SCA could sell more packaging ops: CEO

STOCKHOLM/HELSINKI (Reuters) - Swedish hygiene and paper products group SCA (SCAb.ST: Quote, Profile, Research, Stock Buzz) may sell more businesses at its troubled packaging unit, its head said on Wednesday.

The paper sector is suffering from overcapacity, while rising wood and energy prices have also hurt, though SCA has benefited from its focus on better-performing consumer hygiene products operations.

In June SCA agreed to sell its corrugated board business in Britain and Chief Executive Officer CEO Jan Johansson told the Reuters Paper Summit on Wednesday it may sell more businesses within the packaging unit.

"That is possible, absolutely," Johansson said.

"I wouldn't rule that out, because what we have said is that we aren't going to spend time or money in regions or businesses where we don't see that we get at least as good return as we get in hygiene."

SCA's second-quarter earnings were hit by pressure on its packaging and forestry units -- in packaging due to customers' high inventory levels of containerboard (testliner).

Johansson said those inventories were still too high.

"Kraftliner .kraftl is in a stronger position ... Certainly, we will have price increases in kraftliner."

SCA announced higher prices on containerboard earlier this week.

"It's still to be seen whether or not we'll get those price increases through. It depends very much on when the market starts up in September ... it could go either way," Johansson said.

"We don't see inventories coming down. Certainly the price pressure on testliner will walk through to corrugated (paper) and we see slower market on corrugated. We don't have the growth that we had in the beginning of the year.

(Reporting by Anna Ringstrom; Editing by David Cowell)