The £1.3bn UK toilet tissue, facial tissue and kitchen towel market is due for a shake-up, says Mats Berencreutz, head of SCA's European tissue business.

And, following the company's purchase of P&G's European tissue operation for €512m (£347m) in March, that's exactly what he plans to give it.

The deal, which is subject to regulatory approval, includes P&G's five plants in England, Italy, France and Germany and brands such as Tempo, the market leader in paper handkerchiefs in Western Europe. It also gives SCA the exclusive

licence to the UK's third best-selling toilet tissue brand, Charmin, and Bounty, the UK's best-selling kitchen towel brand.

This is a significant move for the company. While SCA is Europe's largest consumer tissue supplier, with a 20% share of the market, it so far has only a limited branded presence in the UK, with Velvet toilet tissue, which has annual sales of less than a third of leading brand Andrex - £97m compared with £320m.

The additional brands and manufacturing capabilities will enable SCA to challenge the dominance of Kimberly-Clark's Andrex and Kleenex brands, believes Berencreutz.

"Kimberly-Clark is a formidable competitor and we have a lot of respect for it," he says. "But this deal means we can provide a much more competitive offer to Kleenex and Andrex and make retailers appreciate having more than one major branded player on the shelf. We want to tell people we are here and that we are committed to growing the market."

SCA is well placed to unlock the potential of P&G's brands. It has invested £677m in its supply chain over the past five years and Berencreutz says its expertise can improve efficiency in the UK. "The P&G business is primarily a branded business and it fits perfectly with the company," he says. "There are two real synergies: the product offering and the supply chains. P&G had issues in optimising shipping out of Manchester and we have the capabilities to improve that. We have one of the most efficient supply chains in the UK, but we now need to get the rest of the business in order. We are in significantly better shape to deliver the goods to the customers."

It won't be straightforward. The rationalisation of product ranges and a growing focus by retailers on own label has led to frequent switching of suppliers by retailers and tougher demands, admits Berencreutz. The multiples' everyday low pricing strategies coupled with relentless promotional activity in the paper category also make it a tough area in which to operate.

"Tissues have gone through a difficult period in the UK. We have found ourselves in the unpleasant situation of being in a tough price war," says Berencreutz. "Retailers are pushing down prices and there has been a rise in the cost of energy and raw materials. Few players have invested in innovation and product development and the result has been that the entire market has underperformed in terms of profitability."

His first task will be to address the decline in the Tempo and Charmin brands, sales of which have fallen by 56% and 2.7% respectively over the past year. This, he says, will be done by investing in better category management, improving packaging and working with retailers to become a more attractive supplier.

Berencreutz also emphasises the need to increase the rate and quality of NPD in the category, which he says has lagged behind the rest of Europe. One objective is to extend SCA's brands into new markets, for instance, repositioning Bounty as an all-purpose towel. "Research around kitchen towels in the US shows their use is much broader than in Europe," he says. "They use it for jobs around the house and garden and this is a trend we see major growth coming from."

He also wants to add value to the tissue market and, while he is keeping forthcoming launches under wraps, innovation is expected to include tissues enriched with soothing lotions and those with antibacterial properties to rival Kleenex Anti-Viral and Balsam variants.

Marketing will be key. SCA is trying to raise the profile of the toilet tissue category with a £10m marketing spend for the Velvet brand this year, including a £6m TV advertising campaign using its 'baby MD' character. It is also sponsoring the Channel 4 programme Supernanny and says Tempo, Bounty and Charmin will also benefit from strong marketing campaigns this year.

There is a long way to go to before SCA is a true contender to Kimberly-Clark's crown, but on paper the company already looks in better shape. It's just the beginning, says Berencreutz: "Our ambition is to be the largest in volume and the undisputed tissue category leader."