SCA Reorganizes for Higher Growth and Profitability

Stockholm, Sweden, 10 March 2008 -- As of 01 April, a new organization is being implemented within SCA. Strong focus is being placed on growth in the hygiene (tissue and personal care products) area.

A global category organization is being established in the hygiene operations. Packaging and the forest products segments will focus on improving cash flow and profitability and, for a limited time, a new position as chief operating officer (COO) is being established to lead this improvement work.

When Jan Johansson became president and CEO of SCA on 01 November 2007, he initiated a total review of the company’s management structure.

“We have concluded that SCA, within the hygiene area, must be quicker and more efficient in order for us to leverage the growth opportunities and also to, in this way, improve profitability. We must have a strong global approach in our hygiene business. Our new organization creates the prerequisites for our businesses to develop based on their respective conditions,” Johansson said.

In the hygiene area, SCA offers baby diapers, feminine hygiene products, incontinence care products, and tissue for consumers and bulk users. It is mainly in the hygiene segment that the growth opportunities exist, especially in emerging markets.

“SCA has already two brands with sales above EUR 1 billion... We intend to strengthen their positions further and also develop several other existing brands to greater positions,” Johansson said. “Within consumer tissue, we have defined significant growth opportunities, while at the same time we need to generate a sharp boost in profitability in mature markets. Baby diapers and feminine hygiene products also have good opportunities for growth based on strong regional positions.”

SCA’s growth will focus on being number one or number two on global or selected markets in hygiene. The new global category organization will be pooling resources from the business areas into a new organization headed by Gunnar Johansson, currently president of SCA’s Personal Care business group. The new unit will drive organic growth. This will be accomplished with a global strategic focus and includes responsibility for brand strategies, consumer insight, and product innovation.

“I place particularly heavy emphasis on increasing the speed to market,” Johansson said.

The strategy for the forest products operations is set, as well as for the packaging operations where an internal consolidation is carried out with undiminished force. However, an active benchmark will be made between the two operations with the aim of benefiting from the positive development that has occurred with regard to productivity and efficiency in the forest products business.

Kenneth Eriksson, currently president of Forest Products, is being appointed chief operating officer (COO) to lead and coordinate the work in these two operations reporting to the CEO. He will be succeeded at Forest Products by Ulf Larsson, head of SCA’s sawmill operations. Rijk Schipper will become president Personal Care Europe. Schipper is currently president of Asia Pacific. He will be succeeded by Christoph Michalski, currently senior vice president Business Development and Strategic Planning.

“The overriding goal is to, through faster growth and improved profitability, significantly increase the shareholder value in the group. With the new, global category organization, more distinct and stronger decision-making is created regarding on which markets and in which segments SCA shall grow,” Johansson said.