With the ambition to be better than competitors
Win in chosen geographies and categories
SCA strives to hold a number one or two position in the geographies and categories where the company chooses to operate. The company compares itself with the best competitors in each product category in each geographic market and aims to perform better or in line with the best competitor.
SCA has a clear priority for which geographic markets it wants to operate in, and which categories it will offer in these markets. Sales are conducted in approximately 100 countries. In around 90 of these, SCA holds the number one or two position in at least one hygiene product segment. SCA’s focus is to grow the profitable market positions and increase market shares. SCA’s ambition is to increase the emerging markets’ share of sales and profit. The company is prioritizing growth in selected emerging markets, such as China, Southeast Asia, Latin America, Eastern Europe and Russia, where the company holds strong market positions. Emerging markets accounted for 32% of the company’s net sales in 2016.
SCA is the global market leader in incontinence products under the TENA brand and in the AfH tissue segment under the Tork brand. Moreover, SCA has strong regional brands and market positions in baby diapers, feminine care and consumer tissue under brands such as Libero, Libresse, Nosotras, Regio, Saba, Tempo, Vinda and Zewa.
The divestment of the hygiene business in Southeast Asia, Taiwan and South Korea to Vinda, a company in which SCA is the majority shareholder, was completed in 2016. The transaction strengthened SCA’s cooperation with Vinda to build a leading Asian hygiene business.
Addressing weak market positions
During 2016, SCA continued work to address weak market positions with inadequate profitability. SCA prioritizes a presence in geographies and in product categories where the company has a leading market position with healthy gross margins and where investments in growth generate a favorable return. SCA has taken the decision to discontinue operations in product categories and in geographies where it concludes that necessary investments are not expected to create value and where profitability cannot be improved within a reasonable time frame. In 2016, this resulted in the company closing its baby diaper business in Mexico and deciding to discontinue its hygiene business in India.
Expanding the customer offering
In order to broaden its product categories and strengthen its market positions, SCA is working continuously to improve and expand its customer and consumer offering. SCA offers, for example, wet wipes in all product categories of its hygiene business. Skincare products and soap are also a good fit. SCA offers soap in the product categories AfH tissue, baby diapers, incontinence products and feminine care products. Expanding the customer offering is also about providing service and solutions to customers and consumers. In the AfH segment, for example, SCA focuses on helping its customers by providing service and solutions to help customers be more efficient and achieve better results at the same time as improving customers’ sustainability profile.
Acquisition of BSN medical
SCA is also reviewing opportunities to add new product categories in its hygiene business in markets where the company has a strong position and sales organization. In 2016, SCA entered an agreement to acquire BSN medical, a leading medical solutions company that develops, manufactures, markets and sells products in wound care, compression therapy and orthopedics. BSN medical has leading market positions in several attractive medical product categories and provides a new growth platform with future industry consolidation opportunities. SCA’s incontinence business, with the globally leading TENA brand, shares similar positive market characteristics, customers and sales channels with BSN medical, which will provide opportunities for accelerated growth through cross-selling. The completion of the transaction is subject to customary regulatory approvals and closing is expected to take place during the second quarter of 2017.
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