PEP spends $230m on tissue firm

Top selling toilet paper and sanitary brands change hands in transaction

Control of some of New Zealand's biggest toilet paper and sanitary product brands has changed hands in a $230 million deal.

High-profile private equity business Pacific Equity Partners now owns half the businesses behind many top-selling toilet tissue, baby nappy and paper towels brands here.

Toilet and facial tissue Sorbent, Libra feminine hygiene products, Handee, Handee Ultra and Tuff Mate paper towels, Tork commercial hygiene products, Treasures nappies, Deeko tableware, Purex and Orchid toilet paper, Tena incontinence products and Viti tissue products were named in PEP's application to the Government for clearance on the deal which needed state approval because it was worth $100 million-plus.

PEP has bought half the Australasian operations of Scandinavia's's Svenska Cellulosa Aktiebolaget. SCA announced late last year it was forming a joint venture partnership for its existing operations in Australasia with PEP.

"Working with local partners and in joint ventures in selected markets is a strategy that works well for SCA.

This deal in Australasia enables a more efficient financing as well as it increases the speed of development of the operations," the business said.

Tissue products are manufactured at the company's sites in Victoria's Box Hill, Te Rapa and Kawerau here and in Fiji.

Kerrin Thomson, SCA Hygiene Australasia's supply director based here, said the PEP deal had made little difference to the New Zealand operations so far.

"We're still employed by the same company on the same terms and conditions," Thomson said.

SCA Hygiene Australasia has New Zealand offices in Henderson and Thomson said the business owned a Kawerau plant in the Bay of Plenty where it made paper which was then turned into finished product at Te Rapa in Hamilton.

Jan Johansson, SCA's president and chief executive, said the PEP deal strengthened operations here and in Australia.

"It secures our access to local competence and the local capital market," he said.

A spokesperson for Foodstuffs (Auckland) with the Pak'nSave and New World chain, said sales were increasing in the women's sanitary pads and incontinence lines.

Paper Trail
* Has operations here, Australia, Fiji.
* Employs about 1500 people
* Net 2010 sales 4400m Swedish krona
* 70pc tissue, 30pc personal care products
* More than 700 people employed here
* Manufacturing at Kawerau, Te Rapa
Source: Svenska Cellulosa Aktiebolaget

By Anne Gibson | Email Anne