Sweden-based SCA signs an agreement June 18 for the sale of its UK and Ireland conventional-corrugated business to Spain’s SAICA for about $194 million in cash. After the divestiture, SCA will focus on specialized packaging only in its UK and Ireland operations.

SAICA is a privately-owned Spanish paper and packaging company with sales of approximately $2.48 billion. SAICA operates paper mills and corrugated facilities in a number of European countries, including the UK.

“The European packaging market is in great need of consolidation. SCA’s focus is on increasing value-added parts of the packaging business and also on creating growth in the Eastern part of Europe, while consolidating our existing operations in Western Europe,” says SCA president/CEO Jan Johansson.

Approximately 1,800 people are currently employed in these SCA operations. An agreement has been signed, where SCA will supply kraft liner at today’s volumes to SAICA over a five-year period and for test liner over a three-year period.

SCA also says it intends to close the New Hythe, UK, containerboard mill (capacity of 240,000 tons/yr) by mid-2010. Consultation with the unions will be initiated.