Sappi Ngodwana Mill’s Expansion Bodes Well for Future Growth
Johannesburg, South Africa 17 June 2014 -- The successful upgrade to produce Specialised Cellulose (also known as dissolving wood pulp) at Sappi’s Ngodwana Mill in Mpumalanga marks an exciting phase of growth and development for the company, and the province. On 18 June 2014, MEC of Finance, Economic Development and Tourism of Mpumalanga, Mr Sikhumbuzo Eric Kholwane along with Sappi Chief Executive Officer Ralph Boëttger officially opened the new Specialised Cellulose fibreline.
The expansion and modernisation of Ngodwana Mill commenced in 2011 as part of Sappi’s strategy to invest in fast growing, high margin businesses that offsets the decline of coated paper consumption in mature markets. Project GoCell, as the project was known, converted a fibre line at the mill to produce 210,000 tons a year of Specialised Cellulose, in addition to its existing newsprint and linerboard (packaging paper) production. Specialised Cellulose is a sought-after natural, renewable fibre with a wide range of uses in the textile, consumer goods, foodstuff and pharmaceutical industries.
The expansion has helped to increase Sappi’s total global production of this beneficiated wood fibre to 1.3 million tons per year, entrenching its position as the global leader in this market. Specialised Cellulose is also produced at Sappi Saiccor Mill in KwaZulu-Natal and Cloquet Mill in Minnesota in the United States.
As the world’s population grows, so does demand for Specialised Cellulose. “Extensive research and interactions with our customers have convinced us that this is one of the best markets in which to invest for the future,” said Sappi Limited Chief Executive Officer, Ralph Boëttger. The global demand growth for this raw material is approximately 6% a year. In Asia, the company’s biggest market, it is projected that the burgeoning middle-class will grow from a current 1.9 billion to about 2.7 billion by 2030 – accounting for 43% of global consumption expenditure.
In opening the new fibre line, the MEC congratulated Sappi on their investment and thanked Sappi for their confidence in Mpumalanga. He stressed that only by the government and the private sector working in partnership will development and the growth aspirations of the province be achieved.
Locally, this venture is a vote of confidence in South Africa as a good place for manufacturers to invest for the future. Sappi is the first multinational with manufacturing interests in the Lowveld region. As such, the expansion does not only reposition the company for sustained growth, but also strengthens economic development in the province. Commented Alex Thiel, Chief Executive Officer Sappi Southern Africa: “As a long term investment, the expanded operation will help generate more export revenue and boost the local economy by securing jobs in an area where unemployment is rife”. A key objective of the project was that, during the civil and construction phase, it should benefit the community through skills training and development. This has been successfully achieved. Project GoCell’s community training initiatives were recognised in the BHP Billiton Achiever Awards competition (2012). Sappi won first place in the categories ‘Re-skilling and Empowerment’ and ‘Best Training Programme for large companies’.
Another important benefit of the expansion has been the improvements made to the mill's environmental footprint. The bleach plant has been replaced by a new process that is chemically more efficient and that generates less effluent. In addition, Ngodwana Mill will burn 61,000 fewer tons of coal per year, which equates to 120,000 tons less carbon dioxide emissions. Project GoCell was commissioned in the third quarter of 2013.
More about Sappi Southern Africa:
Sappi Southern Africa, an integrated forest products company, meets the needs of local and international customers through a wide range of products from three divisions:
Sappi Southern Africa is a division of Sappi Limited (JSE: SAP); a global company headquartered in Johannesburg, South Africa with over 13,700 employees, and manufacturing operations on three continents in seven countries and customers in over 100 countries around the world.