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SCA

Packaging boost for SCA profits

Swedish paper group Svenska Cellulosa (SCA) on Tuesday reported its second quarter net profit rose 18.9 percent to 1.57 billion kronor (171.12 million euros, 236 million dollars), boosted by stronger operating margins, with packaging operations showing sharply improved profitability.

Its sales increased 3.2 percent over the same period last year to 26.12 billion kronor, surpassing the expectations of analysts. Operating profit leapt 16 percent to 2.44 billion kronor.

SCA said the price and volume trend for most of its operations was favourable.

“This, together with the intensive efforts currently underway to strengthen our customer offering and develop an even better customer and product mix, resulted in revenue improvements that well exceeded the increased raw material costs”, chief executive Jan Åström said.

“In my opinion, we will continue to see stable development during the autumn with good demand. At the same time, raw material costs will continue to rise,” he said.

COLOMBIA

Swedish firm SCA in Colombian diaper probe

A company owned by scandal-hit Swedish industry giant SCA is suspected of having been part of two secret cartels to push up the price of, among other things, toilet paper and diapers in Colombia, according to a Swedish newspaper.

Swedish firm SCA in Colombian diaper probe
A company partly owned by a Swedish firm is being investigated for alleged diaper cartels. Photo: Pontus Lundahl/TT

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The companies involved are alleged to have entered into secret deals on the prices as well as quality of their products, reported Swedish newspaper Dagens Nyheter on Tuesday. They are part of an ongoing investigation by Colombian authorities.

Swedish forest and paper group SCA owns 50 percent of one of the firms, Productos Familia, which is a market leader in the Colombian soft paper industry.

The company, which among other things produces diapers and toilet paper, is accused of having been involved in starting these suspected cartels in 1998 and 2000.

“We take all these suspicions seriously. Familia cooperates fully with authorities to assist the investigation. The probe concerns activities up until 2013 and extends to, apart from Colombia, other countries in South America. It is yet too early to say exactly what and which countries are part of this,” SCA sustainability officer Kersti Strandqvist told Swedish newspaper Dagens Nyheter.

Stockholm-based SCA is Europe's largest private owner of forest land and manufactures paper, mainly to be used for personal care products.

The reports come as the company struggles to restore its reputation after reports of “excessive” use of private jets by its corporate heads.

READ MORE: How private jets took down a Swedish industry giant

Earlier this year, it was claimed that managers' families had been taken to a hunting lodge owned by SCA and that spouses and children had accompanied executives on foreign business trips, including to the Olympic Games in London in 2012.

The scandal caused unprecedented upheaval to Sweden's boardrooms, with four of its biggest companies – Handelsbanken, Industrivärden, SCA and steelmaker SSAB – all receiving new chairmen earlier this year.