Environment

SCA, the Swedish paper and packaging group, may sell more businesses in its packaging division, chief executive Jan Johansson warned at Reuters Paper Summit.

In June SCA agreed to sell 19 of its UK corrugated businesses to Spanish firm SAICA and Johansson told Reuters yesterday (20 August) that he would not rule out further disposals, stating that the firm was not prepared to stay in businesses where it did not get at least as good a return as in its better-performing consumer hygiene products operations.

SCA's first-half pre-tax profit to 30 June fell by 15% to SEK3.6bn (£308m), while net sales were up 6% to SEK54.8bn.

Operating profit in SCA's packaging business in the first six months dropped by 19% to SEK1.1bn on net sales up 3% to SEK17.3bn. By comparison, hygiene products saw its operating profit increase 49% on sales of SEK18.4bn.

Huhtamaki and Stora Enso are both suffering continuing pressure from rising raw materials costs.

Huhtamaki warned in June that its 2008 operating profit would fall from a year ago, hit by high raw material costs and slowing consumer spending.

Chief executive Jukka Moisio told Reuters there were some signs of slowing demand for its products in its main markets in Western Europe, but he expects the credit crunch to have only a moderate impact on ice cream and fast food packaging sales.

Stora Enso is looking for ways to boost its energy self-sufficiency in the face of soaring costs and said it would invest in more power plants.

Chief executive Jouko Karvinen said that the firm's overall self-sufficiency was about two-thirds, but could be improved to reduce volatility in costs.

The firm has made an investment of €260m (£206m) in a multi-fuel power plant for its Langerbrugge mill in Belgium and Maxau mill in Germany to boost self-sufficiency, due to come on stream in 2010.

Reuters Summits are roundtable interviews and are closed to other media attending.