SWEDEN
KEY DEVELOPMENTS AT SCA IN EARLY SEPTEMBER

In the first week in September, SCA appointed a new president and got the go-ahead to buy P&G’s European tissue operations. The first announcement was a surprise, even if the other had been long awaited.

The European Commission has approved SCA’s acquisition of Procter & Gamble’s European tissue operations with a number of strong and well-known brands. The acquisition should be seen against the background of SCA’s aim to be the undisputed leader within the tissue category in Europe and the preferred choice for European consumers and customers.

The purchase price is €512 million to be paid in cash in two stages. A first payment of €347 million will be made when the deal is completed, planned for 1 October. The second part of the purchase price, €165 million, will be paid following agreed technical adjustments at certain plants, which are expected to be completed in March 2008.

Better platform

Lennart Persson, acting president and CEO of SCA, commented: “The acquisition gives SCA key prerequisites for the creation of an even better platform for consumerdriven awareness and will strengthen our market positions in several important markets.”

He added: “Today’s decision by the European Commission means that we can start the integration work. At a later date, we plan to provide additional financial information, decisions on possible restructuring, and the synergy effects of the acquisition, which will primarily affect brands and markets.”

The approval is conditional on SCA divesting its present operations within handkerchiefs under the Softis brand in Germany and Austria and, if the purchaser so requires, related production capacity and equipment. The sale of Softis handkerchiefs in Germany and Austria amounted to over €20 million in 2006. In conjunction with a sale of Softis, a licence will be granted to the purchaser to use SCA’s Zewa brand (for handkerchiefs) for a limited period.

SCA appoints new president and CEO

On 3 September SCA made a sudden change of CEO. Jan Johansson, currently president and CEO of Boliden AB (a Swedish metals company), has been appointed SCA’s new president and CEO. SCA’s executive vice president and CFO, Lennart Persson, will act as CEO until Johansson can take up his position, a delay of no more than three months. Jan Åström, the outgoing president, vacated his position with immediate effect. SCA’s chairman, Sverker Martin-Löf, stated: “In the Board we see major opportunities for SCA to improve profitability and accelerate its growth rate in prioritized markets in Eastern Europe, Asia and Latin America. This applies in particular to SCA’s consumer products. It is a question of finding the right leadership for the right challenges. We have looked for a CEO whose strong leadership is well documented, who is future-oriented. These are qualities we see in Jan Johansson. “Jan Åström has been president and CEO of SCA for almost six years. In an exemplary manner, he has implemented essential and extensive cost-cutting and efficiency enhancement programmes which has contributed to SCA’s earnings recovery,” Martin-Löf continued.

“In recent years, SCA has succeeded with major and important adjustments in response to changes in customer structures and business climates. I understand and respect the fact that different circumstances require different leadership,” commented outgoing CEO Jan Åström.

Other key changes

The new president is the latest in a succession of executive appointments at the Swedish giant. Other recent announcements include two high-level appointments, both effective 1 September: Christoph Michalski has been named SVP Business Development and Strategic Planning. He succeeds Thomas Wulkan, currently president for the business group SCA Americas. Michalski will report directly to SCA’s president and CEO and will be part of the SCA management team. Johan Karlsson has taken up the position of vice president, Investor Relations, at SCA’s head office in Stockholm. He will report to Bodil Eriksson, SVP, Corporate Communications.

PORTUGAL
RENOVA REBUILD AT TORRES NOVAS

Renova SA, the largest tissue manufacturer and converter in Portugal, has placed an order with Toscotec for a major rebuild of the PM5 tissue machine at its Torres Novas mill. The goal of the upgrade is to improve end-product bulk and to increase production capacity with an energy-efficient approach.

In the light of efficiency and quality improvement, Toscotec will modernize the press section and replace the Yankee dryer. Most advanced and proven technologies will exclusively be used, ensuring smooth project handling, according to a statement from Toscotec.

This rebuild comprises Toscotec's state-of-theart pressing technology, a large suction press roll that will be installed to replace the actual two-press configuration. The new suction roll offers improved pressing performance in terms of dryness, and preserves the softness of the tissue web, guaranteeing a flat profile. Renova PM5 will be the third large suction press in operation, after two successful installations at Wepa. For best exploitation of energy sources, the retrofit will also include Toscotec’s innovative steel Yankee dryer. By using steel instead of cast iron in the manufacturing process, Yankee root thickness is significantly reduced and thermal efficiency consequently increased. Higher operating steam pressure and lower differentials further improve the energy performances.

For Toscotec this is the 20th order for a steel Yankee and the third of 15-ft diameter.


GREECE
GREECE'S PAPYROS PAPER MILL GETS SET TO START TISSUE PM
(NEWS ITEM SUPPLIED BY RISI)

Papyros Paper Mill was due to begin trial runs on its first tissue paper machine in late September. Commercial production on the 80 ton/day PM, installed at its converting plant in Katerini, Greece, is scheduled to follow about 60 days later.

Recard supplied the complete production line. The crescent former machine has a reel width of 2.75 m and a maximum operating speed of 1400 m/min. It will be fed by two 50 ton/day stock preparation lines, one for softwood pulp and the other for hardwood.

The PM will produce tissue paper in a basis weight range of 13-35 g/m2 for hygiene and sanitary end-uses. Papyros Paper Mill will convert all of the unit's output itself.

FRANCE KARTOGROUP TO REBUILD DALLE HYGIENE PM1 Kartogroup France is to rebuild PM1 at its Dalle Hygiene mill, increasing speed from 1300 m/min to 1900 m/min. The rebuild will improve web formation through a new headbox, and sheet quality though elimination of the pick-up shoe, according to machine supplier Toscotec, which has cooperated with Kartogroup on several projects. Start-up is scheduled for end of 2007. The order is part of Kartogroup’s widespread program to optimize production sites to be cost efficient and top quality, continuously innovating and ensuring integrated and complete solutions to retailers. With over 30 years of entrepreneurial and industrial experience and with operation facilities in Italy, France, Spain and Germany, Kartogroup is one of the major privatelabel reference points in the European tissue market Although the main goal of the rebuild is to boost production of PM1, Kartogroup is also investing in product quality by upgrading the machine to satisfy new market requirements for quality and to reduce production costs. The investment further strengthens its position in the French market as a supplier of high-quality tissue. The rebuild package consists of the optimization of the stock preparation system, upgrade of approach flow system and water cycle, rebuild of existing PM1 and supply of a new hood and air system and new drives for tissue machine, air system and fan pump. PM1 is a suction breast roll machine installed in 1989, which has been rebuilt several times and will be converted into a Toscotec crescent former machine Ahead 2.0 model. The machine rebuild will include a new headbox, crescent former section, felt section and renewal of the Yankee doctoring area. The machine is actually focused on recycled waste-based tissue but after the rebuild there will be capability for virgin pulp tissue too. The Toscotec order package also includes complete engineering as well as turnkey dismantling, installation and start-up service for the scope of supply.