Raw material

Sappi’s growth projects

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Sappi has announced its intention to increase its productive capacity of bleached pulp by over 30% in the next four years to extract the maximum value from the pulp production chain. The company has furthermore stated that it will continue to invest in South Africa to develop the production of bleached pulp at its plants in Ngodwana and Saiccor.

The company’s CEO Steve Binnie has explained that Sappi will also increase its capital expenditure in South Africa, as the country still has good opportunities to offer. To this end, Binnie stated that Sappi has set aside 350 million dollars in capital expenditure for the 2017 financial year.

The manager said that «we have gone a long way and Sappi, which has always been well-known as a producer of coated paper, currently boasts a more diversified production. In other words, today’s Sappi is much more different than the company of twelve years ago».

The CEO has furthermore talked about how, in 2007, the company had to overcome the serious obstacle of its declining core business of coated graphic paper. Sappi therefore had to become more indebted and saw its margins shrink. Binnie explained that Sappi managed to reduce its net debt by 20% year on year, while its end year results clearly show that the company succeeded in increasing its profits by 91% to 319 million dollars, up from the 167 million dollars registered the previous year. Sappi managed to have profits grow in South Africa, i.e. in one of the regions where it works, although the country’s economy is growing by less than 1% and there is a constant threat of downgrading by international rating agencies. Binnie explained that «rating agencies do not exercise any direct impact on Sappi’s business, though. In fact, our business prospers on the weaker local currency, which helps us lower our costs».

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