Sappi Completes Series of Coated Paper Capital Investment Projects

BOSTON—April 25, 2013—Sappi Fine Paper North America has announced the most recent completion of a series of coated paper capital investment projects during its 2013 fiscal year—a significant move by the company to maintain and strengthen its leadership position and take advantage of growth opportunities in the coated paper market. While ongoing investment to keep paper production globally competitive has generally reduced in the marketplace, Sappi’s commitment to excellence in high-quality coated paper manufacturing continues to remain a top priority. These strategic investments allow Sappi to more efficiently manufacture its full grade and basis weight range of product with unmatched quality and flexibility into the future.

Cloquet Mill Investments
The Cloquet Mill in Cloquet, MN, has completed a $19M investment in its coated papermaking operations which includes a dry fiber handling system, as well as new refiners and former upgrade on PM4. The former rebuild implemented on PM4 allows for all grades and weights to be manufactured with the technical capability of using dry fiber to produce the same base sheet formation and quality as slush fiber. Extensive trials have been conducted by Sappi for both sheet and web products to guarantee the quality and repeatability of product made with dry fiber meets the high standards that customers have come to expect from Sappi paper.

These coated paper investments are a part of the $170M capital investment project currently in progress at the Cloquet Mill that will convert the kraft pulp mill to production of dissolving pulp used in the textile and consumer goods markets, improving site profitability at Cloquet and ensuring global cost competitiveness.

All paper produced at Cloquet carry both a Forest Stewardship Council (FSC) and Sustainable Forestry Initiative (SFI) chain of custody certification. The Cloquet Mill also continues to have one of the lowest carbon footprints in the industry with over 85 percent renewable energy.

“We remain deeply committed to the coated paper market as well as to surpassing the expectations of our customers,” said Rick Dwyer, managing director, Cloquet, Sappi Fine Paper North America. “Our investments in the production of high-end paper will allow Sappi to serve this market into the foreseeable future and enable more agility and efficiency within our papermaking process. We are making this strong commitment on the paper side of the business to ensure that quality paper continues to prove its value in publishing and advertising, especially when used strategically with digital counterparts.”

Somerset Mill Investments
At Sappi’s Somerset Mill, in Skowhegan, ME, the rebuild of PM3 was completed successfully in October 2012. The $13M investment to upgrade coated paper manufacturing surpassed speed, production, and variable cost goals while achieving all of the formation and quality improvements outlined in the project plan. The implemented improvements on PM3 now allow for the production of a broader range of products on this machine. Sappi expects to see long-term benefits as a result of this project in the form of chemical and fiber savings, as well as increased paper production.

Enhancements to Product Labels
As illustrated by Sappi’s recent North American infrastructure investments, the company takes great pride in producing products in the United States and is pleased to announce the re-design of product labels to more clearly emphasize Sappi’s support for local production by using the “Made in the USA” logo. Based on expressed interest from a wide variety of customers, this element was included during a label redesign improvement project that also aims to provide customers with a more organized way of displaying product information on labels. The new look features a cleaner design with bold, easy-to-read typefaces, and is now available on most products with the balance by the end of the year.

Capital Investments Across Business Sectors
In addition to Sappi’s capital projects in the coated business and the Cloquet pulp mill conversion to dissolving pulp, the company also recently announced a $2.5M capital project at the Westbrook Mill to re-build the speciality coater in the Release sector. These strategic investments represent Sappi’s strong track record of innovation and long-term growth across its business sectors.

About Sappi Fine Paper North America
Sappi Fine Paper North America, known for innovation and quality, is a preeminent North American producer of coated fine and release papers and market pulp headquartered in Boston. Its coated fine papers, with highly recognized brand names such as McCoy, Opus, Somerset and Flo, are used in premium magazines, catalogs, books and high-end print advertising. The company is also the world’s leading supplier of release papers for the automotive, fashion and engineered films industries, including the globally recognized Ultracast brand. Sappi’s release papers provide the surface aesthetics for synthetic fabrics used in footwear, clothing, upholstery and accessories, as well as the textures for decorative laminates found in kitchens, baths, flooring and other decorative surfaces. An integrated pulp and paper producer, with state-of-the-art pulp mills, Sappi is the third largest seller of hardwood pulp in North America.

Sappi Fine Paper North America is a subsidiary of Sappi Limited (NYSE, JSE), a global company headquartered in Johannesburg, South Africa, with over 14,000 employees and manufacturing operations on three continents in seven countries and customers in over 100 countries around the world.

Source: Sappi.