“A new efficiency programme has been initiated within the hygiene operations to further reduce costs and increase productivity,” SCA President and CEO Jan Johansson said in a statement.
“It will provide annual cost savings of some €300 million, with full impact in 2015. About 1,500 employees are affected and costs are expected to amount to €100 million.”
Spokesman for SCA, Petter Tiger, wasn’t able to say exactly where the cuts would be made:
“We will be looking at every division,” Tiger told the TT news agency, without being able to disclose how many of the company’s workers in Sweden will be affected.
Currently SCA has some 37,000 employees. The 1,500 redundancies in the hygiene operations mean that 4 percent of the overall work force will be cut.
26,000 of the 37,000 employees are currently working within hygiene product manufacturing. It is still unclear how many of the redundancies will affect workers in Sweden.
The cuts in the hygiene operations are made despite strong third quarter sales, profits and profitability.
Since launching the efficiency programme in 2011, the company has achieved more than half of the expected annual savings of €80 million.
During the past year, SCA completed a number of major acquisitions and divestments. The hygiene operations currently account for 80 percent of SCA’s sales, with the majority in Europe.
The company nevertheless plans to retain its previous targets of a 13 percent return on capital employed over a business cycle, a debt/equity ratio of 0.70 and a debt-payment capacity of 35 percent.
The dividend policy is to pay out one-third of cash flow from current operations, the company said.
Founded in 1929 by Swedish industrialist Ivar Kreuger, better known as the “Match King”, SCA is one of the world’s largest forestry and packing products firms, as well as Europe’s largest private owner of forest land.