Sappi welcomes Deputy Minister Mzwandile Masina on visit to Specialised Cellulose Plant at Ngodwana Mil

Sappi welcomes Deputy Minister Mzwandile Masina on visit to Specialised Cellulose Plant at Ngodwana Mill

Sappi today welcomed Deputy Minister for Trade and Industry, Mr Mzwandile Masina, MP, to the Sappi Ngodwana Mill to give the minister and a delegation from the dti (Department of Trade and Industry) a first-hand look into the recently commissioned R3.3 billion Specialised Cellulose (dissolving wood pulp) upgrade undertaken at the mill. Sappi received support for the project from the dti through its Industrial Policy Action Plan (IPAP).

Sappi Southern Africa’s Chief Executive Officer (CEO), Alex Thiel, stated that the company is proud to share the successes that have been achieved by the new plant, and welcomes the opportunity to further exchange ideas with government. “We are grateful for the support of the dti. The successful upgrade and modernisation of the mill is part of Sappi’s strategy to invest in fast growing, high margin businesses that is offsetting the decline of coated paper consumption in mature markets. It further strengthens Sappi’s position as a global leader in this fast growing market segment.” 

Speaking at the event today, Deputy Minister Masina expressed his satisfaction at Sappi’s contribution to the economy of South Africa, as well as job creation. He encouraged the company to work closely with the dti in achieving Sappi’s transformation targets. ‘The Department sees many opportunities at Sappi that can be explored as part of the black industrialist programme. We are happy to see that the financial assistance that we provided to Sappi is making a positive and a lasting difference in driving South Africa’s economy’ he said.

The expansion and modernisation of Ngodwana Mill commenced in 2011 as part of Project GoCell which converted a fibre line at the mill to produce 210,000 tons a year of specialised cellulose (dissolving wood pulp), 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 textiles, consumer goods, foodstuffs 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, with 1 million tons being exported from South Africa to customers in Asia and around the world. Specialised cellulose is also produced at Sappi Saiccor Mill in KwaZulu-Natal and Cloquet Mill in North America.

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 operations 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. Alex Thiel: “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. Over 40,000 people benefit directly and indirectly from Sappi’s presence in the province.”

A key desired outcome of the project was that, during the civil and construction phase, it should benefit the local 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’. Over 700 previously unskilled and unemployed community members were up-skilled with many working on the project.

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. As the world’s population is growing, so is demand for specialised cellulose.

Sappi has undertaken extensive research and interactions with our customers which have convinced us that this is one of the best markets in which to invest for the future. The growing global demand for this raw material is approximately 6% a year. The demand for Viscose Staple Fibre (VSF), which is Sappi’s focus, is expected to grow by around 8% per year.