Four years after entering the Indian market, SCA has decided to discontinue its hygiene business there. The decision was made after the company determined that profitability could not be achieved there within a reasonable timeframe. SCA will instead prioritize growth in selected emerging markets such as China, Southeast Asia, Latin America, Eastern Europe and Russia, where the company already holds strong market positions. Emerging markets accounted for 32% of SCA’s net sales in 2015.
The total cost of the discontinuation of operations are expected to amount to approximately SEK 350 million ($37 million) and will be recognized as an item affecting comparability in the fourth quarter of 2016. Approximately SEK 50 million ($5 million) of these costs are expected to impact cash flow.
The hygiene business in India, which reported total net sales of approximately SEK 110 million ($11 million) in 2015—the majority of which related to baby diapers, will be discontinued in the first quarter of 2017.