SCA invests in packaging division

Svenska Cellulosa Aktiebolaget (SCA), the Swedish-based global wood products and packaging provider, is carrying out investments to increase competitiveness in both its Swedish sawmill operations and its German packaging operations.

In an effort to further optimise coordination between the sawmill operations in SCA and the associated company Scaninge, SCA said it intends to acquire Scaninge's sawmill operations. The price for the four sawmills - Bollsta, Vilhelmina, Rundvik and Graningebruk - amounts to SEK 270million (€18.9m), to which separate remuneration for existing working capital will be added.

SCA's original ownership interest in Scaninge was 41 per cent, which was increased to 59 percent in May 2001. The voting rights in the company have been equally distributed between Graninge and SCA from the start. SCA said it intends to retain its holding in Scaninge, whose future activities will be solely limited to forestry operations.

The company said the operating surplus in the units to be consolidated through the transaction is expected this year to amount to nearly SEK 90 million.

Within the packaging operations, SCA said it will carry out investments at the corrugated board plant in Minden, Germany. Currently the plant produces 110 million square meters of corrugated packaging annually, making it one of SCA's largest packaging units.

To significantly increase productivity in the plant, the facility will be upgraded with a new corrugated board machine, new converting equipment and changes that result in what the company says will be a more efficient product flow through the plant. The investments, which are comparable to the investment measures taken at SCA's plants in Värnamo, Sweden, and Grenå, Denmark, aim to reduce costs while simultaneously improving product quality.

The company said that the investment in its packaging division will amount to SEK 161 million.