SCA strengthens standing through acquisitions in Latin America, China

SCA has acquired the remaining 50% stake in PISA (Papeles Industriales S.A.) making it the sole owner of the Chilean hygiene company. The purchase price was reported at $76 million. PISA’s annual sales are approximately $115 million. While its primary activities lie in the away-from-home and consumer tissue markets, SCA has been using PISA’s sales and distribution networks as a means to introduce its TENA adult incontinence products since acquiring the initial 50% stake in the company in 2003.

“The time is ready for us to take the next step in our expansion in Latin America, where the PISA acquisition further streng­thens our presence in this important growth market,” says Jan Johansson, SCA CEO and president. Elsewhere in Latin America, SCA became the owner of Descart, a Brazilian adult incontinence product manufacturer, in September 2011.

In other company news, SCA also acquired an additional 5% of the shares in the leading Chinese tissue company Vinda. The purchase price is around SEK600 million. The seller in the transaction is Fu An, a company majority owned by Mr. Li, chairman of Vinda. SCA’s share in Vinda after the transaction will be 22.6%.

Vinda is one of the most successful tissue producers in China, the second largest tissue market in the world. Currently, Vinda commands strong brand recognition in the country and is the third largest player in the China household paper industry in terms of marketshare and production capacity. The company has eight production facilities with a total production capacity of 470,000 tons and targeting to reach 1 million tons in the coming years.

“The market for tissue products in China continues to grow well and continues to consolidate with the larger players, like Vinda, growing at a significantly faster speed than the market,” says Johansson. “We intend to be among the leading players in China and we have for this reason taken the decision to increase our ownership in Vinda.”

The transaction is subject to receiving consent from some of Vinda’s lending banks. Vinda is listed on the Hong Kong Stock Exchange.


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