SCA is opening a production facility in Russia, where it has been seeing rapid growth of its Libero baby diapers and Libresse feminine hygiene products since 1995. The new facility will be located in the Tula region, south of Moscow where consumer buying power is on the rise. This coupled with more families using disposable diapers and the emergence of superstores has been changing consumers behavior, according to the company.
”The Russian market is extremely exciting and this venture is fully in line with SCA’s expressed ambition to expand in Eastern Europe, one of our designated growth markets,” said Jan Johansson, president and CEO.
The investment is estimated at approximately €48 million. The venture is long-term and will gradually include all product groups in SCA’s consumer portfolio for personal care including feminine care, baby diapers and incontinence care.
In other news, SCA is boosting capacity of its European adult incontinence business, as well as its tissue business in Latin America, in response to rising demand. Included in this plan is a new line for Tena pants in Hoogesand, The Netherlands, as well as a new line for Tena Flex at the plant in Gennep, also in The Netherlands.
The investment in Hoogezand is primarily aimed at supporting strong growth in Europe, where sales in the pants segment are outpacing global growth in the segment. The total investment in Hoogezand will amount to €16.7 million, and the plant is scheduled to go into operation at the end of 2009.
The investment in Gennep will amount to €19.8 million and is also designed mainly to satisfy rising growth in Europe. The Flex products are sold primarily to hospitals and nursing homes and the segment is most developed in Europe, where SCA is the market leader. The new production line will be started up in the third quarter of 2009.
SCA’s operations in Colombia, Ecuador, Peru and Venezuela are conducted through the 50%-owned venture capital company Productos Familia S.A., which sells tissue, baby diaper, feminine care and incontinence care products. In response to a robust sales trend for tissue products, the company is now investing in a new tissue machine. SCA’s share of the investment cost is $32.5 million.