SCA to discontinue its hygiene business in India
SCA has decided to discontinue its hygiene business in India. Four years after entering the Indian market, the conclusion is that profitability cannot be achieved within a reasonable timeframe.
SCA prioritizes 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 350m and will be recognized as an item affecting comparability in the fourth quarter of 2016. Approximately SEK 50m of these costs are expected to impact cash flow.
The hygiene business in India reported total net sales of approximately SEK 110m in 2015, the majority of which related to baby diapers.
The hygiene business in India will be discontinued in the first quarter of 2017.