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Svenska Cellulosa SWOT & PESTLE Analysis

ID : 52418753| Sep 2020| 15 pages

COMPANY PROFILE -Svenska Cellulosa AB

Business Sector :Paper and Forest Products

Operating Geography :Sweden, Europe

About Svenska Cellulosa AB :

Svenska Cellulosa AB is a Swedish timber, pulp and paper manufacturer founded in 1929 by Ivar Kruegeur, currently with headquarters in Sundsvall. The main segments include forest, papers, wood, pulp and renewable energy. The Company is the largest owner of Private forest land in Europe with 2.6 million hectares. In 2015, the SCA's personal care and hygiene operations and forest operations were divided into two different divisions, later the two were listed as separate companies. The SCA retained forest product segment and new company named Essity was formed to handle personal care and hygiene products.

Svenska Cellulosa AB Revenue :

SEK 16,664 million (FY ending December 31st, 2017)(y-o-y growth – Almost 8%)
SEK 15,373 million (FY ending December 31st, 2016)

Ownership / Major shareholders :

Industrivärden 9.5%, Norges Bank 7.2%, Swedbank Robur Fonder 4.5%, AMF Försäkring & Fonder 4.4%, BlackRock 3.4%. (March 31, 2018)

Competitive Analysis of Svenska Cellulosa AB

The SWOT analysis of Svenska Cellulosa AB (SCA) is presented below:
1. Strong brand identity supported by core values
2. Comprehensive range of building materials with global sales:
3. Strong Financial Performance
4. Strategic Acquisition to Drive Growth
5. Strong value chain with modern and efficient sawmills
6. Strategic investments enhancing competitiveness
1. Decline in R&D investments
2. Lowered credit ratings to ‘BBB’
3. High exposure to currency risk
1. Potential in emerging markets
2. High scope in renewable energy and logistics segment
3. Opportunities in high growth e-commerce and food safety packing segments
1. Digitalization of publication paper
2. Staying relevant in a fast-changing packaging world
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Detailed SWOT Analysis of Svenska Cellulosa AB


1. Comprehensive range of building materials with global sales: SCA provides high quality wood products to customer, who are divided into three segments namely retailers, industry and homeowners. Some of the products offered are machined softwood, carcassing, MDF, sheet materials, saw timber and raw materials. SCA products are superior to its competitors because of following reasons (i) forests in Nordic region gives SCA access to high quality raw material, (ii) superior technology and innovation employed in every step of production and (iii) SCA gives comprehensive solution e.g. for industrial customers in Europe along with raw material supply SCA provides logistics solution and warehouse IT solutions. These factors help SCA in retaining the customers, generating additional revenue and improve the operational efficiency.

2. Consistent financial performance: Over the past two decades, Svenska Cellulosa’s average sales growth is 10% per year. In FY 2017, SCA sales grew by 8% due to healthy demand for the products, especially in wood products and Kraft liner. In spite of marginal increase in the price of products, the EBITDA has increased by 15% to SEK 3,761m and EBITDA margin has increased by 22% compared to previous financial year. The operating profit for the period was SEK 2,511m and operating margin was 8.42%.

3. Strategic Acquisition to Drive Growth: SCA has made substantial business investments in strategic acquisition of companies to gain foothold in Asian and South American market. In 2007, SCA acquired the Proctor and Gamble’s European tissue business, including brands such as Tempo which was leading brand in Europe and Hong Kong. In 2009, on similar lines, SCA acquired Algodonera Aconcagua and Copamex, the leading brands in Argentina and Mexico, to expand business. In 2014, it acquired majority stake in Vinda, one of the largest tissue manufactures in China, which helped in expanding business to China, Australia, New Zealand and Fiji.

4. Strong value chain with modern and efficient sawmills: In SCA, base of every segments business and operations is forest. The SCA owns, 2.6 million hectares of forestland, the largest private forest plantation in Europe and hence it has control from seedling to every part of felled tree. SCA owns mills across Europe to process the timber and the chip from this process are used in pulp manufacturing process and any remaining waste material is used in creation of biofuels. The company’s five sawmills are the largest in Europe and have been equipped with the latest technology and digital industrial automation. It is seen that SCA is gaining operational efficiency due to strong backward integration in value chain.

5. Strong brand identity supported by core values: SCA’s three core values are (i) responsible, (ii) excellence and (iii) respect. These values drive have helped in delivering superior customer service, good relationship with suppliers and Governments and hence contributed to developing a strong brand name in paper and forest product industry. Core values is one of the component of materiality analysis adopted by SCA in determining the strategic focus areas of business. The company ensures that supplier adhere to these values by conducting supplier audits and evaluation, if required providing necessary assistance to potential partners. All these factor into creating lasting and fruitful relationship with supplier.

6. Strategic investments enhancing competitiveness: SCA has been making prudent strategic investments. SCA is the owner of largest sawmill in Sweden, located at Tunadal sawmill in Sundsvall, which achieved record production in 2017. With increase in demand for high-quality packaging paper, SCA has strategically invested to increase production of White- top kraftliner at Munksund paper mill. An investment of SEK 7.8bn was made in expansion of Östrand pulp mill. The wood handling unit which began in 2017 receives far more raw material (timber) by rail. Östrand will secure demand for pulp wood in northern Sweden to meet demand for high-quality pulp based on fresh fibre.


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This section is available only in the 'Complete Report' on purchase.


1. Digitalization of publication paper: According to a report by McKinsey, the demand for publication paper is declining from 2015 and this rate of decline would be steeper in future. Moreover, even in SCA’s quarterly report there has been acknowledgement by management regarding this decline. So, there is a possibility of decline of revenue and hence earnings from paper segment in coming years.

2. Staying relevant in a fast-changing packaging world: Kraftliner is one of the biggest contributor to revenue of SCA. But, this segment has to deal with increasing pressures about cost, resource conservancy, and sustainability, because plastic packaging continues to grow at a faster pace than fiber-based packaging. There is increasing pressure on company to create differentiated and distinct customer value proposition to customer and achieve commercial excellence at the same time.

Major Competitors :

Stora Enso, UPM-Kymmene Oyj, Oji Holdings, International Paper Company, Weyerhaeuser Corporation, Nippon Unipac Holding.

Major Brands :

SCA Kraftliner, GraphoCote, SCA Logistics.

Key Business Segments / Diversification :

Svenska Cellulosa AB
Containerboard Publication papers PulpSolid-wood products Forest-based biofuel and wind power Forests

Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :

Open Table Preview
Business Segment
Objective/Synergy Achieved
EssityGlobal hygiene products2017Spin-off (Split)Split of SCA’s hygiene operations division Essity from the main company.
Source: Company website and other reliable sources. The detailed table is available in the Complete Report.
SWOT & PESTLE (combined)
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References used in Svenska Cellulosa AB Analysis Report


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Danone SWOT and PESTLE analysis has been conducted by Pavankumar S and reviewed by senior analysts from Barakaat Consulting.

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