SCA continuously works to improve efficiency to strengthen the Group’s competitiveness, cut costs and improve earnings. A more effective supply chain can be achieved by improving production and supplier efficiency and better leveraging economies of scale. Enhanced capital efficiency, lower costs and strengthened cash flow are achieved through efficiency enhancement and savings measures, as well as the optimization of capital employed in all parts of the Group. Establishing more efficient production and processes strengthens the Group’s competitiveness and enables SCA to improve its customer service and customer satisfaction. In most cases, this also results in positive environmental effects. Global functions in the hygiene operations relating to such areas as innovation and brand activities, as well as production, sourcing and logistics, generate cost synergies and enable efficient resource allocation.
Acquisition of Georgia-Pacific
The cost-savings program related to the acquisition of Georgia-Pacific’s European tissue operations was completed at the end of 2015. The savings pertained to production, sourcing, logistics, sales and administration. As part of the cost-savings program in 2015, SCA closed a tissue production plant in France. Savings in 2015 amounted to approximately SEK 930m.
Efficiency improvement measures within Forest Products
The global demand for publication paper has declined during several years, primarily for newsprint, and SCA’s Ortviken paper mill in Sweden has reported weak profitability. Consequently, SCA closed down a newsprint machine at the Ortviken paper mill and recognized an impairment loss for the mill in 2015. Ortviken remains one of the world’s largest publication paper mills and has the prerequisites to be one of the most competitive. Efficiency improvement measures are being implemented at the kraftliner mills in Obbola and Munksund in Sweden. The closure, impairment loss and efficiency improvement measures entail total costs of approximately SEK 1.4bn and will result in annual cost savings of about SEK 180m, of which approximately SEK 120m is attributable to lower depreciation, with full impact in 2017.
Global Safety Week
SCA’s aim is zero workplace accidents. To reinforce behavior in relation to safety awareness and thereby further reduce the number of workplace accidents, SCA held a global safety week for the first time in 2015. The purpose of the week is to direct more focus on the physical work environment, and to promote a culture where safety comes first and where there is substantial awareness of safety rules in order to reduce the number of workplace accidents.