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SCA Forest Products and Heinzel Group Co-operate in Sales and Marketing

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Sundsvall, Sweden, Dec 19, 2012 - The Heinzel Group will acquire SCA’s publication paper mill in Laakirchen, Austria. SCA and Heinzel have also decided that the two companies will co-operate in sales and marketing of publication papers, pulp, kraftliner and products for flexible packaging. One effect of this will be that SCA’s sales offices in Poland and Italy will be acquired by Heinzel Group.

In 2011 Laakirchen reported totaled sales of EUR 335m and had just over 500 employees. The annual capacity amounts to more than 500,000 tons.

The initial purchase consideration is EUR 100m with a possible maximum additional purchase price of EUR 100m based on a two-year profit-sharing model. In conjunction with the transaction, an impairment of EUR 50m has been recognized, which will be charged to profit in the fourth quarter of 2012.

The transaction is expected to be finalized in the first quarter of 2013 following approval by the relevant authorities.

In conjunction with the divestment, SCA and Heinzel Group have concluded a sales cooperation agreement. SCA Forest Products’ and Heinzel Group’s sales organisations complement each other and SCA will have a stronger representation on several markets for its publication paper, pulp and kraftliner products. The sales collaboration is scheduled to come into effect when the transaction has been finalized.

Following the divestment of Laakirchen, SCA’s remaining publication papers operations will be concentrated to Sweden, close to its forest holding.

After Heinzel Group’s acquisition of the paper mill in Laakirchen, SCA Forest Products produces uncoated offset and coated publication papers in the Ortviken paper mill, pulp in the Östrand pulp mill and kraftliner in the paper mills in Munksund and Obbola, all located in Sweden. The Heinzel Group produces super calendared publication paper (SC) in Laakirchen, pulp and flexible packaging in Pöls and BCTMP in Estonian Cell.

"The two companies have complementing products", says Rolf Johannesson, vice president sales and marketing at SCA Forest Products. "Our presence and strength differ on various markets in and outside of Europe. We are now establishing a sales co-operation where we will make best possible use of the strengths of both companies to give our customers an even better service offering and to develop our market positions where the prospects for present and future products look most promising."

In Scandinavia, the Baltic States and on the British Isles, SCA will be responsible for the sales of the products of both companies. In BeNeLux, SCA will sell all SCA products and SC Paper from Laakirchen. In Eastern Europe, Greece, Turkey, Poland and Italy, Heinzel Group will be responsible for the sales of both companies’ products. In Germany SCA will continue to sell publication papers from both SCA and Heinzel and kraftliner from SCA, while Heinzel will be responsible for the sale of pulp from both companies. On other markets in Europe responsibilities are distributed between the sales organizations of SCA and Heinzel, with the ambition to best develop the strong positions of both companies.

On the markets outside of Europe, responsibilities will be divided in the same way, depending on which one of SCA and Heinzel Group is having the strongest and most promising positions.

Heinzel Group will keep the Grapho brands for SC-products from Laakirchen. Products like GraphoVerde and GraphoNova are well known and have a strong market position.

"We will co-operate in all fields where it is beneficial for both parties", says Andrew Paul, CEO Heinzel Sales. "SCA has amongst others a technical customer support that is well appreciated by the customers and that is supported by competent staffs in the mills. Now the customers of Heinzel Group will also get access to this valuable resource."

In the co-operation are, where applicable, included volumes from Aylesford Newsprint to customers on the European continent.


Extpub | by Dr. Radut