SCA Announces Plan to Grow Tissue Business in South

SCA announced that to improve its tissue operations in the United States, it is looking at building a new tissue facility in Florence, Ala.

SCA has sales of away from home tissue throughout the country. The company also owns converting facilities in each region. However, converting capacity is limited in the south. In addition, production of base tissue is unevenly distributed in relation to sales of converted products, with SCA’s operations in the southern region of the U.S. being conspicuous because of the absence of proprietary capacity in base tissue.

In conjunction with the acquisition of Georgia-Pacific’s AFH tissue assets, SCA gained control of 450,000 tons of converted products, but only 370,000 tons of base tissue. To secure access to base tissue, the purchase contract stipulated that Georgia-Pacific would supply up to 120,000 tons over a six-year period. The new tissue machine will substantially reduce the level of external supplies, generating considerable savings.

The converting of tissue will be conducted partly on new converting lines and partly on older lines that are being transferred from three converting units (Brattleboro, Vt., and Atlanta and LaGrange, Ga.) in the northeastern and southern US, which will be closed in conjunction with this project.

The project involves old and new converting lines, a tissue machine with a capacity of 110,000 tons and a recycled fiber plant. Additionally, the project includes the construction of storage facilities and a distribution center.

The total investment cost for the project amounts to about $240 million.