SCA is investing in a through-air drying (TAD) machine at its tissue plant in Skelmersdale, the UK. SCA has also decided to close an older tissue machine in Stubbins and signed an agreement to divest its tissue plant in Chesterfield to Sidcot Group Limited.
These measures are part of SCA´s Tissue Roadmap and are aligned with the company's strategy to streamline production and secure capacity for future growth to increase value creation in the Tissue business area.
Following the investment at the Skelmersdale tissue plant of approximately SEK 160 million ($18.2 million), the production capacity of TAD mother reels will be 28,000 tons.
The cost for closing the older tissue machine in Stubbins, with an annual production capacity of 20,000 tons, is expected to amount to approximately SEK 120 million ($13.6 million). The cost will be recognized as an item affecting comparability, mainly taken in the 1Q 2017. Approximately SEK 70 million ($8 million) of these costs are expected to impact cash flow.
Sidcot Group Limited will pay a consideration of approximately GBP 3 million ($4 million) for the production facility in Chesterfield. The facility produces mother reels but has no converting capacity. SCA will have no internal need for the type of mother reels produced at the plant. Closing of the transaction is expected in the 1Q 2017.