Annual Report 1998

16
Acquisitions
A number of acquisitions were made during the year in line
with SCA’s growth strategy for hygiene products. The financial
uneasiness in the regions where SCA is expanding has created
favorable opportunities for acquisitions although there is some
uncertainty about profitability in the immediate future. Viewing
the situation in a longer perspective, SCA still believes that
future growth will be strong.
In Russia, SCA acquired all the shares of Svetogorsk Tissue
from Tetra-Laval. Svetogorsk Tissue, which is located in the St.
Petersburg region, has the most modern tissue machine in
Russia, built in 1989. Its production amounts to approximately
20,000 tons per year, equal to about 20% of the
Russian market. The acquisition offers possibilities to produce
diapers and feminine hygiene products locally.
In Colombia, SCA increased to 50% its stake in the Productos
Familia tissue company, which in turn owns the Tecnopapel
tissue company in Ecuador. Negotiations regarding the
acquisition of 50% of the Brazilian tissue company Melhoramentos
Papeis, which was announced in 1998, are as yet not
completed.
SCA has also increased its involvement in Asia with the acquisition
of Holland Pacific Paper, a Philippine tissue company.
The company currently has the capacity to produce 22,000
tons of tissue per year, plus capacity for 8,000 tons of specialty
paper that can be converted to tissue production. The market
share in the Philippines amounts to 22%.
In Western Europe, SCA acquired three distributors of
incontinence products in France whose total sales amount to
SEK 140 M. SCA is thereby becoming the market leader in
incontinence products in that country. Operations in the incontinence-product
field were acquired in Finland.
Tissue
Germany
UK
France
Italy
Spain
Russia 0%
The Netherlands
Nordic region
41%
46%
46%
70%
66%
63%
63%
0 10 20 30 40 50 60 70 80
Private labels, market shares
Baby diapers
Germany
27%
UK
12%
France
15%
Italy 5%
Spain 10%
Russia 0%
The Netherlands
30%
Nordic region 6%
Retail trade
With a complete line of toilet and household papers, feminine
hygiene products, baby diapers, etc., SCA is one of the largest
suppliers of hygiene products to the European retail trade.
Based on joint-venture companies, SCA also has favorable
positions – notably for feminine hygiene products – in more
than 20 markets in Latin America, Australia and Africa.
Approximately 60% of SCA’s total sales of hygiene products
are made via retailers. The products are marketed under
SCA’s brands and, to a large extent, under retailers’ private
labels, a segment in which SCA is the largest supplier in
Europe.
During the year SCA’s “Zewa” and “Edet” tissue brands
were coordinated with a common packaging design and
quality. Toilet paper with two to four layers of tissue with different
properties were introduced. A new household roll,
“Wipe and Clean,” was launched in Great Britain. Improvements
were also made in the quality of tissue products sold
under private labels. SCA’s share of the market increased considerably
during the year.
SCA’s share of the market for baby diapers also increased as
a result of a number of product introductions. The product
launches included an improved version of SCA’s Libero brand
diaper, as well as a new and thinner product sold under private
labels.
The feminine hygiene products that are sold under the
Libresse, Nana and Nuvenia brands were also enhanced with
a new fitting form and design during the year.
AFH market
SCA and Kimberly-Clark are Europe’s largest suppliers of tissue
products for the AFH market. SCA’s sales comprise toilet
0 10 20 30 40 50 60 70 80
Germany
Feminine hygiene products
30%
UK
20%
France
16%
Italy 4%
Spain
32%
Russia 0%
The Netherlands
36%
Nordic region
26%
The percentage of private label is increasing throughout Europe for all products. Currently, the share of private label is largest in tissue products.
0 10 20 30 40 50 60 70 80