Economic Responsibility at Sappi Has Been a Transformative Journey

Jul 24, 2018 5:05 PM ET

Sustainable development is core to our business strategy. We balance a daily operational focus of sourcing wood, identifying productivity improvements and fulfilling customer orders, with a longterm view for growth in core markets and expansion through investment in new markets, innovative equipment and groundbreaking technology.

“Sappi North America saw many successes in 2017 despite challenging market headwinds—and the momentum to achieve stronger profi tability and growth in 2018 through product diversifi cation is already well underway.” Mark Gardner, President and CEO, Sappi North America 

Reflections on 2017 Financial Performance

The Sappi Group again delivered a strong performance in 2017 despite higher purchased pulp prices and a stronger Rand/Dollar exchange rate. Profi t for the year increased 6 percent to $338M and earnings per share increased 12 percent. Even with lower cash generation than 2016 due to large capital investments in all regions, we reduced debt by $86M and declared a dividend of $0.15.

In North America, procurement initiatives and continuous manufacturing improvement mitigated market price increases for raw materials and declining paper prices while enhancing our competitiveness in the graphic paper segment. Specialty packaging growth further diversifi ed our business and helped alleviate our dependence on the declining graphic market.

Our Transformative Journey Continues

In 2015, Sappi Limited announced a new strategic vision to reshape our business through further diversifi cation. Our journey is an intentional evolution of the business—changing to meet market needs and opportunities.

By 2020, we aim for the composition of our group EBITDA to be balanced such that 25 percent is derived from packaging and specialties; 25 percent from graphic papers; 40 percent from dissolving wood pulp; and 10 percent from new business opportunities such as nanocellulose, biorefi nery products and energy.

In 2017, Sappi took several important steps in furtherance of those goals: Acquisitions of Plaxica, a technology leader in sugar extraction; Rockwell Solutions, a barrier coating company; and an announced deal for Cham, a specialty packaging company, that when closed, will extend our reach in biomaterials and packaging, respectively. Investments at Gratkorn, Lanaken, Maastricht and Ehingen Mills in Europe, the Somerset and Cloquet mills in North America and dissolving wood pulp debottlenecking at Saiccor and Ngodwana all support the transition to a high-growth, diversifi ed company.

Read more from Sappi North America's 2017 Sustainability Report here: