STOCKHOLM, Aug. 26, 2020 /PRNewswire/ -- SCA intends to
invest SEK 1,45bn in the production
of chemically pre-treated thermo-mechanical pulp (CTMP) at the
Ortviken paper mill in Sundsvall. In parallel, SCA is initiating
consultations with trade unions and employee representatives to
discontinue the production of publication paper at the
SCA intends to invest to achieve an annual production volume of
300,000 tonnes of CTMP pulp at Ortviken, using the existing
infrastructure. The investment is expected to give a positive
EBITDA-effect of approximately SEK
0.3bn per annum. Expected start of production in the new
mill is the beginning of 2023. SCA today has a production capacity
of 100,000 tonnes of CTMP pulp at the Östrand pulp mill. This
production will be phased out when the new line starts up, which
will allow a future increase in the production of kraft pulp at
Östrand Pulp mill.
"Our pulp customers want us to grow with them in product segments
such as packaging board and hygiene products, segments with healthy
growth," says Ulf Larsson, SCA's
CEO. "In line with our strategy, we have gradually reduced our
exposure to publication paper. We now initiate negotiations to
leave this product segment completely."
Currently, SCA produces coated and uncoated publication paper on
three paper machines at Ortviken paper mill with annual sales of
approximately SEK 4bn. Demand for
publication paper in Western
Europe has declined by approximately 5% per year since 2008.
During the coronavirus pandemic, demand for publication paper
decreased by a further 30-40% and production at Ortviken paper mill
has been adapted to the weak order level. This low demand, combined
with a weak price development, results in a negative profitability
for the operation.
The closure of publication paper manufacturing at Ortviken paper
mill proposed by SCA will affect about 800 employees, primarily at
Ortviken paper mill, but also in other parts of SCA's operations.
The closure would result in non-recurrent costs with cashflow
effects which are estimated not to exceed SEK 0.9bn and an impairment of about SEK 1.1bn.
"Through today's proposals, we intend to continue to develop a
strong, sustainable and profitable industry based on our renewable
forest raw materials", says Ulf
Larsson. "This will have a significant impact on many people
and we will in a responsible way seek the best possible solutions
for those affected."
Negotiations under the Co-determination at Work Act (MBL) with
trade unions will now begin regarding the plans to discontinue
paper production at Ortviken paper mill, the investment in CTMP
production at Ortviken and the impact on other SCA operations. In
other jurisdictions affexcted employees and their representatives
will be informed and consulted in line with the legal
INVITATION TO PRESS CONFERENCE
The press conference can be followed via webcast or telephone.
The President and CEO, Ulf Larsson,
and CFO, Toby Lawton, will present
the background to the intended investment and the proposal to
discontinue publication paper production, and answer any
Time: Wednesday August 26, 2020,
at 10:00 a.m.
The press conference will be webcast live at www.sca.com. It is
also possible to participate by telephone by calling:
Sweden: +46 (0)8 5069 2180
UK: +44 (0)2071 928000
US: +1 631 510 7495
State "SCA" or the conference ID: 1249139.
For further information, please contact
Björn Lyngfelt; SVP Communications. +46 (0)60 19 34 98
This is information that SCA is obliged to make public pursuant
to the EU Market Abuse Regulation. The information was submitted
for publication, through the agency of the contact person set out
below, on August 26, 2020 at
08:00 a.m. CET.
Björn Lyngfelt, Vice President, Communications, +46 (0)60 19 34
The core of SCA's business is the forest, Europe's largest private forest holding.
Around this unique resource, we have built a well-developed
value chain based on renewable raw material from our own and
We offer paper for packaging and print, pulp, wood products,
renewable energy, services for forest owners and efficient
In 2019, the forest products company SCA had approximately 4,000
employees and sales amounted to approximately SEK 19.6bn (EUR
SCA was founded in 1929 and has its headquarters in Sundsvall,
Sweden. For more information,
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