Sca Shape Magazine Issue 1 2007

A MAGAZINE FROM SCA ON TRENDS, MARKETS AND BUSINESS Nº 1 2007

SHAPE

BIG CHAINS BUILD BRANDS

Clean sweep BLOGS CAPTURE CONSUMERS’ IMAGINATION

OLYMPIC GOLD FOR CHINA IN HYGIENE 2008

STRONG SAILING FOR WIND POWER COPPER POTS MAKE STRONGER TREES

BABY DIAPERS GO HIGH FASHION HOW TO KEEP LOBSTER FRESH

Sky-high patent numbers * Sustainable transport with CTI * Build it out of wood

Content Nº 1 2007

At eight o’clock in the evening on the eighth day of the eighth month of the year 2008, the opening ceremony for the Beijing Olympic Games will begin. COVER page 6-13.

6 THE OLYMPIC GAMES ARE OF ENORMOUS POLITICAL IMPORTANCE TO

CHINA.

EXPERTS HAVE BEEN CALLING IT CHINA’S

COMING-OUT

PARTY.

▲

04 SHAPE UP A record number of patent applications. Incontinence protection growing in the US. And more news from around the world.

06 SHAPE COVER Beijing is getting ready for the Olympic Games in 2008. Air pollution will be reduced by relocating more than 100 factories.

14 TRENDS Seafood and wind power are more popular than ever before. Read the latest trends, including new ways for finding out what consumers really want.

19 PROFILE

14

Andrew Cookson predicts trends in the retail food business. According to Cookson, people are now more willing to buy lower-quality products to have enough money left over to to buy cellphones.

24 TECHNOLOGY Trees need a well-developed root system in order to grow well. Find out how copper can help.

26 SCA INSIDE Tork won the Wembley contract, Libero is sellling well and Packaging operations in North America have been sold – all that and more news from SCA.

30 CAMERA What does Scandinavia’s tallest wooden residential building look like? See page 30.

34 SHAPING A VIEW

19

Andrew Winston helps leading companies think environmentally to drive growth.

30

26

SCA Shape An SCA Group magazine Address SCA, Communications and Investor Relations, Box 7827, SE-103 97 Stockholm, Sweden Telephone +46 8 7885100, Telefax +46 8 6788130 Publisher Bodil Eriksson Editor-in-chief Anna Selberg Editorial management Anna Selberg, SCA and Göran Lind, Appelberg Design Tone Knibestöl, Appelberg Print Sörmlands Grafiska Quebecor AB, Katrineholm Cover Frans Hällqvist SCA Shape is published in Swedish and English. The contents are printed on GraphoCote 80 g from SCA Forest Products. Reproduction only by permission of SCA Corporate Communications. The opinions expressed in this publication are those of the authors or persons interviewed and do not necessarily reflect the views of the editors or SCA. You can subscribe to SCA Shape or read it at www.sca.com.

[ 1 *2007 ] SHAPE SCA *3

SHAPE UP RECORD NUMBER OF PATENT APPLICATIONS

Number of patent applications in 2006

Change over 2005

USA

49,555

6.1%

Japan

26,906

8.3%

Germany

16,929

5.8%

South Korea

5,935

26.6%

France

5,902

2.8%

Britain

5,045

-0.8%

The Netherlands

4,393

-2.7%

China

3,910

56.8%

Switzerland

3,403

3.8%

Sweden

3,123

8.7%

Boom in Asian retail trade

Shopping is fun in Asia and the local retailers have high expectations for the future. 4*SCA SHAPE [ 1 *2007 ]

■ The future of retail trade in Asia looks highly promising. Three out of four companies expect higher sales in the next 12 months. A similar number say they plan to expand or build new stores on other sites or in other cities, according to the real estate services company Jones Lang LaSalle, which interviewed retailers in China, Singapore, Thailand, Malaysia, Indonesia and India. Buyers in the home furnishings and decorating industry are among those with the highest expectations for the future, followed by sports stores, department stores, jewelry stores and grocery stores. The most optimistic buyers are those in India, as a result of strong economic growth, greater purchasing power and increasing tourism.

ILLUSTRATION: GETTY IMAGES

27 percent, propelling that country past Britain and France to fourth place in the world. China had the fastest growth by far, at 57 percent, and has nearly quadrupled its number of patent applications since 2002. In terms of industries, telecommunications had the largest share of applications (10.5 percent), followed closely by pharmaceuticals and information technology (10.4 percent each).

The world wants more

ENERGY PHOTO: GETTY IMAGES

■ The number of patent applications in the world increased 6.4 percent in 2006 to 145,300, the most ever, according to statistics from the World Intellectual Property Organization. The US still dominates, with almost 50,000 applications, a rise of roughly 6 percent over 2005. Rapid growth in research and innovation in East Asia led to a sharp increase there. Patent applications in South Korea rose

DESPITE THE THREAT to the climate and the ongoing debate over how we should reduce energy consumption, world demand for energy continues to rise, according to a report from McKinsey Global Institute. The report predicts average growth of 2.2 percent over the next 15 years, higher than during the last 15 years. Demand is increasing even though energy use is becoming ever more efficient. Efficiency is rising by 1 percent a year on average. Largely pushing the demand is growth in developing countries and rising private consumption there. McKinsey believes the higher demand can be met with more efficient energy use. Today there are major shortcomings in areas such as information in the consumer chain and price structure, resulting in inefficient energy consumption. McKinsey thinks the potential for further efficiencies is as great as 15 to 25 percent through to 2020.

INCONTINENCE PROTECTION GROWING IN THE US ■ The market for urology and incontinence devices in North America will grow by nearly 50 percent over the next five years, according to a report from the Millennium Research Group, which conducts market analysis in the healthcare and pharmaceutical sector. Today the market is worth USD 1.8 billion, and by 2011 it will increase to USD 2.6 billion, equivalent to annual growth of 7.6 percent. One factor behind this growth is the rapid development of new products, according to Millennium.

SPAIN’S GROWTH IS TOPS AMONG BIG EU COUNTRIES ■ Spain had the fastest economic growth among the big EU countries in 2006, with a GNP that rose 3.8 percent. A strong construction market, immigration from South America and Eastern Europe, rising tourism and more winter residents from northern Europe are among the reasons for the strong Spanish growth. France had the weakest growth in the EU, with 2 percent. Topping the list among the small EU countries were Slovakia with 7.5 percent and the Czech Republic with 6.2 percent.

BETTER TO SHOP OFTEN THAN FOR A LOT

PHOTO: GETTY IMAGES

People who shop weekly pay several hundred euros more annually on food than people who shop a little every day, Swedish research shows. The reason for this is that people buy too many perishable goods, like fruits and vegetables, when they buy on a large scale, according to a survey from Umeå University.




Spring Collection of trendy diapers ■ In May, SCA will launch a limited edition in the Nordic countries of its first designer diaper under the name Spring Collection – a trendy line of diapers with cute, hip design patterns with glamour and a retro feel that make the diaper more of a complete undergarment. “Children’s clothes are one of the most enjoyable things for many parents,” says Fredrik Krook, cat-

egory marketing manager at SCA Personal Care. “We give parents with young children a chance to express their interest in fashion and design in their choice of diapers. Our Spring Collection is a unique edition with fun new prints on something as everyday as diapers.” Many people enjoy fashion, design and glamour, and they still have this interest when they become

parents, as reflected in the large range of accessories and clothes for children available today. Parents of small children change more than 2,000 diapers in a single year. Libero Up&Go wants to make this everyday activity into something fun. Spring Collection is sold at the same price as regular Up&Go diapers, and the edition is available for a limited time of up to eight weeks.

[ 1 *2007 ] SHAPE SCA *5

SHAPE COVER

CHINA GOES FOR THE GOLD IN HYGIENE Public health and hygiene campaigns are playing a central role in the run-up to the 2008 Beijing Olympic Games. BY JAN HÖKERBERG

6*SCA SHAPE [ 1 *2007 ]

frastructure projects such as subway-line extensions and new highways; construction and renovation of 37 venues in and outside Beijing; refurbishing tens of thousands of buildings; clearing slums; creating parks; organizing essential security issues, and so on. So far, the organizers seem to have done a great job, at least according to Jacques Rogge, president of the International Olympic Committee. At an inspection tour in October 2006, he noted that the venues for the 2008 Beijing Olympic Games were “the best I have ever seen.” Rogge visited the National Stadium, a new modernist venue woven in concrete and steel to resemble a bird’s nest, and the National Aquatics Center, a giant “water cube” of blue bubbles. He said the venues are beautiful and he was deeply impressed. He is also known to be very happy with the progress of the work on the venues, since Beijing has been way ahead of schedule with its preparations, in sharp contrast to the 2004 Athens Games and other recent Olympics. Construction of venues has been moving at such a rapid pace that in 2005 the International Olympic Committee even ordered Beijing to slow down to avoid high maintenance costs.

PHOTO: SCANPIX

THE OLYMPIC GAMES ARE of enormous political impor-

▲

EIGHT IS A LUCKY NUMBER in China, symbolizing prosperity and development. So at the eighth evening hour of the eighth day of the eighth month of the year 2008, the opening ceremony for the Beijing Olympic Games will begin, spreading the motto “One World, One Dream” to the world. It will be only the third time the Olympic Summer Games have been held outside the western hemisphere, after Tokyo in 1964 and Seoul in 1988. Time will tell how lucky China has been to host such a huge event. Some USD40 billion will be spent on these 29th Summer Olympics. Will it bring more wealth to the world’s most populous nation? Will it improve living conditions for Beijing residents? Will it lead to fewer traffic jams and better air quality? There are numerous projects that the local organizing committee has initiated in its preparations for the games: in-

tance to China. Experts have been calling it China’s “comingout party.” The games are designed to show off the country’s economic achievements and demonstrate its growing pride and confidence. China sees the Olympics as an opportunity to strengthen its ties with the West, and to show the international community that the country has the ability to hold such events. “It is a huge challenge for Beijing. Big improvements have to be made at the airport and with the city traffic. However, when China decides to do something they normally make it happen,” says HungChee Loh, president of SCA Packaging Asia. Loh, who is Singaporean, should know since he has lived and worked in China for the last 15 years. Beijing has labeled the 2008 Games the “Green Olympics.” To live up to that slogan, authorities have spent much time and money to plan for cleaner air, to maintain good hygiene to prevent epidemic outbreaks and change the way people behave in public. Beijing’s well-known problems with air pollution could be an embarrassment for the hosts, and could also affect the results of the athletes. It is therefore the ambition to bring Beijing’s air pollution into line with global standards. The city has relocated, or plans to relocate, more than 100 chemical, steel and pharmaceutical factories outside the city and will replace 300,000 taxis and buses with less-polluting vehicles. It is also trying to replace coal furnaces with natural-gas ones. Part of the ambition to fi nish all construction well before the Olympics is not only to show the world that China can keep deadlines, but also to ensure a healthy environment for the games, giving dust from the building projects a chance to settle. [[21**2006 2007 ] SHAPE SCA *7

SHAPE COVER

PHOTO: GETTY IMAGES

The Olympic Games are of enormous political importance to China. Experts have been calling it China’s coming-out party.

37 new venues are built in Beijing before the Olympics 2008. Above, the National Stadium resembling a bird’s nest, and the National Aquatics Center, called a “water cube.”

Beijing is also making preparations to tackle possible public health incidents during the games, particularly in regard to epidemic outbreaks. “Public health safety is a crucial precondition and guarantee of a successful international sports event such as the Olympics,” says Wang Yu, director of the Chinese Center for Disease Control and Prevention (CDC), recently told Xinhua news agency. China has established a nationwide electronic network for reporting epidemics, operated by more than 200,000 staff from the CDC. The organizing committee of the games has already selected the farms that will provide food for athletes, officials and visitors. Strict tests will be carried out to ensure the highestquality food available. Public health and hygiene campaigns are also being introduced in the run-up to the Olympics. In 2006, Chinese authorities launched a campaign to change the way people behave, introducing an informal code of conduct for citizens. Every visitor to the Middle Kingdom knows that public spitting is a serious problem, together with a patent disregard for the etiquette of waiting in line. Articles with punchy headlines such as “China’s spitting 8*SCA SHAPE [ 1 *2007 ]

image” and “Spit happens” have already been published in Western media. Chinese authorities defi nitely do not want this type of information about the country to be spread during the games. Millions of brochures have been sent out to persuade the Beijing citizenry that spitting is unhygienic. Paper sanitary bags are being distributed on trains and buses for people to spit into, and anyone found spitting on the sidewalk will have to either clean up the mess or pay a fine of 50 yuan (USD6.50). When the games end on August 24, 2008, we will know how lucky China has been. The world will be watching closely – not only admiring all the expected medalists from China, along with the spectacular ceremonies and venues, but also whether China has managed to live up to its “green” intentions. Meanwhile, welcome to the party! ▲

DOUBLE-DIGIT GROWTH China’s economy grew by 10.7 percent in 2006, its fastest growth rate since 1995. China is moving closer to overtaking Germany as the world’s third-largest economy. SOURCE: NATIONAL BUREAU OF STATISTICS

12

10.7 10.0 9

9.1

8.8 8.0

7.8 7.1 6

3

0

8.3

10.1

9.9

SEVEN OLYMPIC CITIES Most of the events during the Olympic Games will take place in Beijing. Six other cities will also be hosts during the games: Hong Kong (equestrian), Qingdao (sailing), Shanghai, Shenyang, Tianjin and Qinhuangdao (all football).

PHOTO: SCANPIX

ELEVEN NEW VENUES Eleven completely new venues will be built for the Olympic Games. After the games, some of them will be used as facilities for future s ports events, while others will be sold to investors.

★ Beijing National Stadium (athletics, football)

★ Beijing National Aquatics Center (swimming, diving, water polo)

★ National Indoor Stadium (gymnastics, handball)

★ Beijing Shooting Range Hall (shooting)

★ Wukesong Indoor Stadium

CHINESE EAT OUT Better standards of living have boosted the numbers of people who dine out regularly, gradually making this activity a trendy habit in China’s big cities.

(basketball)

★ Laoshan Velodrome (cycling) ★ Shunyi Olympic Rowing-Canoeing Park (rowing, canoe/kayak)

★ China Agricultural University Gymnasium (wrestling)

★ Peking University Gymnasium University Gymnasium (judo, taekwondo)

★ Beijing University of Technology Gymnasium (badminton and gymnastics)

there are frequently no seats available at dinner time. That’s really crazy.” Yet such a phenomenon is not rare. It is not uncommon to see diners queuing at the doors of a restaurant for a free table. With improvements in people’s living standards, local residents are spending more on dining, and the catering industry is becoming an important engine of total consumption growth, which has been recording annual double-digit growth rates for several years. Food consumption in restaurants and

▲

(table tennis)

★ Beijing Science and Technology

WHEN A NETIZEN recently posted a message on his residential quarter’s BBS (Bulletin Board System) asking for a discount card from a certain restaurant in Shanghai, he soon received several replies. “Almost all the replies said that the restaurant does not issue discount cards because it never worries about business,” said Eric Xiao, a 33-year-old clerk. “I often log on to the BBS to take a look at the diverse information there,” Eric says. “The restaurant mentioned is near my current home and is so hot that

[ 1 *2007 ] SHAPE SCA *9

SHAPE COVER eateries in Shanghai is reportedly three times that of anywhere else in the country. In November 2006, the turnover of the city’s catering industry reached RMB408 million (USD52 million), a rise of 28 percent compared with the same period the previous year. Nowadays, many people, especially the young, are logging onto www.dianping.com, a platform where gourmands can exchange dining experiences. The Web site also collects information about the hottest restaurants in town. “The Web site is really convenient. I log on every day and update my page,” says Lin Yuanyuan, a 26-year-old woman who eats out more than three times a week. “Every day, I stay on the site for one or two hours looking at other people’s recommendations or criticisms of res-

LIN RECALLS THAT her dining-out habit started in 2005 when she met her boyfriend. “Now we eat out almost every Friday and Saturday, and I also collect information about different restaurants from magazines and TV,” she says. When the catering industry sees swift development, diners also have the opportunity to try different styles of food. Lin is fond of Japanese and Cantonese food, and she also favors spicy regional cuisines such as Sichuan and Hunan, as well as the local Shanghai food. According to Lin, her monthly expenditure on dining with her friends is about RMB1,500 (USD193), which is about RITA YAO one-third of her income.

People in Shanghai love to eat out.

THE GUARDIANS OF HYGIENE

S? ND A H AN E L C

q

q

China’s tissue market is the second biggest in the world, and the growth rates are astonishing compared to Western markets, around 10 percent.

PHOTO: GAO ERQIANG

®

Tibor Kovacs, SCA Hygiene Asia in Shanghai. 10*SCA SHAPE [ 1 *2007 ]

taurants. Of course, I also write down my own dining experiences, something that has become a hobby.”

s

CA’s successful Away-FromHome (AFH) tissue brand, Tork, is now being launched in China. “Tork is a global brand and is strong on all continents except for Asia,” says Tibor Kovacs, sales and marketing director AFH at SCA Hygiene Asia in Shanghai. “A broad global leading position for Tork cannot be achieved if China is missing.” With the rapid development of China’s economy, people have got more disposable income and travel much more. This creates a vast demand for hygienic solutions in, for example, restaurants and hotels. “So far, there are no other interna-

tional competitors here with a significant market share. We compete with local companies and they use different dispensing systems, paper qualities, sizes and ways of folding, and so on,” Kovacs says. A BIG CHALLENGE IS also to change

people’s hygienic habits, to make them understand that hand hygiene is more important than they think. “With a small investment in a quality hand-hygiene system, employers can prevent diseases from spreading among the staff and guests. This awareness is lower in China than, for example, in Europe. We see ourselves as the guardians of hygiene,” Kovacs says.

tory and distribution facilities for sales in the Chinese market, commencing with the expansive Shanghai region. THE PRODUCT RANGE includes toi-

let tissue, hand-wipe products, tissue napkins, wipers for cleaning in offices and industrial premises, and liquid so-

aps – all integrated into Tork’s hygienic dispensing systems. SCA is getting off to a flying start as a result of China’s focus on improved hygiene as part of preparations in the service sector ahead of the 2008 Summer Olympics in Beijing and the 2010 World Expo in Shanghai. ▲

PHOTO: SCANPIX

PHOTO: GETTY IMAGES

SCA Hygiene Asia is in the process of identifying which distributors to work with, which is a key success factor, according to Kovacs: “We have a good understanding of the market, but it is our partners who know the local culture and mentality.” As a start, SCA is establishing inven-

Among the five Olympic symbols are the four most popular animals in China: the fish, the panda, the antelope and the swallow. The fifth symbol is the Olympic fire.

CHINA GOES GLOBAL In 2020, 50 of the world’s 500 largest companies will be Chinese, if the government gets what it wants – and it normally does. ONLY SOME 25 YEARS AGO, 11 local

denly became the world’s third-largest PC manufacturer, after Dell and HewlettPackard, and a true global brand. Lenovo’s brand will further strengthen during the 2008 Beijing Olympic Games, where Lenovo is an official top sponsor. In 2004, TCL Corporation, a Chinese manufacturer of television sets, mobile phones and other electronic products, acquired the TV business of France’s Thomson, which included the RCA brand name. The deal turned TCL overnight into the world’s largest

▲

computer scientists in Beijing had a vision of bringing technology to the masses. They founded a computing company called Legend and started out working from a one-story bungalow in the capital. Today, their dream has come true, probably to a greater extent than they ever dreamed. When the company, now known as Lenovo, acquired IBM’s struggling personal computer division in 2005, a business that was three times Lenovo’s size, it sud-

TV manufacturer by volume. This was followed by TCL’s acquisition of the mobile phone business of Alcatel, also a French company. Both Lenovo and TCL were domestic market leaders when they made their international acquisitions. Home appliance manufacturer Haier, on the other hand, also a market leader in China, has made its global journey so far mainly through organic growth. In 1984, the Haier Group arose from the ruins of a run-down state-owned factory in Qingdao on China’s east coast. At that time, it produced just one model of refrigerator. Today, Haier is producing 96 different model categories that are sold in more than 100 countries around the world. The company has 50,000 employees worldwide and a global turnover of more [ 1 *2007 ] SHAPE SCA *11

than USD13 billion. Haier is also an official sponsor of the Olympics in Beijing. Telecommunications giant Huawei has also expanded abroad through organic growth, having won strategically important contracts from established operators such as Vodafone and BT. MEANWHILE, CHINA’S automotive industry is on its way to conquering the world. Shanghai Automotive Industry Corporation (SAIC), which has joint ventures with Volkswagen and General Motors, has set a goal to be among the six largest automakers in 2020. SAIC recently launched its first car brand, called the Roewe 750, built on a design it bought from Rover when the Britishbased manufacturer went bankrupt in 2005. There are similarities between China today and the Japan of the 1970s and

The Chinese Roewe will conquer the world with a Rovers bankrupt design.

12*SCA SHAPE [ 1 *2007 ]

South Korea of the late 1980s. But while it took Japan’s and South Korea’s exporting companies 15 to 30 years to become established players on the world market, the pace of globalization is allowing China to expand beyond its borders at a historically unprecedented rate. This is also why many Chinese companies see the acquisition of foreign “slumbering” brands as their primary means to grow internationally. CHINESE COMPANIES have the full

support of the government in this strategy to conquer the world with their own brands. According to government plans, 10 percent of the companies on the Fortune Global 500 list will be Chinese by 2020. In order to achieve that goal, the government has developed a “go global” initiative, setting aside USD15 billion for the acquisition of

leading companies and brands overseas. This ambition has been welcomed by local business leaders, who fear that relying solely on the dominance of the domestic market may prove too fragile a base for their companies’ futures. Even if Chinese companies work fast and are goal-oriented and eager to learn, there could be many obstacles on the road to becoming global brands. For example, they lack experience when it comes to thinking in terms of strategy, branding and marketing. Still, China’s global “wannabes” are in a better position than Japan’s and South Korea’s companies were when they entered the export markets, mostly because these countries had not opened up and welcomed foreign investments in their own countries on the scale that China has done. ▲

PHOTO: GAO ERQIANG

SHAPE COVER

The president of SCA Packaging Asia HungChee Loh predicts fast growth in 2007.

PHOTO: SCANPIX

We want to be regarded as a one-stop shop where our customers can get any type of packaging they want.

HUGE CHALLENGE FOR SCA PACKAGING ■ With 14 factories in China and 6 in Southeast Asia, SCA Packaging Asia is one of the most fastest-growing units in the whole SCA Group. It employs some 4,800 people, and last year’s turnover was close to USD200 million. “This year we have set a target of growing at least 30 percent,” says HungChee Loh, president of SCA Packaging Asia. Loh has a huge challenge ahead of him: “The company’s objective is to multiply the turnover in 2010. We will aim to grow both organically and through acquisitions.” SCA’s packaging business in Asia started in 1999 when SCA bought a minority of the shares of Central Package Group. SCA has gradually increased its ownership, and since 2006

it owns 100 percent of the company. The growth of SCA Packaging Asia’s business has been built on this base. For example, SCA has built a completely new factory in Suzhou, where five former entities have been brought together onto one site. SCA is also expanding its current factory in Nanjing. An Asia design center is also in the process of being set up in Shanghai, next to the headquarters in Minhang. The center will be used to support internal and external customers, with the aim of creating innovative designs for clients. “We want to be regarded as a onestop shop where our customers can get any type of packaging they want, corrugated, protective or other types,” Loh says. “None of our competitors can offer all that under one roof now.” [ 1 *2007 ] SHAPE SCA *13

TREND




eat lobster Seafood consumption is on the rise worldwide following new trends in healthy eating. As supplies grow scarce in the Mediterranean, lobster shipments from Scandinavia to southern Europe reach new heights. HAVSKRÄFTA, jomfruhummer, Dub-

lin Bay prawn, Kaiserhummer, scampi, Nephrops norvegicus – the Norway lobster is known by many names and enjoyed by fans of gourmet cooking around the world. Each year, Læsø Fiskeindustri on the island of Læsø between Denmark and Sweden ships 1,500 metric tons of Norway lobster to Italy from Denmark, and an additional 1,000 metric tons from its Peterhead unit in northeastern Scotland. The Italians have a long tradition of eating the tail of Norway lobster, called scampi, which is caught locally along the coast of Italy. The local supply, however, is far from sufficient to meet demand, which is good news to the fi shing industries around Kattegat between Denmark and Sweden. The Norway lobster thrives in the waters around Læsø, characterized by a great variation of ocean depths and geological structures with stone reefs, chalk pillars and coral reefs. Managing Director Søren Larsen at Læsø Fiskeindustri says there are other reasons why Italy is such a big market for a type of food that is seen as a luxury 14*SCA SHAPE [ 1 *2007 ]

item in more northern latitudes. “Their meals usually consist of up to five different dishes. After having consumed antipasti, salad and pasta, Italians don’t require very big portions of the main course of fish or meat, which makes a serving of two or three grilled scampi quite sufficient.” COMPETITION FROM low-cost coun-

tries in Asia and Latin America is increasing, but Larsen says the Norway lobster caught in Scandinavian waters is generally perceived as superior in taste, since it matures more slowly in the cold waters of the North Atlantic. Another threat to the Scandinavian industry, Larsen says, comes from tightened EU regulations aimed at protecting local cod populations, which have an adverse effect on Norway lobster fi shing since they only allow vessels to work for limited periods of time in certain sections of the Atlantic. But the future still looks bright for the local fi shing industry. “We can certainly sell everything we catch,” Larsen says. JONAS REHNBERG

■ A recent study from Gothenburg University in Sweden predicts that demand for seafood will grow substantially over the next decades, and the International Food Policy Research Institute (IFPRI) estimated in 2003 that the global appetite for fish had more than doubled in 30 years. “This enormous growth signals changes in who is consuming fish and where,” the IFPRI said. “Rapid population growth in the developing world, along with increases in the average amount of fish consumed per person in those countries, led to soaring increases in global fish consumption.” In the developed countries, demand for fish is growing for a variety of reasons, such as the popularity of Thai and other exotic cuisines and the fact that it is perceived as part of a healthy lifestyle. Seafood contains fatty acids like omega-3, which have a positive effect on the level of so-called good cholesterol. The US Food and Drug Administration has said consumption of omega-3 reduces the risk of coronary heart disease, while the American Heart Association recommends that “healthy people should eat omega-3 fatty acids from fish to protect their hearts.” In the end, most people probably like seafood simply because it tastes good and adds class to any meal.The Swedish Fish Wholesalers’ Association confirms that consumer demand for filleted fish and shellfish is rising faster than for seafood in general.

PHOTO: ISTOCKPHOTO

...and live longer

SEAFOOD FOR THE HEART

PACKAGING HELPS PRESERVE QUALITY ■ Temperature-controlled goods like fresh and frozen food place tough requirements on the kind of packaging used. It has to be waterproof and able to maintain the right temperature. SCA Packaging produces packaging that is tailor-made for the transportation and preservation of perishable goods. Solid board and polyethylene are ideal materials for wet and cold environments and are well suited for containing greasy products. The boxes are made from three to five layers of different kinds of paper, fitted together with water-resistant glue. In the special packaging solution developed by SCA Packing for Læsø Fiskeindustri, the freshly caught lobster is submerged in a box that is half filled with water before being frozen. This technique creates a glazing that protects the product from being dehydrated and preserves the quality better than alternative solutions. The lobsters are then shipped via truck to Italy and other markets, where they are sold to restaurants and wholesalers. The North Atlantic shrimp industry is another big outlet for SCA Packaging. A single vessel may use up to 800,000 units of packaging every year.

AN INSIDER’S GUIDE TO NORWAY LOBSTER Søren Larsen, managing director of Læsø Fiskeindustri in Denmark, enjoys his Norway lobster in one of the following three ways: ★ Cut a ridge along the back, add garlic butter and bake it in the oven. ★ Boil it. ★ Don’t boil it but eat it fresh, with salt, pepper and a bit of lemon juice and olive oil.

[ 1 *2007 ] SHAPE SCA *15

TREND

Climate issues, the lack of power production and the role played by the EU are some of the reasons for increased interest in wind power in Europe.

GREAT WINDS FOR EUROPEAN WIND POWER In 2006, the EU’s wind power capacity rose by 19 percent. Still, wind accounts for just over 3 percent of total power output.

PHOTO: GETTY IMAGES

IN 2006, WIND POWER capacity in

the EU increased by 7,588 megawatts, worth around EUR 9 billion, according to the European Wind Energy Authority, or EWEA. This was 23 percent more than was added in 2005, and cumulative capacity increased by 19 percent. European wind energy is now experiencing a “second wave,” according to EWEA CEO Christian Kjaer. Wind energy in the EU has increased sixfold in just four years. “The importance given to climate issues, the lack of power production and the role played by the EU are some of the reasons for the greatly increased interest in wind power in Europe,” says Matthias Rapp, head of the Swedish wind power association VIP. Scientific developments are also important. Technology is continually improving, making wind power more efficient. Wind now produces 10 times more power than a decade ago. 16*SCA SHAPE [ 1 *2007 ]

However, fossil fuels – oil, natural gas and coal – still account for 80 percent of the EU’s power consumption. Although wind power is responsible for most of the renewable energy currently produced in the EU, it represents just over 3 percent of total power production. The goal of the EU Commission is for wind power to produce 20 percent of the EU’s energy by 2020. EU countries differ greatly in their use of wind power. Leading the field, Denmark has the largest output of wind power per capita in the world. About one-fifth of its electricity comes from wind. Germany has also made great progress. Last year it installed a total of 2,233 megawatts of wind power, 23 percent more than was added in 2005. Germany now accounts for more than 20,000 megawatts of the EU’s total capacity of 48,000 megawatts. Common to both Denmark and Germany are their excellent financial support systems, which in Germany guarantee wind power owners

a fixed price for electricity produced during the first 15 years. But there have been other strong reasons to introduce renewable energy sources in these countries. Coal-based power stations are the alternative, and the price of electricity is high. In Spain, the next largest market in the EU, 1,587 megawatts were installed last year. Major increases in wind power have also been seen in France and Portugal in recent years. In a country like Sweden, often well advanced when it comes to using new technologies, wind power is still a marginal source. Total capacity at the end of 2006 was 572 megawatts, a quarter of the capacity installed in Germany during 2006 alone. Wind power provides just 0.7 percent of the total power consumed in Sweden. “In Sweden, wind power is still at an embryonic stage compared with other countries in Europe,” Rapp says. MALIN HALLARE

▲

SCA INVESTS IN WIND POWER

■ Over the next five years, VindIn AB, a subsidiary to BasEl that was formed by several high-volume users in Sweden, will expand its wind power output by 1 terawatt hour, equivalent to Sweden’s current wind power production. By investing in several different projects, the owners of the companies that make up BasEl and address the interests of these companies, want to increase the availability of

electrical power in Sweden. This will create a better balance between supply and demand, and thereby reduce power costs. “Considering that the owners themselves use 32 terawatt hours per year, 1 terawatt hour is not very much, but it is still a valuable contribution,” says Björn Lyngfelt, communication manager at SCA Forest Products. “This is an opportunity for us to do more than just talk politics.”

Long live

THE CONSUMERS

Households everywhere are breaking new ground. New technologies, changes in gender patterns, other social changes — these are issues creating new challenges for marketers and product developers. How are they going to understand today’s consumer? WE NEED A MORE finely tuned ap-

proach to build up our knowledge about consumers – in short, more quality and less quantity, says Lena Danielsson, managing director at the Swedish office of the international market research agency Synovate. “Today, qualitative research is the only way to really understand consumers,” she says. New research methods that have gained ground in recent years include such things as home visits and accompanied shopping, or actually being with the customer while purchases are made. One obvious advantage of these ethnographic methods is that they reveal unconscious habits that are not otherwise discernible, such as when studying target groups. In recent years, modern technology has opened up a host of new avenues. The Internet has made it possible to organize online focus groups. This means you can reach people spread over large geo-

graphical areas to discuss topics among themselves, similar to a chat line. “But they won’t replace traditional focus groups, as they won’t give you indepth information,” Danielsson says. Online focus groups are already on their way out, she says, and are being replaced by blog-like forums where consumers can take part in discussions on given topics. “Here you can actually dialog with the customers, and this is very important,” she says. Another method, now available thanks to easily accessible technology, is to give customers digital movie cameras and ask them to document their daily lives and habits. “It’s a valuable method because it gives them an opportunity for reflection and afterthought,” Danielsson says. These new methods have not been developed just because it has been technically possible. The most important underlying factors have been changes in con-

At present, VindIn is investigating about 10 different locations for future wind turbine parks. “We have received a very positive response, and as this is the first initiative within the BasEl venture to produce our own power, it has made us feel like real pioneers,” says Anders Lyberg, managing director at VindIn. VindIn, formed in 2006, is owned by AGA, Boliden, SCA and Stora Enso, among others.

sumer patterns, especially the increased choice and availability of products. “It’s more difficult to reach customers today, not least because there are so few product advantages to draw their attention to,” Danielsson says. “Most products on the market are very much the same. Instead, it’s a question of differentiation on an emotional level.” THORD ERIKSSON

NEW METHODS ■ SCA Tissue Europe has recently adopted new research methods to create a better understanding of consumers. Web-based blog forums (see article) focus on simple issues such as: What are your views on toilet paper? Any problems? “We can carry out a very detailed survey with say, over 200 participants, for a fraction of the cost of a focus group with only eight participants,” says Lesley Cordial, brand development director SCA Consumer Tissue Europe. The Internet also offers the possibility of anonymity, openness and discretion, which makes it easier to discuss delicate subjects. However, the new approach that the product developers have been most pleased with recently has been the ethnographic surveys of households. “They have told us that no other method has prompted so many new product ideas,” says Wolfgang Lenzen, marketing research manager, SCA Consumer Tissue Europe. A new ethnographic survey planned for this year will focus on personal hygiene. It will be carried out in three or four countries, with around 20 participants from each. [ 1 *2007 ] SHAPE SCA *17

Our employees may take a rather squarish view of life

Admittedly, we think a lot of boxing things. Since we

With SCA Packaging you will get a partner for the

offer four different material types and competences

entire packaging process. We offer solutions within:

that cover the entire packaging process, there is

•

Strength/logistics optimisation

enough to think of.

•

Knowledge of packaging systems

Things must hang together all the way through the

•

Packaging optimisation

supply chain, easy procurement, practicable use in pro-

•

Supply chain know-how

duction, stacking capability and durability in logistics.

•

Competent consultancy

SCA PACKAGING DENMARK consists of 7 business areas with 20 units and 1,400 competent employees in Denmark. We are a member of Svenska Cellulosa Aktiebolaget, which employs

50,000 people at more than 300 production units in Europe, Asia and America. SCA’s mission is to provide essential products that improve the quality of everyday life.

Read more at www.scapackaging.dk

More than a box ...

PROFILE

Cookson believes there are basic trends that apply across Europe.

THE CHANGING

FACE OF FOOD

BY ANNA MCQUEEN PHOTO ALASTAIR MILLER

ollowing trends around Europe makes for a busy life, so there was no better place for a rendezvous with Andrew Cookson, director of the Genevabased Gira consultancy, than in Paris at the sumptuous Belle Époque restaurant Le Train Bleu in the Gare de Lyon. Gira has been examining market trends in the food retail industry for more than 35 years, and it was one of the first European companies to use modern market research techniques. “We operate Europe-wide for all food and worldwide for dairy, meat and fish, looking at everything from sausages in Moscow to margarine in Spain,” Cookson says.

f

▲

European food retailers will put bigger effort in building their own brands. That’s according to ANDREW COOKSON, director of the consultancy company Gira, a world leader in examining market trends in the food retail industry.

[ 1 *2007 ] SHAPE SCA *19

PROFILE

Cookson believes there are basic trends that apply across Europe, despite the different cultures. “People say that countries are so different that it is impossible to generalize, but I think that’s nonsense,” he says. “What’s more, people say the very few products that are generalized are McDonald’s, Mars Bars and instant Nescafé, and other than that, everything’s different. This may be so, but the basic trends are still the same. Consumers everywhere in developed countries – those who eat as much as they want of whatever they want – are looking for convenience and a clear offer. They don’t want to waste time looking for, negotiating and buying food that is boring and basic, and they want all their food to be convenient.” MANUFACTURERS LIKE Nestlé and Danone are clearly moving toward increasing their profits by expanding their markets and increasing their market share, Cookson says. But one of the biggest current shifts in the retail food sector is with retailers themselves. “They increasingly want to differentiate themselves from their competitors by building brands with their store name,” he explains. In the US, store names already exist as clearly defi ned brands, like Wal-Mart and Costco, but in continental Europe, with a few exceptions, this is not yet the case. “We are moving into a period of creation and defi nition where store names are beginning to mean something to consumers,” Cookson says. “We are now on the verge of retailers creating a real image around their store brand’s name and logo, but this hasn’t really happened so far other than in the UK, Switzerland and Belgium. Retailers have started demanding products from their suppliers that strengthen the image they wish to project. “Over the next 10 to 20 years, retailers will increasingly be looking for products that differentiate them from the competition as well as for basic products that consumers have to fi nd in their stores at the highest quality for the best price,” Cookson says. “It’s already been done by Leclerc in France, Lidl and Aldi in Germa-

20*SCA SHAPE [ 1 *2007 ]

“We are moving into a period of creation and definition where store names are beginning to mean something to consumers. We are now on the verge of retailers creating a real image around their store brands’ name and logo.

ny and Tesco and M&S in the UK,” he adds. Cookson believes this will have a big impact on food suppliers and the whole question of how food is put into the store. “Retailers now have to have a story to tell, and it’s no longer just one of price,” he says. Retailers are also now exporting their savoir-faire. The German hard discount model, the French hypermarket model and the UK added-value supermarket model are fighting for space in countries where previously there was no such model, such as central Europe, the Far East and South America. “But because of the saturation in their home markets and in addition to geographical expansion, they are also trying to better exploit their existing client base by selling new products,” Cookson says. For example, German hard discounters, who traditionally stocked limited product lines, are now selling fresh meat. “And our research is showing that by 2015, 35 percent of all fresh meat sold in Germany will be sold by hard discounters,” he says. But, Cookson says, eating habits in Europe are undergoing significant change because of price. People are now more willing to knowingly buy lower-quality products to have enough money left over to pay for telephones and sneakers for their kids. “We are heading toward consuming lower-quality food with more carbohydrates and sugars, and this is a factor in the increasing levels of obesity we are seeing today,” he says. “This is a fundamental society problem.” REDUCING ECOLOGICAL COSTS and pro-

Europeans are knowingly buying lower-quality products to have enough money left to buy telephones and sneakers for their kids, Cookson says.

moting sustainability is also becoming a real issue for retailers, who are increasingly obliged to behave in an environmentally responsible manner. “With such wide product ranges, sustainability is tough to apply to a retailer, but this is just the beginning,” Cookson says. “We’re going to see increasing pressure on retailers to change and this will put up the cost of food, which will eventually be absorbed by consumers.” Cookson believes the key area to watch right now is the development of biofuels and their

■ SCA is Europe’s biggest supplier of tissue paper for household brands, with strong positions in the largest European markets. SCA invests more resources than ever on product development that aims to strengthen SCA’s own brands and improve profitability. Within personal hygiene products the retailers’ own brands represent a small portion of the total sales. In many markets, SCA increasingly complements its own brands by manufacturing products for retail brands.

FOTO: GETTY IMAGES

▲

EUROPEAN BRAND CATEGORIES

The division of the European market between producers’ brands and retailers’ own brands looks like this:

TISSUE PAPER FOR CONSUMERS 56%

44%

RETAILERS’ BRANDS

PRODUCERS’ BRANDS More products will be sold under retailers’ own brands in the future.

FEMININE HYGIENE PRODUCTS

INCONTINENCE PRODUCTS

75%

85%

98%

15%

2%

80

60

40

20

25% 0

Retailers now have to have a story to tell, and it’s no longer just one of price.

▲

DIAPERS

100

PRODUCERS’ BRANDS RETAILERS’ BRANDS

[ 1 *2007 ] SHAPE SCA *21

PROFILE

FOOD TRENDS ACCORDING TO ANDREW COOKSON: ★ Consumers want food to be convenient.

★ Retailers want their logo on products to strengthen their image.

★ Fresh meat is moving in at hard discounters.

★ Consumer choices are tending toward lower-quality food, while sustainability is increasingly important for retailers.

impact on the food industry. Tens of thousands of people took to the streets of Mexico City in January to protest the price of tortillas, which has doubled in some parts of the country in the past year. Many believe the price rise is due to the increasing use of corn for biofuels production. “LARGE QUANTITIES OF GRAINS and oil-

seeds are now being burned rather than eaten,” Cookson says. “This means not just fewer food products all the way through to the meat and dairy chains, but serious price increases for all basic staple foods, which is seriously bad news for poor people, Third World countries and even European and US consumers. The consequences could be earth-shattering. Biofuels production is being driven by a race for subsidies and a need for political correctness, and nobody is looking at the effects it will have on the food chain. This is happening right now, and nobody knows what the impact will be.” ▲ 22*SCA SHAPE [ 1 *2007 ]

NAME: Andrew Cookson LIVES: Just outside Paris with his wife and two children. CAREER: “I’ve lived in France for 30 years now. I did a language degree at Oxford and then spent a year abroad in Eastern Europe. I did my articles and worked as a chartered accountant for a year before I went to the INSEAD business school near Paris. I subsequently held various financial jobs before I started working with Gira in 1990.” HOW HE DEFINES HIMSELF AS A CONSUMER: “The advantage of being a Brit living abroad for so long is that you have no real culinary traditions of your own, so you can judge everyone’s eating habits objectively, however strange they may appear at first sight.”

FOCUS On: IMAGE SAVINGS HYGIENE INNOVATION PRODUCTIVITY PROFITS PERFORMANCE SERVICE PARTNERSHIPS ENVIRONMENT

Add impact to your table—and your bottom line. Every detail of your restaurant is an expression of its personality and uniqueness. Which is why we now offer the Xpressnap® napkin dispensing system in new fun and vibrant colors. The Xpressnap napkin dispensing system not only looks good in any casual dining environment, it also substantially reduces napkin consumption. How? It dispenses one napkin at a time. So now patrons take one napkin—instead of grabbing a handful. In fact, recent research suggests you may reduce napkin usage by as much as 50%. At SCA, we guarantee that Xpressnap will reduce your napkin consumption by at least 25%! Now that’s savings with style.

One napkin. Every time.

scatissue.com Napkins I Towels I Dispensers I Soap I Specialty Wipers I Bath & Facial Tissue

Choose your favorite color to complement your restaurant’s décor!

TECHNOLOGY

gets to the root

t

The most brilliant solutions are often the simplest. Like using copper paint to direct roots and get forests to grow faster and straighter. TEXT GÖRAN LIND ILLUSTRATION LEIF ÅBJÖRNSSON

rees need a well-developed root system in order to grow fast and straight. Deformed root systems are a problem that affects forest owners the world over. One reason over the last few decades has been root circling in forest plants that are grown in pots. “When the roots reach the sides of a smooth pot, they bend and follow along the side of the pot, then start to circle and intertwine. This produces unstable trees with poorly developed roots that cannot absorb nutrients as efficiently as trees with a well-developed root system can,” says Leif Gulin, a biologist at SCAs plant producer NorrPlant. With nurseries in Bogrundet and Wifstamon outside Sundsvall, Sweden, NorrPlant is the largest supplier of forest plants in Europe. Poor root systems result in forests with lower quality, which means significant economic consequences for forest owners. “We’ve been working on this problem for a long time and have developed pots

24*SCA SHAPE [ 1 *2007 ]

with root-training ridges and air slits that guide the roots in the right direction,” Gulin says. “In the early 1990s we took the final step toward producing plants with as good a root system as trees grown from seed in trays. That’s when we began to look at a method using copper paint that was described by Canadian researchers as early as the 1970s.” THE METHOD INVOLVES coating

the inside of pots with a paint containing copper, in amounts that are carefully adjusted for the plant that is to be grown. “Copper is poisonous in concentrations that are too high and stops root growth at the edge of the pots,” Gulin says. “Copper prevents the outermost cells from dividing and this keeps the root from growing.” He adds that the same thing can be seen on copper roofs, where no vegetation grows. When the seedling is planted out in its prepared site in the forest, the concentration of copper is reduced at the root end and the root begins to grow in the

forestland. As a result, the tree gets a well-formed, symmetrical root system. “We see some improvement in growth,” Gulin says. “The quality also improves because the trees grow straighter, but mainly trees become more stable.” Spruce is the dominant species. Last year, it accounted for more than half of all plants from NorrPlant. Pine accounted for 37 percent and contorta pine 8 percent. So far, NorrPlant has produced more than 300 million plants with copper-painted pots. Starting this year, no plant trays are being sold with unpainted pots. The concept has also been sold to Södra, a cooperative of private forest owners in southern Sweden. The plant trays are recyclable and are used for many years. After planting they are returned to NorrPlant, cleaned of dirt and paint and then repainted. The amount of copper that seeps into the ground as a result of planting is very limited, considerably less than the natural content in the ground. ▲

▲

SCA INSIDE Three winners. Display-product KitKat Sakura (right) protective packaging Hyflux Dragonfly (middle) and Purina Beggin Strip (left).

3 AWARDS TO SCA IN SINGAPORE ■ SCA Packaging Asia won three awards at Singapore Packaging Star Awards 2006. The winning products were Kit-Kat Sakura and Purina Beggin Strip in the Sales and Product Display categories. The third award came for the Hyflux Dragonfly three-inone protective packaging solution in the Transport and Protection product category. “Winning these awards clearly differentiates SCA Packaging as a strong player and leading packaging solutions provider throughout Asia, helping to boost customers’ confidence in our product design capabilities, and in turn our ability to deliver innovative, high-quality packaging solutions,” says HungChee Loh, president of SCA Packaging Asia. The Kit-Kat Sakura also won a prize at the Asia Star Awards 2006, out of more than 100 competing entries submitted from 14 countries throughout Asia. The Asia Star Awards are organized annually by the Asian Packaging Federation. The Singapore Packaging Star Awards event has been hosted by the Packaging Council of Singapore since 1998.

NEW DEVELOPMENTS IN TORK ONLINE NOVEMBER SAW the launch of

Tork Online 2.0. This is the first step in a series of releases that will make the Tork Online web site more accessible and attractive no matter whether the customer is new or well acquainted with SCA and Tork. The updated version of Tork Online includes a section called Experience Tork and describes three of the keywords the Tork brand represents – hygiene, absorbency and softness. The section will be expanded with more areas in the next release. Another new development is the My Product List section, which gives customers and distributors the chance to create their own

26*SCA SHAPE [ 1 *2007 ]

product list and download related product information including pictures and CAD fi les (3-D drawings for architects). “The fact that our online project is right for our customers is confirmed every month by our statistics for visitors,” says Ulrica Westheim, head of new media at SCA Tissue Europe. “Since it started two years ago, the number of hits has increased more than 500 percent.” Release 2.1 will appear in 2007, and expectations are already high. The main target group for Tork Online is distributors who need clear production information quickly and want to learn about

new products. There are 25 versions of Tork Online in 22 countries, all built on the same platform. Tork is SCA’s brand in AFH (Away From Home) products and is found in Europe, North America and Asia. www.sca-tork.com

Truck driver Carl-Erik Lodin is happy with the new technique. The only visible parts of CTItechnique are the tubes on the outside of the wheel.

Eco-friendly transportation with CTI SCA IS CUTTING costs

and looking after the environment by increasing the number of trucks equipped with CTI technology in its forests. The decision was made following a successful test project, for which the Swedish Road Administration has now given approval and provided in-

structions. CTI stands for “central tire inflation” and involves the adjustment of air pressure in tires. It makes the weight of the vehicle spread evenly and allows vehicles to carry heavier loads than normally permitted on certain roads and during critical periods, such as when the ground is thawing or when

there has been continuous rainfall. This, in turn, means lower transportation costs for SCA and lower emissions. “We’ve experienced very positive results from the test project, and reliability has exceeded my expectations,” says Ingemar Ljunggren, head of transportation at SCA Skog.

Today there are four trucks operating in SCA’s forests with CTI technology, and the goal is to increase the number of vehicles to 20 as quickly as possible. The test, started three years ago, was carried out together with the Swedish Road Administration, truck operators, vehicle manufacturers and other forest companies. Overall, the forestry industry in Sweden sees opportunities to reduce its costs by SEK 100 million annually.

■ SCA’s strong environmental policies clinched the deal with Britain’s new Wembley Stadium. The stadium’s 2,618 restrooms, estimated to number more than in any other building in the world, will all feature Tork products. “SCA had the products we wanted, but key to our decision was how the company’s environmental responsibility is reflected in its policies,” says John Andersen, Wembley Stadium’s cleaning services manager. “We were impressed by the fact that SCA puts money back into reforestation and avoids using chlorine bleach in its products while also trying to minimize energy consumption. These factors scored very highly with us, and therefore we were keen to sign up SCA Tissue Europe ahead of any other tissue suppliers.” The stadium, which will open this year, will have 90,000 seats and will accommodate more than 1.5 million sports and music fans each year. Tork manufacturer SCA Tissue Europe is the European market leader in tissue.

FOTO: NEIL PROCTOR

TORK WINS THE WEMBLEY STADIUM CONTRACT

Tom Dudfield, SCA , John Andersen, Wembley Stadium and Rob Broadbent, SCA.

[ 1 *2007 ] SHAPE SCA *27

Packaging operations in North America sold SCA HAS SOLD its North Nana Plus+ is SCA’s new multipurpose feminine hygiene product.

NEW PRODUCT IN FRANCE ■ France is the first country to launch a new multipurpose feminine hygiene product called Nana Plus+. With this new product, SCA Personal Care will reach a market in France that has not yet been actively targeted. The target group is women between 35 and 60 years who use feminine products rather than purposemade incontinence products to address their incontinence condition. Nana Plus+ is positioned as premium product, which is indicated by its look and price. The next market in line to launch the product is Italy, where it is called Nuvenia Plus+.

American packaging operations to Metalmark Capital for USD 400 million. The North American operations have annual sales of about USD 430 million. The transaction is expected to be completed during the fi rst quarter of 2007 and the purchase price will be paid in cash. “Our ambition is to concentrate SCA’s packaging operations in the European market, where Eastern Europe and Russia are the fastest-growing regions,” says Jan Åström, SCA’s president and CEO. “Along with that, we want to continue our growth in China, where trends are favorable. The sale of our

North American packaging operations allows us to speed up our pace in these regions.” The operations account for about 10 percent of SCA’s total sales within its business area Packaging. Annual earnings per share will be reduced in the short term by SEK 0.2, while net debt will be reduced by about SEK 2.8 billion. The sale is in line with the strategy SCA presented at Capital Market Day last September. SCA sees good opportunities for growth and improved earnings within its four business areas. Selective divestments and acquisitions will contribute to this development.

WWW.SCA.COM HAS A NEW LOOK ■ SCA’s external Web site has a new look and feel as of January this year. The main changes are the layout, a simplified and more user-friendly structure, more frequent news updates and the fact that the whole site can now also be viewed in Swedish. “SCA’s Web site receives around 200,000 visitors a

28*SCA SHAPE [ 1 *2007 ]

month and is one of our most important communication channels,” says Anna Selberg, vice president corporate communications in Stockholm. “Our focus during the coming year will be to further develop the content and structure to even better communicate the whole business of SCA.”

▲

SCA INSIDE

In May, SCA will launch a limited edition in the Nordic countries of its first designer diaper under the Spring Collection.

Libero sailing along ■ Things are going well for Libero, SCA’s diaper brand in the Nordic countries. All of Libero’s diaper products have increased their market share as competitors lose ground. The pant diaper Libero Up&Go had the largest increase in sales in 2006, rising 9 percent in both volume and sales in the Nordic countries. Several factors account for these favorable numbers.

“First of all, it’s the high quality of our diapers, with their excellent fit and absorbability, which consumers appreciate and choose over other diaper products,” says Fredrik Krook, category marketing manager at SCA Personal Care. “Our efforts to market Up&Go as our flagship product have also been successful.” Another important factor is

SCA’s successful marketing campaigns. These include the awardwinning commercial “Marathon.” The film premiered in 2005 in conjunction with the launch of the new generation of the Up&Go diaper and is still being shown. Also playing an important role is the fact that hospitals and maternity wards choose Libero diapers for newborns.

[ 1 *2007 ] SHAPE SCA *29

CAMERA

BUILDING IN

WOOD WOODEN HOUSES ARE IN, and many of them look like nothing that came before. New trends, innovative architects and pioneering technology are all behind this inventiveness. Major efforts have been made in recent years to allow the construction of wood frame buildings of up to four or five stories. In the US, 90 percent of all new buildings of this height with light frame construction are wood frame. “A couple of years ago, the EU decided that wooden buildings could be built up to five stories high instead of four,” notes Mark Isitt, editor-in-chief of the architectural journal Forum AID. In many projects more than two stories high, wood has turned out to be cheaper to build with than other framing materials. Technology also allows companies that manufacture prefabricated houses to start working on multi-story building projects. Wood is also used increasingly as facing. Steel and glass are combined in a daring way with wood, which given its natural properties withstands the impact of wind and weather. Wood has its own character. It ages beautifully, and unlike any other building material it is living. “For decades, we’ve seen an inferno of steel and glass,” Isitt says. “Now wood is becoming increasingly popular among leading architects as a reaction to dead glass. Combining dead glass and living wood is refreshing.” ▲

30*SCA SHAPE [ 12**2007 2006]]

PHOTO: GEIR BRENDELAND

TEXT PER ÖQVIST

Face Bar in Bangkok, with an interior and exterior of equal beauty, mixes traditional Thai architecture with minimalism, antique furniture and antique Buddha figures. The building is a bar, a temple, a bakery, a restaurant and a spa – an oasis where trend-conscious pilgrims can escape the rush of Bangkok.

▲

PHOTO: GETTY IMAGES

PHOTO: FACE BAR

The tallest residential building made of wood is Strandveien 37 in Trondheim, Norway, by Brendeland & Kristoffersen Architects. Constructing the entire building with prefabricated wooden components has a number of positive effects. Wood has been found to bond exhaust fumes and other pollutants, which means that wooden buildings have a positive effect on urban environments. Every wooden component is also impregnated to make it non-flammable.

The Church Village of Gammelstad, Luleå, in Sweden is on UNESCO’s list of World Heritage sites. It is northern Europe’s largest and best-preserved “church village,” with 424 wooden houses, arranged in a medieval city pattern around a magnificent stone church with a separate bell tower. Most of the houses have two rooms. [[21**2006 2007 ] SHAPE SCA *31

PHOTO: SCANPIX

Santiago Calatrava is the architect behind the Turning Torso in Malmö, Sweden. Another spectacular building, which has won numerous awards, is his Ysios Winery in Laguardia, Spain, built from 1998 to 2001. Two undulating cement walls, almost 200 meters long, run parallel, 26 meters apart. The southern wall is fully clad in cedar.

32*SCA SHAPE [ 12**2007 2006]]

PHOTO: FELIX NUSSBAUM MUSEUM

PHOTO: PATRIK GUNNAR HELIN

CAMERA

Gert Wingårdh is the architect behind the noted House of Sweden, where the Swedish Embassy in Washington is located. All interior floors, walls and ceiling are made of wood. The exterior of the building, however, plays an ingenious visual trick on the eye. “He plays with the image that foreigners have of how we build in the Nordic countries,” Isitt says. “Behind glass panels are computer-generated imitations of wood veneer.”

PHOTO: GETTY IMAGES

The wooden churches of Kizhi in Karelia, Russia, were built in the 18th century and illustrate a visionary architecture far ahead of its time. UNESCO has named Kizhi a World Heritage site. It lies in the northern part of Lake Onega in the Republic of Karelia. Two magnificent 18th century churches and an octagonal bell tower from 1862, also made of wood, are key buildings in this openair museum for northern Russian wooden architecture.

Daniel Liebeskind is a spectacular architect who won the competition to design Freedom Tower, the replacement for the World Trade Center’s Twin Towers in New York. “He’s hardnosed and known for his architecture in metal,” says Mark Isitt. “Using the same style in wood, the expression is completely different – warm and embracing.” Liebeskind has done excellent work in wood, such as the Jewish Museum in Copenhagen. With the Felix Nussbaum Museum in Osnabrück, Germany, he blends wood, steel and glass in a spectacular way.

[[21**2006 2007 ] SHAPE SCA *33

SHAPING A VIEW

Andrew Winston The founder of Winston Eco-Strategies, helps leading companies use environmental thinking to drive growth. His current book, the bestseller Green to Gold, highlights what works – and what doesn’t – when companies go “green.”

“ONE LESSON FOR BUSINESS: THINK ABOUT A LEADING GREEN PRODUCT AS A GATEWAY — THE EQUIVALENT OF A LOSS LEADER.”

FROM LOSS LEADERS TO GREEN LEADERS

m

y wife and I were lucky enough to welcome Jacob Winston into the world six months ago. His birth made me think about many things, from the circle of life to “Wow, college will be expensive in 18 years.” But from a green business perspective — and is there any other? — I was thinking about the arrival of a new consumer, one I hope to raise as a green one. And about how successful the organic baby food market has been. I hear from many people that baby food was their introduction to organics in general. Organic milk followed fast, and then on to a range of other foods. Once you decide it’s healthier for your baby, you begin to wonder why you shouldn’t be eating organic yourself. ONE LESSON FOR BUSINESS: Think about a leading

green product as a gateway — the equivalent of a “loss leader.” Figure out the way into a customer’s life with a greener option, then open them up to the idea of many others. Organic foods have grown so fast in part because they offer the promise of personal benefits — health and protection from pesticides in particular. They demonstrate perfectly the point about using green as the “third button” to push with consumers, after price and quality. But once you’ve pushed that button, customers may be more ready to hear the green pitch in general. ▲ 34*SCA SHAPE [ 1 *2007 ]