 13%, Alloyd is currently the leading supplier of
blister packaging to the consumer goods producers in the US. The
company's customers are primarily producers of office materials,
batteries, auto parts, toys, tools etc. The protective display packaging
segment is showing strong growth in North America. The supplier
structure is still fragmented and, accordingly, there is favourable
scope for further expansion. The product segment, which to a limited
extent is already being exploited by SCA's current protective packaging
operations, opens a new growth area.
The acquisition is conditional upon the approval of the relevant
Added tissue capacity in Colombia
To meet the requirement for base tissue paper for SCA's converting of
tissue in Colombia, investment will be made in a new tissue machine in
Bogotá. The investment amounts to a total of SEK 360 M and is being made
by Familia Sancela, SCA's joint-venture company in Colombia.
The investment creates new expansion possibilities and significant cost
benefits compared with the current supply to the main market in Bogotá.
Today's import of base tissue paper from other parts of Latin America
can cease. Concurrently, domestic shipping costs can be reduced when
parts of the converting operations are transferred from Medellin to
The investment shows a CVA index of 1.5 and will be carried out without
the contribution of new capital to the joint-venture company. Familia
Sancela also produces and sells feminine hygiene products, baby diapers
and incontinence products in Colombia, Ecuador and other countries in
Increased capacity for incontinence products
As part of the continuous expansion and renewal of SCA's production of
incontinence products, SCA has also decided to add new machine capacity
to the plant in Gennep, The Netherlands. The investment amounts to about
SEK 180 M and the project has a CVA index of 1.5.
Stockholm, 4 November 2003
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ)
Communications and Investor Relations
For further information please contact
Jan Åström, President and CEO. Phone: +46 70-586 07 01.
Peter Nyquist, Senior Vice President, Communications and Investor
Relations. Phone: +46 70-575 29 06.
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