Magazine - SCA

Brand challenge
High quality is key to the
success of UK retail chain
Asda’s private labels.
Rematched
SCA Tissue takes on the
competition with a new
strategy.
for the
Camera: Skiing across Greenland
Camera: Skiing across Greenland

Contents Nº 3 2008
6

20
22
30
23
Last year saw a new world record in recycling.
Better hand hygiene would improve school attendance.
More short news on the Shape Up pages.
The Middle East may be the world’s next big
growth market. If these countries play their cards
right, the region has the chance to become a major
player in the global market.
China is consuming more paper products than ever
before and is gobbling up recovered paper in the
world market. Follow as well the journey of recycled
paper through a recovered paper plant.
China’s one-child policy has meant there are
too few people to care for the aging population.
Now the government is building nursing homes.
Jens Nordfält has analyzed the way we like to walk
through stores, and he knows the strategies for how
to sell more.
With a new sharper strategy SCA will be
No. 1 in branded tissue products.
SCA’s Claes-Göran Erson skied 1,500 km across
Greenland’s glaciers to the northernmost point of
mainland in the world.
The darkening clouds of the financial crisis are
casting a shadow over the global economy.

3,5
3,0
2,5
2,0
1,5
1,0
0,5
0,0
Nearly 22 million school days
are lost each year to the common
cold alone in the US.
However, students who
frequently wash their hands miss
fewer days than students with
poor hand hygiene.
Did you know...

Unclean bathrooms scare away
restaurant guests

For decades, the Middle East has often been
associated with conflicts and with poverty in sharp
contrast with a wealthy few. But in the wake of the
latest oil boom, the region has the opportunity of a
lifetime to lift itself up into the elite ranks of the
global economy.
n the mid-1950s, Qatar was a
tiny, dusty country populated
by nomads and fishermen. The
level of education was low,
even by the extremely low standards
of the time. There were
no navigable roads and not a
single school in the entire country.
Today the Gulf state is the richest
country in the world, knocking Luxembourg
from that position with a per
capita GNP of more than $80,000.
On the outskirts of the capital Doha,
the futuristic buildings of “Education
City” now cover 14 square kilometers.
The complex is a knowledge and education
center that is home to some of the
leading university departments in the
Arab world, including branches of five
top American universities.
Record-high prices for fossil fuels
in recent years have created a regional
boom in oil-rich Gulf states like Qatar,
the United Arab Emirates and Bahrain.
Up to this point, it could have been a
replay of the oil boom of the 1970s and
‘80s. Back then, this newfound wealth
produced as much misery as happiness.
The money was squandered on
private fleets of Rolls-Royces with all
the extras, lost at the gambling tables
of Monte Carlo or parked in Swiss bank
accounts.
The money cemented the power of
authoritarian leaders and their relatives
and made modernization and reforms

less urgent. When oil prices fell in the
1990s, the region was hit by an economic
hangover that created a breeding ground
for discontent and conflicts.
skyrocketing oil prices,
the region now has a second chance.
“We’re standing on the brink of a new
Middle East – young, entrepreneurial
and strong,” says a confident Khaldoon
Al Mubarak, CEO of Mubadala Development
Company in the United Arab
Emirates, in conjunction with a World
Economic Forum on the Middle East
last summer.
Kenneth Pollack of the US-based
Brookings Institution’s Saban Center
for Middle East Policy agrees, up to a
point. “The economic boom is creating
opportunities to address basic political,
economic and social problems that
have given rise to terrorist groups like
al-Qaeda,” Pollack says. “There’s just a
risk that this wealth will produce more
problems than it solves.”
Economic booms, peak prices for
food and raw materials and a number
of currencies tied to the dollar have accelerated
inflation – a development that
has hit broad groups of low -and middle-income
earners hard. “Nowadays,
we have to choose either to keep warm
or have enough to eat,” Abdul Rahmna,
a clothing salesman in Amman, Jordan,
told the New York Times. “We’re not
middle class anymore. We’re living on
the edge of poverty.”
Despite considerable investment in
education, major resources are needed
to meet the other big challenge in the region:
the enormous share of unemployed
young people in the local population.
According to the McKinsey consulting
firm, the Gulf states must create
280,000 jobs a year to employ all the
young people graduating from schools

and universities over the next few years.
So a number of countries, such as Oman,
are trying to replace the foreign workers
in the region with domestic labor. This
is not easy task, given that most employers
have learned to appreciate foreign
workers, who are cheap, highly motivated
and often well educated.
The easy oil riches in the region and an
emphasis on family connections rather
than qualifications have produced a large
group of young Arabs with a lackadaisical
attitude toward work. Yet despite difficult
challenges and what is still an uneven
income distribution, there are many
positive signs.
Across the entire region, even beyond
the oil states, median incomes have al-
most doubled in recent years. A middle
class with purchasing power is on the
rise. Auto sales in populous Egypt, for
instance, have quadrupled in just a few
years.
of all, many of the
countries seem to be taking steps toward
a future beyond the oil billions that have
been so easy to come by.
In the last few years, millions of visitors
to Dubai have gaped at the architectural
extravagance in this corner of
the United Arab Emirates. In the midst
of desert sands stand the world’s tallest
building, Burj Dubai, three of the tallest
hotels, the world’s only seven-star hotel
and the indoor ski resort Ski Dubai.

The odd thing about these feats is
that only 3 percent of Dubai’s income is
derived from oil and gas, with the bulk
coming instead from trade, transportation,
financial services and tourism.
The economic boom and reforms
have created hope not just among the
Arab world’s own inhabitants but also in
boardrooms far from the desert sands.
During a difficult summer for the
global aviation industry, Dubai’s neighbor,
Abu Dhabi, accounted for one of
the few positive bits of news when its
national airline placed the largest aircraft
order in recent years, totaling $43
billion, with the American company
Boeing and the European consortium
Airbus.
For a financial industry squeezed
hard by the US subprime mortgage crisis,
these homeless oil billions provide
a guarantee of continued liquidity. “At
the same time, the money has found its
way back home and is now being used
for investments in these countries instead
of in the West,” says Marcus Wenestam
at the Swedish Trade Council in
Saudi Arabia.
“The Arab world is developing and
is finally on its way to becoming part of
the globalization,” says Fadi Ghandour,
chairman of the Jordanian transportation
group Aramex International, in
conjunction with the World Economic
Forum.
This comes as a relief not just for the
region’s inhabitants but also for the rest
of the world. A stable, flourishing Middle
East is the best way to overcome
the conditions that have produced
a breeding ground for the terrorism
that has long plagued the region.

Tempo Complete Care
my secret remedy during a cold
NEW – Tempo Complete Care with its unique
combination of breath-free oils and pampering
balm, soothes the nose and lets you breathe freely.

Tempo Complete Care
my secret remedy during a cold
NEW – Tempo Complete Care with its unique
combination of breath-free oils and pampering
balm, soothes the nose and lets you breathe freely.

SCA sells sanitary protection in the Middle East,
one of the hottest markets in the world but also
difficult to navigate. For clever and courageous
players, there are enormous opportunities.
the
Middle East is the most dynamic market
in the world and it’s at the top in growth
in purchasing power, although in many
cases that is still unevenly distributed,”
says Peter Dahlqvist, who is responsible
for SCA’s efforts in the region.
Last fall, SCA began collaborating
on a joint venture with its local partner
Nuqul in Jordan. The new company
will manufacture and sell sanitary protection
in 18 countries in the region.
“The strict religious traditions in
countries like Saudi Arabia can be a
challenge, for example, when you want
to market products,” Dahlqvist says.
“The taboos there relating to menstruation
make it extremely important that
women keep it concealed, which means
women consumers choose quality when
they buy sanitary protection.
“There are many reasons for SCA’s
investment in the Middle East. In consumer
goods and the retail industry, the
demographics are a strong driving force
in regions that has large families. In
Saudi Arabia, 38 percent of the population
is under 15.

“Even though the country has only
one-third the population of Germany,
there are more children in Saudi Arabia,”
Dahlqvist says. “That creates a
big market for diapers today, and in the
next few years demand for menstruation
protection will increase.” ”In the past,
the wealth from the oil was unevenly distributed,
and the wake of the resulting
discontent has caused instability in the
region. Paradoxically, this is putting pressure
on the oil princes today to spread the
economic well-being, he explains.
“A growing, flourishing middle
class is in fact often the basis for stable
growth,” Dahlqvist says, pointing to
countries such as Tunisia, Jordan and
the United Arab Emirates.
The turbulent political situation has
kept many players out of the region. But
today the trend is starting to turn. For
instance, the French retailer Carrefour
is investing heavily in the region.
“As for SCA, it means we can be in
a market that has really strong growth
potential early on,” Dahlqvist says.
“Procter & Gamble is the only one of
our global competitors to set up operations
here.
“It’s often an advantage in today’s
polarized global politics to be a European
company in the region, although
our Danish neighbors have seen how
quickly things can change.”

Skicka kupongen portofritt i ett kuvert märkt ”FRISVAR”
till: SCA Packaging, 0020192361, 331 20 Värnamo.
Märk kuvertet ”Säljklart”. Eller faxa telefon 0370 193 29.
SCA PACKAGING SWEDEN AB
www.scapackaging.se
Dina förpackningar kningar
kan bli morgondagens ondagens
säljare
Att exponera är att sälja.
Men exponering kräver tid och personal.
Lösningen ligger i bättre förpackningar
som klarar hela kedjan från producent
till butikshylla. Några enkla handgrepp
och dina varor ligger väl synliga och
lätta att plocka.
Direkt ur en Säljklar förpackning.
Namn
Befattning
Företag
Adress
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Mail
Kontakta mig för en beskrivning av vad ni kan
inom ämnet ”Säljklara förpackningar”.
Jag har ett aktuellt projekt. Ring direkt.
✃

Rising
stars
Private labels have come a long way from being
just plain-wrapped, low-priced options. Thanks to
product innovation and better-than-the-leadingbrand
quality, they now outsell branded goods in
many categories.
the world are
investing more and more in their own
brands. The concept of private labels
has changed dramatically over the past
five to 10 years, while sales have shot up.
At Asda, Britain’s second-largest retailer,
private labels now make up a large
percentage of total sales of both edible
and non-edible products.
Len Barker, general manager of nonedible
grocery and baby products at
Asda, confirms that consumer attitudes
toward private labels have changed dramatically.
“Private labels used to be seen as a
cheap and cheerful option, though not as
good as the brand leader,” he says. “Today
people expect a private label to have a
very good quality base and to be as good
as, or better than, the leading brand.”
Private labels started out several decades
ago as anonymous products at the
low end of the price range. But now store
brands form an entire brand architecture
in their own right, often covering at
least three segments of the price range –
cheap, standard and premium. They also
include specialty lines such as organi-
g
cally produced goods and eco-labeled or
fair-trade-certified products.
Uncertainty about the economy
makes price a greater concern for shoppers,
and private labels in general have
become more aggressive, Barker says.
“We are entering a period of six to 18
very interesting months,” he says. “The
economic climate is getting tougher, and
people still have to eat. If things continue
to get tougher, they might be more and
more inclined to ditch branded products
in some low-involvement categories,
particularly in such a mature market as
the UK.”
problems in selling
branded goods next to private labels, as
its strategy is based entirely on what the
consumer wants.
“It’s all about giving the consumers
the benefit of choice,” Barker says.
“They have to be happy with what
they’re buying from us. By voting with
their feet, they tell us what they want or
don’t want.”
The relationship between branded
products and private labels on Asda
shelves varies across categories, Barker
says. In some categories, private label
penetration is relatively low.
“Washing powder, for example, is
dominated by a handful of very big
multinational brands, so Asda private
labels have a slightly different role,” he
says. “Because laundry is so heavily advertised
and constantly pushed, many
customers still hold the idea that private
labels are never going to be as good.”
In the tissue category, on the other
hand, private labels play a bigger role at
Asda, whose strategy is to come up with
products that are better than the leading
brand. One highly successful result is Asda
Shades, a private label toilet tissue supplied
by SCA.
“We have got a fairly unique proposition
versus most of our competition.
“It is one of our few private labels that
have outsold the biggest brand by a long
way for many years. We refer to Shades
as ‘the crown jewel’ among our private
labels.”
general strategy
behind its own brands is to gener-

ate a “very credible option.” Trying to
push inferior products under a private
label could damage the overall brand,
he warns.
“We have to make sure that we are
not giving anyone any reason to complain
about quality in anything that we
put our name on,” he says. “We have
a reputation to keep, and the entire
Asda brand might suffer from poor
performance from an Asda-labeled
product.”
While Asda has been owned by Wal-
Mart, America’s No. 1 discount retailer,
since 1999, it has a long heritage
as a value retailer in Britain, Barker
says. The idea, he says, is “great-quality
products at great prices, not poorquality
products at cheap prices.”
In the absence of the massive advertising
and promotion employed by
global brands, private labels have to
use packaging as a means of communicating
with the customer, and they
must also show more creativity and
be faster to market with innovations,
Barker says.
that as consumers have
become savvier, less advertising might
even work in favor of customer perception.
“I think people have become more
aware of the fact that a lot of the price
difference between branded goods and
private labels is related to advertising,”
Barker says. “And we try to do things
with our brands that even the leading
brand has not done. Asda Shades being
first to market with sustainability
FSC labeling is one example.”
Barker says what he really wants
from a private label supplier is that it
helps Asda stand out from the crowd
by offering a unique point of difference
versus the competition.
“We need products that are first to
market, and the supplier must be able
to cover everything, including environmental
benefits,” he says.
In general, Barker finds relationships
with private label suppliers to be
different from relations with branded
product manufacturers.
“They have to be,” he says. “Generally
speaking, there is a difference in
attitude. With a big branded supplier,
their priority is their brand on our
shelves and not our customer.”
The offerings of branded suppliers
might not be ideal for Asda shoppers,
whether in terms of pack size, quality,
flavor or pricing, he says.
What about the future, then – will
private labels take over the shelves
completely?
“If the customer wants it, why not?”
Barker concludes.

Recovered paper is in big demand. China’s growing
economy is short of raw materials including
wood fiber. Demand for recovered paper is expected
to remain high for the foreseeable future, keeping
upward pressure on prices and leading to a
global shortage in the recovered paper market.
The fiber cycle
growth in recent
years has created enormous demand for
all types of paper products and for raw
material in the form of recovered paper.
“As prosperity rises in China and elsewhere
in Asia, more and more people
are beginning to use tissue products and
read newspapers,” says David Knight,
director of SCA Fiber Procurement in
North America. “The increase in consumption
also means that the demand
for cardboard and packaging is growing
considerably.”
Over the next two years, the global
market for recovered paper is expected
to grow by 20 million tons from the 200
million tons of recovered paper converted
globally in 2007. To meet this
increased demand, the industry faces a
number of challenges. “Above all, we
need to recycle more paper,” Knight
says. In Europe, the recycling rate is
about 63-64 percent. The best countries
are Sweden, Germany, the Netherlands,
Austria and Switzerland, which
all have rates over 70 percent. Japan is
also up there with 65-70 percent. In the
US, however, the recycling rate is only
53 percent.
reached the same recycling
rate as the European average, it would
mean another 10 million tons a year,
which is absolutely necessary to meet
the demand from China,” says Hans
Wortman, managing director of the
European-based SCA Recycling.
The markets for recovered paper in
the US and Europe differ in one important
respect. In Europe, development has
mainly been steered by legislation that
encourages recycling. However, in the
US, where the market is driven by growing
exports, there are no incentives for re-

cycling and sorting garbage. For the average
person, it’s often cheaper to throw
everything unsorted right into the garbage
can. That means it’s difficult to get
people to recycle paper and other materials.
“So a lot of recycling companies
have started collecting unsorted garbage,
which they separate themselves in
their own facilities,” Knight says. “The
downside is that it’s hard to sort out different
kinds of paper, which means the
quality of fiber deteriorates.”
for the
industry is rising oil prices, which encourage
the burning of recovered paper
as an alternative source of energy.
“To avoid a shortage of recovered paper,
it’s really important to recycle fiber
as many times as possible,” Wortman
says. “Only when the fibers are
no longer suitable for paper production
should they be used as a source
of energy.”
Using recovered paper offers several
advantages. Obviously, it’s beneficial
to the environment to recycle the material.
Historically recovered paper is
cheaper, although its prices have been
trending higher in recent years. In addition,
there is a certain amount of
seasonal variation. During the summer,
prices typically rise a bit because
access to recoverable paper falls when
people go on vacation. “Prices usually
rise 10-20 percent in the fall as well
because demand increases when operations
everywhere get going again,”
Knight says.
US exports of recovered paper to
China also tend to rise during the
fall season because of higher US imports
from China, especially ahead of
Christmas. Instead of letting vessels return
to China empty, it is cost-effective
to fill them with recovered paper. “It’s
actually cheaper to send a container of
recovered paper from Chicago to China
than from Chicago to New York,”
Knight says.

process for recycled
fiber paper varies depending on the
end product. Recycled fiber paper comes
in many different types. Some typical
examples are newspaper, container-
board, cardboard, toilet paper, paper
towels, napkins and facial tissues. At
SCA’s paper mill at Lilla Edet in southwest
Sweden, the production process for
tissue looks like this.

process for recycled
fiber paper varies depending on the
end product. Recycled fiber paper comes
in many different types. Some typical
examples are newspaper, container-
board, cardboard, toilet paper, paper
towels, napkins and facial tissues. At
SCA’s paper mill at Lilla Edet in southwest
Sweden, the production process for
tissue looks like this.

One-child-policy gives
birth to nursing homes
Because of China’s one-child-policy, fewer young
people are available to support a growing number
of elderly relatives. The Chinese government is
racing to build new nursing homes and encourage
private initiatives.
of the
one-child policy in China in the late
1970s, the number of children without
siblings has surpassed 100 million.
The intended effect, to curb population
growth, has succeeded, but the
policy has put a heavy burden on the
only children to support their parents
and grandparents.
The long-term logic of the one-child
policy is that China will have too many
old people and not enough young ones.
In other words, fewer workers will have
to support many more elderly relatives.
Over the next few decades, this burden
will grow heavier. China is already
the world’s largest aging community. In
2030, the country will have 244 million
people over 65 years old – around
18 percent of the total population. By
2040, one out of every four people in
China is expected to be a grandparent.
Unlike other countries with aging
populations, such as Japan, China is at
an early stage of a welfare system for the
elderly and urgently needs reforms.
Currently, China has about 40,000
nursing homes with about 1.5 million
beds. A further 3 million beds will be
completed by 2010, but that is not
enough, so the government has encouraged
private initiatives through
tax incentives.

his motor scooter in front of the
Stockholm School of Economics at the stroke of 10, the time we
agreed to meet. With helmet in hand and a broad smile on his
face, he gives me a warm greeting and we rush across Sveavägen,
the busiest road in Sweden, to the nearest espresso bar.
Nordfält is a man with many irons in the fire, so he has to use
his time efficiently, but he also seems to be one of those people
who have more hours in the day than everybody else.
In his professional life, he’s a researcher at the Stockholm
School of Economics, president of the Hakon Swenson Foundation
and vice chancellor of the new Nordic Retail College
Foundation in Norrtälje, Sweden. Along with these responsibilities,
he lectures and teaches in Lund, Umeå and Stockholm.
In addition, he helps his former employer, the food retailer ICA,
with various analyses and research projects.
And now he can call himself an author as well. Last year saw
the publication of his book Marknadsföring i butik (“Marketing
in Stores”), which was named the 2007 Marketing Book of
the Year and was recently translated into English. It has been,
and is, a big chapter in his life.
He doesn’t even take it easy in his private life. He ran his
first marathon, Arosmarken, in his hometown of Västerås
at the age of 12. That same year, he biked to the island of
Öland with his father and later pedaled the entire way to Paris
and Austria. He’s done the Fjällräven Extreme, a race people

his motor scooter in front of the
Stockholm School of Economics at the stroke of 10, the time we
agreed to meet. With helmet in hand and a broad smile on his
face, he gives me a warm greeting and we rush across Sveavägen,
the busiest road in Sweden, to the nearest espresso bar.
Nordfält is a man with many irons in the fire, so he has to use
his time efficiently, but he also seems to be one of those people
who have more hours in the day than everybody else.
In his professional life, he’s a researcher at the Stockholm
School of Economics, president of the Hakon Swenson Foundation
and vice chancellor of the new Nordic Retail College
Foundation in Norrtälje, Sweden. Along with these responsibilities,
he lectures and teaches in Lund, Umeå and Stockholm.
In addition, he helps his former employer, the food retailer ICA,
with various analyses and research projects.
And now he can call himself an author as well. Last year saw
the publication of his book Marknadsföring i butik (“Marketing
in Stores”), which was named the 2007 Marketing Book of
the Year and was recently translated into English. It has been,
and is, a big chapter in his life.
He doesn’t even take it easy in his private life. He ran his
first marathon, Arosmarken, in his hometown of Västerås
at the age of 12. That same year, he biked to the island of
Öland with his father and later pedaled the entire way to Paris
and Austria. He’s done the Fjällräven Extreme, a race people

un wearing backpacks. Nordfält also
mentions a ski competition in Greenland
where people carry backpacks and
camp out in tents. “When I work out, I
can clear my brain and my whole body
feels good,” he says.
to take form as early
as 1992, when Nordfält went to work
at ICA as CFO. A few years later he became
interested in marketing but quickly
discovered the lack of literature or
well-developed theories on how things
are really sold in stores. In 1995, when
he started teaching sales to managers at
ICA’s corporate school, he decided to
address this need. “I started studying at
SSE and began a PhD in 1998 with the
aim of writing a book,” he recalls.
In the book, Nordfält focuses on how
environment influences our choices.
Both his dissertation and book are psychological
and are relevant to anyone
interested in how marketing works in
practice. “Among other things, I describe
how people follow routines when they
shop,” he says. “The choices we make
are rarely optimal. For most people it’s
enough that the choices are adequate
and easy to access in their memory. The
research showed that we like repetition,
even when we shop. We go to the same
store and follow the same path.”
Nordfält thinks it’s interesting to see
in purely psychological terms how visual
perception works in an environment as
cluttered and crowded as that of a store.
What do people notice? How does the
selection process work, and how can
people influence it? “I and many others
have succeeded in showing, for instance,
that when a product is placed at the end
of an aisle it will be noticed and sales can
increase several hundred percent, maybe
up to 1,000 percent, without changing
the price. If you put it there, the item just
slips into people’s grocery carts.”
Nordfält has also investigated how
displays, music, scents and colors affect
people. People believe they determine
their own choices, he says, but tests show
that if you play German music, 70 percent
of the customers will start buying
German wine. If you switch to French
music, then the choice becomes French
wine. “When you ask the customers
whether they heard the music and why
they chose that particular wine, they
usually say they didn’t hear the music but
‘that was exactly the wine I wanted.’”
Customers can also be made to focus
their attention on something special, but
an important fact when it comes to marketing
in stores, and one that has been
studied fairly closely, is that people can’t
be manipulated into buying something
they don’t want.
help inspire and
encourage customers in various ways,
Nordfält notes. That way, people avoid
coming home and realizing for the umpteenth
time that they forgot to buy light
bulbs.
What it’s like shopping in a non-professional
capacity?
“I don’t actually go around and talk
about what I’ve learned when I’m shopping
with my wife, but she probably
thinks I’m way too rational. I’m always
checking what we’re buying and can say,
‘We bought that last time too and we
haven’t used it.’
“Even the food you make at home is
determined by habits. If you get inspired
to make a fruit salad in the store but don’t
make one normally, it probably means
that in the end you’ll wind up throwing
away overripe fruit.”
The book has opened up many doors
for Nordfält. “Sometimes I think that
everything is part of one big master plan,”
he says. “First came the book, then my
position at the Hakon Swenson Foundation,
where I hand out research funds,
and now I’m vice chancellor at the Nordic
Retail College Foundation in Norrtälje.
I usually think that everything is
connected and that it’s all about realizing
my dream of retailing being an academic
field. And now I’m seeing how it’s being
realized, that it’s a unifying theme.”

Tissue
No. 2 in consumer tissue brand products,”
says Lesley Cordial, category director for consumer tissue
in Munich. “That’s three percentage points behind No.
1, but I’m counting on passing them.”
The product portfolio for consumer tissue consists of 12
different brands where there are potential synergies in product
quality management and marketing communication.
“The key question was how we were going to make the
product portfolio less splintered and more relevant to consumers,”
Cordial says.
An early step in the strategic work was to shift from one segment
to two, with different approaches to consumers:
Personal hygiene products that are used near the skin,
where consumers want something soft and gentle. These
include facial tissue, toilet tissue and hankies.
Object hygiene products, for example household towels,
used for cleaning purposes. Here consumers want absorption,
durability and functionality.
“Before, we saw everything as tissue products,” Cordial
says. “By creating two separate segments, it’s easier to customize
communication.”
to talk to consumers about the
needs the product can meet. When it comes to toilet paper
or facial tissues, the key words are softness, color and scent
– qualities that aren’t relevant when it comes to cleaning
products.
Today SCA is the market leader in retailers’ own brands.
The goal is also to be No. 1 in Europe in brand products.

“We’ll be the company that our consumers and industry
competitors have as a benchmark,” Cordial says.
The aim is to become the indisputable market leader.
That means market share has to grow from today’s 25 percent
to a little over 28 percent, which is No. 1 Kimberly-
Clark’s share today. An important piece of the puzzle in this
effort was the acquisition of Procter & Gamble’s European
tissue operations and the Tempo brand for EUR 512 million
during 2007.
“With the acquisition of Procter & Gamble’s tissue operations,
we went from being No. 3 in Europe to No. 2.”
Every future product launch will follow this new strategy
and the portfolio will be trimmed over the course of
the plan.
products will have a more uniform appearance,
and marketing communication will be coordinated.
“A more harmonised approach to the communication of
our brands will help cut costs in communication produc-
WHEN IT COMES
TO TOILET PAPER
OR FACIAL TISSUES,
THE KEY WORDS
ARE SOFTNESS,
COLOR AND SCENT
– QUALITIES THAT
AREN’T RELEVANT
WHEN IT COMES
TO CLEANING
PRODUCTS.
tion,” she says. “When we come out with new products, the
launch can be carried out faster and simultaneously across
Europe.”
The core of the action plan to increase profitability is
concentrating marketing efforts on newly launched products
but also increasing the focus on value added products.
“For instance, the Tempo brand is a product with a strong
position in the German market,” Cordial says. “We can get
a premium price there. So it’s smarter for us to concentrate
on increasing sales of facial tissue rather than toilet paper.
“The goal is to have consumers feel they’re buying a
brand product that really meets their needs and expectations.
It should feel like a premium product, with premium
properties and premium quality. So then we can also charge
a higher price.”
Continuous product development is another important
part of the strategy. “Consumers should feel that we’re listening
to them and doing everything to meet their needs,”
Cordial says.

in Mexico makes
perfect sense for SCA. The country’s
market for tissue and personal hygiene
products continues to grow rapidly,
as people are increasingly better off,”
says Thomas Wulkan, head of SCA
Americas.
The first phase will see the construction
of a tissue machine with a
capacity of 60,000 tons a year. The
project also includes a recovered paper
facility, a converting plant with
three converting lines for bath tissue
and a distribution center.
“It’s an important strategic investment,”
Wulkan says. “It will help
enhance our consumer offerings and
means that we can continue to grow
with our customers.”
Mexico is one of the largest and
most important growth markets in
the world. Under Presidents Vicente
Fox and Felipe Calderón, the country
has implemented a number of
reforms to make the economy more
stable. These changes, combined
with several new free trade agreements,
have on the whole reduced
Mexico’s dependence on the US.
Today the country has a rapidly expanding
middle class, low inflation
and stable growth despite its northern
neighbor’s current recession.
“We see continued growth in all
our product segments,” Wulkan says.
“I estimate a 50 percent increase in
sales over the next five years.”

Search for a chocolate package
launched a competition to find
a new packaging concept for
selling chocolate in stores.
European students, design
schools and budding packaging
designers are welcome to enter
the competition.
Apart from creating an innovative
package, the competitors
must consider trends and
industrial limitations as well as
environmental issues such as
the package’s life cycle and its
impact on the environment.
The competition runs from
September 2008 to March
2009. The winner will receive
EUR 3,000 and an internship
at the Innovation Centre in
Brussels.
Details are available at
www.scapackaging.com
Libero, one of SCA’s baby diaper
brands, is publishing a book
titled Everybody is Expecting
a Child. It’s the result of an appeal
on Libero’s website to parents
who are expecting a child,
asking them to write about their
experiences. Of 570 stories submitted,
190 were selected for
the book.
Sofia Hallberg, communications
manager for the Libero
brand, says all proceeds go to
the Red Cross and the “Save the
Mothers” project. Childbirth
in developing countries is still
associated with major risks, and
the money goes to improving
conditions there. The publisher
is Vulkan Förlag.

Toward
the no
place in the

thenmost
world

thenmost
world

thenmost
world

A chilling wind in the world
in the
world’s financial markets since the summer
can hardly have escaped anyone’s
attention. With the financial crisis deepening,
the economic outlook has also
become gloomier. However, great uncertainty
remains as to how the turmoil
is affecting the real economy. The diagram
below shows a downward trend
for leading indicators, an index of future
economic activity, in both the US
and Europe since the middle of 2007.
Even though the US has been the focus
of attention, the diagram indicates a more
negative trend in Europe. Growth fig ures
as measured in GNP also appear to be as
shaky in the EU as in the US, if not shakier.
In the OECD’s most recent forecast
in September, GNP growth in 2008 was
estimated at 1.8 percent in the US and 1.3
percent in the euro zone. However, this
forecast was made prior to the latest dramatic
developments in the financial markets.
The economic downturn in Europe
has also created expectations of interest
rate cuts and has helped, at least temporarily,
to break the fall of the dollar that
began in early 2006.
The price of electricity (Nordpool)
has defied the economic slump and
continued to climb to new record levels.
Among the reasons mentioned are
high coal prices, as a result of strong
demand from China, and the fear of
a drier fall than usual in Sweden and
Norway.

Get the products, support,
and knowledge you need to lighten
your environmental footprint.
Ranked as the Greenest Tissue Manufacturer in the world, * and named one of the world’s 95 most
ethical companies, ** SCA is a leader in providing sustainable paper products and dispensing solutions
under the Tork Brand. Learn how we can help you lower your impact on the environment.
Download our Environmental Evaluator at torkusa.com.
Tork offers you several paths to a greener tomorrow:
100% recycled napkin, towel and tissue products that are elemental and process chlorine-free
Our products and manufacturing processes meet the strictest third-party environmental certification standards
Controlled consumption dispensers reduce both waste and cost
With regionalized manufacturing facilities, product travels fewer miles
SmartFit case sizing allows more product on trucks, reducing fuel costs
* As ranked by The Independent in conjunction with Ethical Investment Research Services
** As ranked by the Ethisphere Institute
SCA Tissue is a leading provider of napkins, towels, tissue, wipers
and dispensing systems for the Away From Home tissue market.

Fewer napkins consumed,
cleaner and greener dining
Put our system to the test
We guarantee, at least, a 25% reduction in your napkin
consumption with any Tork Interfold Napkin System*.
Book a risk-free test now and see how much you can save!
Click: www.sca-tork.com/interfold Phone: +46 31 7460000
*Versus traditional dispensers