JSE-listed forest products group Sappi has confirmed that it is considering a further expansion of its giant Saiccor dissolving wood pulp (DWP) mill in KwaZulu-Natal, having only recently pulled the trigger on a R7.7-billion investment to expand output at the facility by 110 000 t/y.
An investment decision is likely in 2022 or 2023.
Saiccor is already the largest single producer of DWP globally and the current brownfield expansion – which was the first project showcased at President Cyril Ramaphosa’s recent Investment Conference, where project commitments of R290-billion were unveiled – will increase the plant’s yearly nameplate to 890 000 t, or around 10% of the global market.
CEO Steve Binnie tells Engineering News Online that the expansion, which received final environmental authorisation only weeks ago, incorporates the flexibility to raise the mill’s yearly output to above a million tons.
The project is scheduled for completion by mid-2020 and, at peak, some 5 800 people will be employed in construction activities. The expansion will also result in a 9% rise in permanent jobs at the mill, which currently employs some 1 300 people.
The DWP market is expanding at around 5% a year, partly to meet growing textile-industry demand, but also because the product is viewed as more environmentally sustainable than either cotton or polyester.
Also known as dissolving cellulose, DWP is used by converters to manufacture a wide range of products, but is especially widely deployed in the production of viscose staple fibre, used in clothing and textiles.
Sappi’s decision to adopt a phased approach to the expansion of Saiccor is also informed by a need to secure sufficient hardwood feedstock.
For the past number of years, the group has been transitioning its forests from softwood to eucalyptus, which, in the favourable KwaZulu-Natal environment, takes some eight years to mature.
The current, as well as any future, Saiccor expansion will also reinforce Sappi’s ongoing strategic transition from “paper to wood fibre”.
Historically, Sappi focused on graphics paper, but the market has come under increasing pressure in recent years.
Already in 2018, around 50% of Sappi’s $323-million profit was derived from DWP and, by 2020, the company expects the contribution of its traditional graphics paper business to fall to around 25%.
Sappi is also converting a number of its mills in Europe and the US from graphics paper to packaging grade materials in line with an international trend towards paper-based packaging, as well as legislative changes promoting recycling and the use of recyclable materials.
The company says the completion of the conversion projects at Somerset and Maastricht in the past year will allow it to increase production of paperboard grades to serve this growing market