God morgon, SCA
A leading Swedish hygiene and forest industry company, Svenska Cellulosa Aktiebolaget (SCA) develops and produces sustainable personal care, tissue and forest products. It conducts its sales in around 100 countries under different brands. As Europe’s largest private forest owner, SCA emphasises on sustainable forest management. The SCA group currently has about 44,000 employees, and its sales in 2013 amounted to SEK 93bn (€10.7bn).
The Paper Mart team (PM) recently had a face-to-face interview with Mrs. Cecilia Edebo, Managing Director, SCA Hygiene Products India Private Limited, about the company’s growing presence in India.
Here are some excerpts from this information-loaded interaction.
In 2013, SCA introduced products for hand and nose hygiene under the Tempo brand and baby care products under the Libero brand in India. The company is also investing in its own production plant in India. The group is introducing itself through an educational campaign, the use of traditional Indian medicine and the presence of a Bollywood movie star.
In 2013, SCA launched a broad campaign to introduce Tempo tissue on the Indian market featuring Bollywood star Karisma Kapoor. In connection with the launch, Karisma explained why India is a perfect market for hand hygiene products: “We Indians love to eat with our hands, which is a good reason for us all to use tissues, wet wipes and hand sanitizer,” she said. “As a well-reputed global brand, Tempo (consumer tissue) is perfect for all Indians who want to enjoy every morsel of food using their hands.” With the India’s middle class growing rapidly each year, personal care products are undoubtedly becoming affordable for an increasing number of people.
SCA has also launched Libero baby diaper range and Tork tissue in India and will shortly introduce TENA incontinence products. Baby diapers are only used by an estimated 4 per cent of the market in India, and some 30 million babies are born every year. This means that SCA can exploit a huge growth potential in India.
According to a report by the market intelligence company Transparency Market Research, India is the world’s fastest-growing diaper market. By 2017, consumption is forecast to rise by 11.6 per cent a year to 8 billion diapers. The challenges mainly concern customs, culture and knowledge.
SCA has launched its biggest-ever information and educational initiative in cooperation with maternity clinics, hospitals and prenatal caregivers. In just five months, 780,000 new mothers have received information on breastfeeding and the importance of high hygiene standards.
To link its new products to Indian culture, SCA developed children’s skincare products based on Ayurveda, a system of traditional Indian medicine that has attracted considerable interest in the West.
Another important project with roots in Indian culture is an information campaign about the importance of hand hygiene at mealtimes. This campaign is linked to Mumbai’s institution of dhabawalla. This institution is a distribution system in Mumbai that supplies workers – mostly in offices – with lunch boxes from home or from meal suppliers. Every day, thousands of delivery people manage to get the right lunch to the right person. Seeing an opportunity to increase awareness of hand hygiene, SCA added its products to the lunch boxes: Each lunch box must come with a Tempo hand sanitiser and a pocket pack of Tempo hankies.
In addition, SCA jointly ran a similar campaign about the importance of hygiene at mealtimes with McDonald’s, the INOX movie theater chain and the coffee shop chain, Café Coffee Day, in Mumbai, Pune and Goa, offering free hand sanitisers and pocket hankies together with the food. Amazingly, SCA’S message about the importance of hygiene at mealtimes reached 4 million Indians within just three months.
SCA is all set to invest €17 million in a plant to make hygiene products in southwestern India. Production is scheduled to start next year.
PM: What are your views on the Indian tissue industry?
Cecilia Edebo (CE): The market for tissue in India is almost non-existent. The use of tissue per person in India is around 15 grams, whereas use of tissue per person in America is 23 kg and in Western Europe 13 kg. Besides, whatever little you see on today’s market is of poor quality and it fails to satisfy the consumer’s needs. You have dirty hands or a sweaty face, but you don’t feel like using the tissue paper available on the market, because it’s of poor quality: it breaks quickly. The poor quality of the products on the market are, to a great extent, responsible for holding back consumption.
I am glad to be in India as I think both the Indian tissue and paper industry and SCA can be in a win-win situation. If we challenge Indian manufacturers, they will have to improve the quality of their products, which over time will result in high-quality products for the consumer.
I am delighted to tell you that we are one of the leading suppliers of high-quality tissue paper in the world. People will buy products only if they are good; nobody wants to buy substandard products. SCA can do a lot to boost the demand for tissue in India.
PM: What are your comments on the underlying trends in the Indian tissue sector?
CE: In India, you don’t use tissue so much in the washroom. You use it mainly to clean your hands – and that’s where the use is picking up. The demand for tissue is rising only in certain hygiene-conscious segments, such as specific cities, cultures and communities; it’s not the general trend. At offices, people are exposed to hand towels in washrooms; they take the habit home and look for tissue towels in other circumstances as well. Big industries – especially those that are coming up – are also pushing up the demand for tissue. So, the cloth is slowly moving away.
PM: What kind of growth do you foresee in the Indian tissue sector in the next decade?
CE: Per capita consumption is rather difficult to predict as far as India is concerned, because India has 1.3 billion people. However, demand for tissue will grow immensely in places where people are educated and hygiene-conscious. In places like Goa, tissue penetration is deep because of different religions; altogether people in Goa consume tissue in a different way. The demand is gradually growing from single digits to double digits, and in the coming five years, it should be triple digits. But demand only grows if the product is of good quality. If the tissue industry in India wants to grow, it needs to deliver quality products to its customers. And we at SCA really hope we can pave the way with our high-quality tissue products
PM: What is SCA doing to strengthen its presence on the emerging Indian tissue market?
CE: India provides SCA with a huge growth potential. India’s population is growing and aging. Combined with a higher standard of living, we predict an increased demand for hygiene products – the more so since the consumption of hygiene products in India is currently still low. We are confident that SCA can really make a difference on the Indian hygiene market.
We have chosen India also because India is a beautiful democracy. It moves probably slower than China, but it gradually moves and education and awareness here are on a very high side. Indian middle-class consumption is going to be a huge driver.
I love India – I came here two years ago. It’s a fantastic country with beautiful people – proud, smiling, happy and friendly. But India faces many challenges in the area of hygiene. SCA knows a lot about hygiene, and it is one of our aims to make this knowledge available to people around the world and ensure access to affordable, sustainable hygiene solutions. For this, we have developed training modules about baby care and elderly care that we offer to hospitals and health care institutions By genuinely caring for our customers and by offering high-quality products, we will be able to win our customers’ trust.
Our task in India is surely not an easy one. We need to educate people on the importance of hygiene. We need to tell them about something that is not there. It’s a long-term involvement.
PM: SCA has decided to invest €17 million in local production of hygiene products in India. What is it doing to strengthen its presence on other emerging markets?
CE: Emerging markets are critical for SCA’s future success. We are continuously looking at strengthening our presence on these markets, primarily by growing organically; also through selected acquisitions.
Here are some recent examples:
We have had a strong presence in Latin America for many years. This was bolstered with the purchase of the remaining 50 per cent of the Chilean hygiene company PISA. The purchase of the hygiene company Everbeauty and the acquisition of the majority stake in tissue manufacturer Vinda have strengthened our presence in China.
Earlier this year, SCA announced that it has partnered with Intercare Limited to set up the Tissue Partners LLC joint venture in Dubai. This is one of many planned steps to build a stronger SCA business in the Middle East.
In 2012, SCA acquired 50 per cent of the Turkish hygiene products company Komili from Yıldız Holding, one of the largest food groups in Turkey, to form the SCA-YILDIZ joint venture.
PM: Share your experiences of setting up a joint venture and working with Godrej Consumer Products Limited.
CE: The joint venture with Godrej Consumer Products was established and dissolved long before I came to India. SCA is now back in India and this time we establish a sales network by partnering with key distributors and building a wholly-owned factory.
PM: What is your sales and marketing strategy for becoming the preferred supplier of personal hygiene products in India?
CE: Whenever you enter a new market and want to create a segment that is not there, you need to place the product in a relevant circumstance. This is how we have tried to promote our Tempo brand. Indians love to eat with their hands, so we have placed our Tempo products in some of the eateries in Mumbai.. Before you start eating, you can now clean your hands with Tempo sanitisers; and after finishing your meal, you can clean your hands again with Tempo tissue paper. You cannot actually do that with the tissues currently available on the market as they break and get stuck in your fingers. Because our products are very good, we know that after using them at these eateries, people will seriously think of using them regularly. They will get into the habit of using our sanitisers and tissue paper.
We are currently running a campaign about the importance of hygiene at mealtimes jointly with McDonald and Café Coffee Day. We have also gone to schools and approached some dhabawallas in connection with this campaign, and we have received a fantastic response. We plan to run similar campaigns in other cities as well. We should be able to reach out to 10 million people by the end of this year.
PM: As Europe’s largest private forest owner, SCA places considerable emphasis on sustainable forest management. What is your idea of sustainable forest management?
CE: SCA is the biggest forest owner in Europe. It has 2.6 million hectares of forest land, which equals almost the size of Belgium. SCA’s forests are a source of renewable raw material, it provides living space for plants and animals and enables us to generate energy through wind power and biofuels. We replace every tree harvested in our own forest with three new ones, which ensures that our forests have an annual net growth of 1%. Our growing forests absorb 2.6 million tons of carbon dioxide annually, which is more than the emissions from all SCA’s use of fossil fuels in the total production. This makes SCA’s operations carbon neutral. We have guidelines on how to manage both old and young trees and on how much space should be given to them. You don’t have enough space for people here in India, but we have enough space for trees in Sweden. We follow the guidelines given to us by European Forest management Committee probably to the extreme, because we also strongly believe that responsible forest management and replanting trees might be one of the solutions to climate change.
PM: Tell us about your hygiene products and your product range.
CE: SCA is a global leader in personal care and has a portfolio of incontinence products, baby diapers and feminine care products. SCA is also one of the leading tissue companies in the world. Our consumer tissue product portfolio comprises toilet paper, kitchen rolls, facial tissues, handkerchiefs and napkins. In the Away-from-Home segment, SCA develops and markets complete hygiene solutions that consist of dispensers, tissue, soap, service and maintenance. Typical customers in that segment are hospitals, restaurants and the manufacturing industry. We are soon going to launch our Tena brand, which is the leading incontinence care brand in the world. We will introduce absorbent and disposable incontinence protection as well as skin care products under the Tena brand. The toiletries range will make a difference on the local market and will dramatically improve the standards of skin care, especially for elder and incontinent people.
PM: What kind of tissue manufacturing facility do you intend to put up in India?
CE: The construction of our factory is progressing very well and first production test will by the end of this year. Eventually, we will manufacture tissue and baby diapers in that factory. Through this new factory, SCA will be able to efficiently supply the Indian market with products that meet European quality standards.
PM: How do you plan to create an awareness of each of your brand?
CE: We have different initiatives for each of our brands and each of our markets. When it comes to Tempo, we really would like the consumer to try and experience our products. Through the eatery proposition we make Tempo tissues and sanitizers relevant for our consumers.
For the Libero brand, we are transferring best practices from other parts of the world to India. Through various initiatives we engage with mothers – and nurses – even before a baby is born. Nurses are the ones who help mothers gain knowledge of baby care. So we are going to hospitals and clinics to offer training programmes for nurses and doctors about baby care.
The hospitals and nurses appreciate our involvement because there is a lack of training programmes in India that focus on the emotional side of baby care – like how to take care of the baby’s skin, what the mother-in-law would think about the product and so on. We believe that having a baby is more about emotions than anything else.
About 780,000 babies in India have so far benefitted from the Libero training programme – and another 30 million babies are born in India every year. So you can very well imagine the potential of this segment, which is very important to SCA, because we want mothers to trust us as a company and a brand. If they trust SCA, they will trust our products too. We have very good products on the Indian market, and I’m proud to say that we deliver the best baby-care products.
PM: What are your future plans for India?
CE: We want to become the benchmark in the business sector we operate. We are currently present in more than 100 countries across the globe and we hold leading positions in all areas we operate in. And, of course, we want to be regarded as the best company on the Indian market for personal care and tissue products.