Sappi pumps R105m into more capacity

File picture: Supplied

File picture: Supplied

Published Jul 7, 2015

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Johannesburg - Sappi Borregaard (Norway) and Sappi (South Africa) are increasing capacity at their lignin joint venture in SA by 20 000 tons.

In a statement, the companies say they are increasing production capacity at LignoTech, in South Africa. The added volume will be marketed to the joint venture company’s existing applications and geographical markets.

LignoTech will spend about R105 million on the expansion, which is expected to be completed in 2017.

Borregaard president and CEO Per Arthur Sørlie, President and CEO says: “It is a strategic priority for Borregaard to grow our lignin business. This investment will strengthen LignoTech South Africa’s competitive position, and improve our offering to key markets in Asia, The Middle East and Africa.”

The Borregaard Group has 1 080 employees in 16 countries and turned over about $500 million last year. Its lignin business constitutes close to 50% of the group’s turnover with manufacturing plants in seven countries.

Sappi has about 13 000 staff globally and has customers in 161 countries and group sales of $6 billion.

Sappi CEO Steve Binnie adds, “looking to the future, Sappi will target strong growth from new business opportunities related to energy, nanocellulose and bioproducts including lignin and sugars. This expansion is an important vote of confidence in our joint venture with Borregaard and the global competitiveness of South Africa-based LignoTech”.

LignoTech South Africa is a joint venture for the manufacture of lignin products jointly owned by Borregaard and Sappi. The plant was established in 1997 in KwaZulu-Natal and the capacity has been gradually expanded over time. The new investment will increase the installed capacity to approximately 180 000 metric tons of dry substance per year.

Borregaard provides the joint venture with sales and marketing functions in overseas export markets, in addition to technology, research and development functions. Sappi supplies lignin raw material and utilities from Sappi’s Saiccor Mill.

The products from LignoTech South Africa are used in a range of applications such as industrial dust control, concrete admixtures, animal feed and agrochemicals.

IOL

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