Sappi to invest $300m in North American and European business

South African paper producer Sappi will invest $305 million in strengthening its business in North America and Europe.

The company will focus on the speciality packaging segment, in two regions that presently account for more than three-quarters of its group-wide sales.

It will embark on a number of equipment upgrades and improvements to its production efficiency in the next three years at its mills in Alfeld and Ehingen, in Germany; Lanaken in Belgium; and Maastricht in the Netherlands.

Sappi will invest approximately $165 million in North America to upgrade a paper mill, as well as $140 million on several projects in Europe.

The changes include converting its Maastricht mill to a high-quality solid bleached board (SBB) facility and expanding the lightweight packaging and speciality papers capacity of its Alfeld Mill by 10,000 tons per year. It is expected that the SBB business at the Maastricht processing plant will grow to 150,000 tons per year by 2019, as the business works towards increasing its product offering to packaging and speciality papers customers – especially in Europe.

Sappi makes a number of products for the food and beverage industry, including flexible pouches, cartons and labels.

Sappi Europe CEO Berry Wiersum said: “We are delighted to have received strong support from Sappi’s board. These projects will enable us to make better use of our assets to drive growth in speciality papers, as well as to reduce by 2020 our coated graphic papers capacity by about 200,000 tons.”

And Sappi CEO Steve Binnie said: “Our focus has always been to build and strengthen competitive advantage. Taken as a whole, these investments take advantage of our manufacturing base and the skills and knowledge of our people to enhance the potential of the mills, setting us on a strong course for the future.”