SCA Strengthens Its UK Tissue Business

To meet the growing demand for high-quality tissue and strengthen the product offering in the UK, SCA is investing in a through-air drying (TAD) machine at its tissue plant in Skelmersdale.

SCA has also decided to close an older tissue machine in Stubbins and signed an agreement to divest its tissue plant in Chesterfield to Sidcot Group Limited. These measures are part of SCA’s Tissue Roadmap and are aligned with the company’s strategy to streamline production and secure capacity for future growth to increase value creation in the Tissue business area. Both initiatives are subject to customary consultation with employee representatives.

Following an investment at the Skelmersdale tissue plant of more than £14million, the production capacity of TAD mother reels will be around 28,000 tons.

The cost for closing the older tissue machine in Stubbins, with an annual production capacity of 20,000 tons, is expected to amount to just over £10m, and the cost will be recognised as an item affecting comparability, mainly taken in the first quarter of 2017. Just over £6m of these costs are expected to impact cash flow.

Sidcot Group Limited will pay a consideration of approximately £3m for the production facility in Chesterfield. The facility produces mother reels but has no converting capacity. SCA will have no internal need for the type of mother reels produced at the plant. The annual production capacity is 31,000 tons. Closing of the transaction is expected in the first quarter of 2017.

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