SCA to Revamp Paper, Package Units; Globalize Brands

Svenska Cellulosa AB (SCAB), Europe's biggest tissue maker, plans to review its divisions as it targets improved profitability at lumber, pulp, paper and packaging units.

Kenneth Eriksson, the head of the forest products division, has been appointed Chief Operating Officer and will conduct the review, Stockholm-based SCA said today in a Cision newswire release. The company also said that it is establishing a global brands unit which will have research and strategic responsibility for its tissue and personal hygiene brands.

Chief Executive Officer Jan Johansson is expanding production of absorbent products and tissue in Russia and Latin America, where demand is growing in double digits. The company will not divest its publication paper and forestry businesses, Johansson said on a teleconference.

``The forest products division will be a source of cash flow for the expansion of the personal care and tissue businesses,'' Claes Rasmuson, a Stockholm-based analyst with Swedbank with a ``buy'' rating on SCA shares. ``Johansson was hired to speed up growth in the hygiene-related businesses and this makes it clearer what he's going to do.''

The company plans to build up its stable of international own-label brands, including Tork tissue and Tena incontinence products, and will also expand some Latin American brands to other countries, Johansson said.

To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

To contact the editor responsible for this story: Andrew Noel at anoel@bloomberg.net