Sappi's R7-billion injection to boost KZN economy

Sappi Limited has announced a whopping R7-billion in planned investments in KwaZulu-Natal which acting Premier Sihle Zikalala believes will have a massive positive impact on the province’s economy.

The South African pulp and paper company on Monday announced major planned upgrades at its Saiccor Mill in Umkomaas‚ south of Durban. The investments will include a R2.7-billion capacity expansion project and a planned R5-billion over five years in various continuous improvement initiatives and upgrade projects.

Zikalala said in a statement on Monday that it was heartening that more and more business organisations such as Sappi continue to express their commitment to the provincial economy.

He said the massive investments currently being poured into different parts of the province by big conglomerates were a major vote of confidence in the province’s resolve to grow its economy.

Zikalala said the increased and expanded investment reaffirmed Sappi’s commitment to the province.

“We will continue to sell our province as a destination for quality investments. Working with central government‚ we will also continue to create an environment which is conducive for businesses to thrive‚” said Zikalala‚ who is the province’s economic development MEC.

Zikalala‚ who was elected unopposed as the provincial ANC chairman at its conference over the weekend‚ commended Sappi for its recently launched skills centre near the Saiccor Mill which has created training and skills opportunities for the local youth.

He said he had been assured that Sappi would work swiftly to obtain the necessary authorisation to make the company’s planned investments a reality.

Sappi Limited Group CEO Steve Binnie said: “Sappi has seen significant benefits in serving its global customers from its South African operations. Sappi had invested some R4.3-billion from 2012 to 2018 to increase its dissolving pulp capacity in South Africa. This global market has shown such strong growth that Sappi will again increase capacity in South Africa by investing R2.7-billion at Saiccor during 2018 and 2019.”

"Sappi‚ which contributes 1% of South Africa’s total foreign revenue from its South African operations and supplies the fruit export industry with most of their packaging requirements which contributes around 4% to the country’s foreign revenue‚ is pleased to be able to support President Ramaphosa’s call for significant investment into the South African economy.”

Alex Thiel‚ CEO of Sappi Southern Africa‚ said: "In addition to expanding capacity‚ Sappi is planning to invest R5-billion over the next five years through maintenance and upgrade projects to decrease production costs‚ introduce new technology‚ optimise processes and future-proof manufacturing systems at Saiccor Mill. These investments will secure the mill’s future by increasing its global cost competitiveness and significantly reducing its environmental footprint.”