SCA, a leading global hygiene and forest products company, has decided to discontinue its India operations in first quarter of next year. The company will, instead, prioritise growth in selected emerging markets such as China, Southeast Asia, Latin America, Eastern Europe and Russia, where the company already holds strong market positions.

 

“Four years after entering the Indian market, our conclusion is that profitability cannot be achieved within a reasonable timeframe,” the company said while announcing its decision to discontinue its hygiene business in India.

 

The total cost of the discontinuation of operations are expected to amount to approximately SEK 350 million ($37.92 million) and will be recognised as an item affecting comparability in the fourth quarter of 2016. Approximately SEK 50 million ($5.42 million) of these costs are expected to impact cash flow.

 

In 2015, emerging markets accounted for 32 per cent of SCA’s net sales.

 

The hygiene business in India reported total net sales of approximately SEK 110 million ($11.92 million) in 2015, the majority of which related to baby diapers. (RKS)