EU approves SCA’s acquisition of Georgia-Pacific’s European tissue business

SCA’s acquisition of Georgia-Pacific’s European tissue business has been approved by the European Commission.

The deal was completed on 5 July and the purchase price amounts to €1.32bn on a debt free basis. The operations have approximately 4,700 employees.

Georgia-Pacific’s European tissue business comprises of 15 plants located in seven countries and the Lotus brand will be transferred to SCA´s ownership.

Consolidation: SCA president Mats Berencreutz

SCA executive vice president Mats Berencreutz told TW: “There will be synergies between our existing operations and Georgia-Pacific´s in order for us to be able to better serve our customers.

“The synergies are estimated to approximately €125m at a cost of some €130m. After the EU approval, we will work towards a closing of the deal and see what further synergy results we can achieve together over the next two to three years.”

He added that Europe is the company’s “home market” where it has the majority of its business – two thirds of its tissue business before the Georgia-Pacific deal.

He said: “The acquisition of Georgia- Pacific´s European tissue operations will contribute to further consolidate the European tissue market and will be a good opportunity to strengthen our activities in Europe.

“A strong European business is a prerequisite for us to grow in emerging markets.”

The EU´s clearance requires divestment of Georgia-Pacific´s consumer tissue business in the UK including production capacity, Georgia-Pacific´s Benelux consumer tissue branded business under the Lotus brand and some of Georgia-Pacific’s and SCA’s retailer branded business in Scandinavia including production capacity.

RUSSIA

SCA breaks ground for new tissue PM project in Russia

SCA has started construction of a new tissue production line at its Sovetsk mill in the Tula region of western Russia.

The €130m ($164m) investment includes a new 60,000tpy tissue PM as well as several converting lines and warehouses. SCA will also build an international distribution centre at the site, for which the firm allocated additional €15m.

The 5.4m wide PM, which is scheduled to come online in 2014, will be supplied by A Celli. The unit will use virgin fibre as raw material. Its output will be converted into tissue products under the Tork and Zewa brands on two new converting lines supplied by PCMC.

The mill also intends to launch manufacturing of Tork products used in the business and institutional environment, such as Matic hand towels and two-ply jumbo toilet paper rolls.

Most of the production will be sold to the Russian market, with the rest going to the CIS markets.

The investment is aimed at strengthening the firm’s position on the Russian market.

SCA’s tissue plant in Sovetsk currently houses one paper machine, which produces 30,000tpy of recycled fibre based tissue.

SCA also operates a tissue plant in Svetogorsk, in the Leningrad region, which manufactures some 43,000tpy, and a personal care plant in Veniov, in the Tula region, which produces Libero and TENA products.

News from RISI (www.risiinfo.com)

SPAIN

Spanish tissue producer Prietopapel hopes to restart production

Prietopapel, a tissue producer based in southeastern Spain that has been idle since late March, hopes to restart production under new ownership.

The tissue mill, based in Murcia, had to cease production on 28 March, after its electricity supply was cut due to unpaid bills.

At the time of going to press, the firm was in talks with potential buyers and reportedly about to sign a preliminary sales agreement with an undisclosed party.

According to a person familiar with the situation at Prietopapel, the sale of the mill is the only means that would allow for the restart of production at the site, as the firm’s liabilities with the power company are immense and it lacks the necessary funds to pay them off.

The family-owned Prietopapel was founded in 1956. It used to produce some 15,000tpy of tissue from 100% recycled fibre and had about 60 employees. They have been on temporary leave since the mill was forced to idle production.

News from RISI (www.risiinfo.com)

UK

UK tissue converter Accrol Papers set for growth

UK independent soft tissue converter Accrol Papers is set for more growth following an extensive investment programme carried out over the past few years.

Founded in 1993, the family-run firm spent some £25m ($38m) on new machinery and premises in recent years. The latest investment was a 120,000 square foot office space and warehouse facility in Blackburn, Lancashire, that was officially opened in late March.

Over the next two years, Accrol Papers plans to spend a further £30m. The firm recently secured £1.4m from the second round of the government’s Regional Growth Fund to help bolster its expansion plans, which partially supported the new office space and will also help to refurbish other facilities onsite and create more than a hundred new jobs.

“We have exciting plans for the future and we hope that we will soon be able to announce the construction of a further new manufacturing facility which will lead to the creation of an additional 150 jobs,” Accrol Papers’ managing director Majid Hussain said.

A spokesperson for the firm added that Accrol Papers is mulling the construction of another 120,000 square foot facility. “If the plans go ahead we will be opening the facility early next year,” he added.

Accrol Papers claims to be the fourth largest soft tissue converter in the UK with manufacturing capacity in excess of 75,000tpy. The firm’s output includes over one million toilet rolls and 250,000 kitchen rolls each day.

Accrol Papers has more than 200 employees, and the firm’s sales are currently tracking at £80m per year.

News from RISI (www.risiinfo.com)

‘Excellent growth’ sees PCMC open facility

Paper Converting Machine Company (PCMC) has relocated its UK business with the opening of a new 2,000m2 site in Plymouth (pictured above). A spokeswoman for the company said the move was on the back of “an excellent order book and growth of new product line.” The new base keeps the company in Plymouth, and will be split equally between offices and assembly space. PCMC specialises in the design and manufacture of high performance converting machinery for the global tissue, nonwovens,package printing and envelope manufacturing industries.