Driving diversification in speciality papers

The Sappi Group of South Africa is a global leader in the manufacture of dissolving wood pulp specialities and packaging papers, as well as graphic printing papers and bio-chemical products. The company has recently announced its latest, robust full-year results. These will now be enhanced by its strategic acquisition of the Cham Paper Group of Switzerland and increased investments in sustainability and renewable energy. Philip Yorke reports.

Sappi is the world’s leading producer of dissolving wood pulp (DWP), which is a highly purified form of cellulose extracted from wood through specialised cellulose processes. DWP is the primary catalyst for the manufacture of viscose staple fibre which is a natural substitute for cotton and polyester in the textile industry. However, it is also used in foodstuffs, household products and pharmaceuticals. In addition to graphic papers, Sappi also produces speciality and packaging papers and all of these are playing an increasingly important role in an environmentally conscious world.

Further diversification can be found in the company’s bio-energy and biomaterials programmes, which derive additional value from wood by extracting bio-refinery products and producing energy from renewable resources. Nano-Cellulose products are also being pioneered by Sappi to provide low-cost Cellulose NanoFibrils (CNF) via its patented process that offers new global growth opportunities and new markets for the company.

Today the Sappi Group is a truly global player with 14 state-ofthe-art paper mills in operation worldwide – seven located in western Europe, three in the USA and four in South Africa. Collectively they produce over 5.4 million tonnes of paper, 2.2 million tonnes of paper pulp, and 1.4 million tonnes of dissolving wood pulp per annum. The group employs more than 12,000 people and in 2017 recorded consolidated revenues of around US$ 800 million.

20-20 Vision

Sappi’s future is bright and its continuing success is embodied in its strategic development plan, which it calls its ‘20-20 Vision’. This draws on the power of ‘One Sappi’ and the whole group as it

expands beyond the realms of paper and pulp to unlock and commercialise the potential of wood-fibre-derived bio-products. As a longstanding leader and innovator in its field, the company is able to deliver tailor-made, customised solutions for its customers’ specific requirements to anywhere in the world.

Through the power of ‘One Sappi’ the group is committed to collaborating and partnering with its stakeholders to offer them an exciting and prosperous future in sustainable wood-fibre. Sappi is listed on the Johannesburg Stock exchange and its shares are also traded in the USA through a level 1 ADR Programme. The group’s Market Cap in September 2017 was US$ 3.63 billion.

Commenting on the group’s latest performance, Sappi’s CEO Steve Binnie said, “Sappi has delivered another strong set of results with profits up 6 per cent year-on-year. I am very pleased with the growth of the dissolving wood pulp and speciality packaging businesses. Furthermore, our initiatives to reduce variable costs and the benefits of lower interest charges were able to mitigate higher paper pulp prices and a stronger rand/dollar exchange rate during the reporting period.

“In the periods under review, demand for DWP was robust, growing at double digits throughout the year. We shifted more production capacity to speciality packaging during the year. The European business experienced a good final quarter, with expanded sales volumes and price increases helping to counteract the impact of rising paper pulp prices. Demand for speciality packaging continues to grow, and we require additional capacity from the conversions of the paper machines at Maastricht and Somerset Mills in order to serve this growth. These conversions have commenced and are set to be completed in the second and third fiscal quarters of 2018, respectively.”

New digital horizons

In keeping with its strategy of combining its organic growth with strategic acquisitions, Sappi successfully concluded its purchase of the speciality paper business of the Cham Paper Group Holding (CPG) on 28 February 2018. The Cham Paper Group AG is a leading manufacturer of coated speciality papers, based in Italy.

The company’s plant in Carmignano, Italy is a non-integrated paper mill that is capable of producing over 100,000 tonnes of

paper including CIS Flex-Pack, CIS Label Papers, Wet Glue and selfadhesive applications. The company operates a similar paper mill in Trento, Italy and its portfolio includes silicone-based papers and super-calendared, uncoated flexible packaging papers. However, Cham Group’s digital imaging business, which is located in Cham, Switzerland in a 4000m2 industrial facility, is the jewel in the crown. Here the base paper from Cordino or Carmignano mills is converted to produce over 12,000 tonnes of digital imaging paper per year.

Strength in sustainability

Sappi is proud of its dedicated, long-term sustainability programme, which has spearheaded its business platform for many years. The company says that sustainability makes sound business sense and the results are plain to see. “We depend on our stakeholders to help us create long-term business value and on natural resources for our commercial viability. Accordingly, we have a strong business case for responsible corporate citizenship,” added Binnie.

Today the Sappi Group uses natural resources like wood fibre and water to create products that support society’s needs. In order to ensure the on-going viability of these resources, the company strives to achieve the highest standards of environmental performance.

For further details of the Sappi Group’s innovative paper products and services visit: www.sappi.com