US – Sappi North America, a subsidiary of Sappi Limited, has approved a US$418 million investment to rebuild a paper machine at its Somerset Mill in Skowhegan to make packaging and specialty papers.
The investment at the mill will “increase its Paper Machine No. 2’s capacity and produce solid bleached sulfate (SBS) board products, a sustainable alternative to plastic packaging,” the company said in a release.
Sappi North America President and CEO Mike Haws said: “This move complements our long-term Thrive25 strategy, which focuses on growing our portfolio in packaging and speciality papers, pulp and biomaterials.
“By investing in our business to pursue growing demand areas, we can remain profitable and competitive in the global marketplace.”
The announcement came two days after the mid-term election, where the future of the Skowhegan mill itself had been a flashpoint in Maine’s gubernatorial race.
The project, which earned praise from Gov. Janet Mills and US Sens. Susan Collins and Angus King, will allow the mill to make more packaging materials.
Over the years, the mill has slowly shifted away from producing glossy graphic paper and more toward packaging.
Sean Wallace, Managing Director for the Somerset mill said: “We’re finding that the demand for the paper packaging grades that we’re offering off our no. 1 machine are in very high demand. We believe that moving no. 2 into those same grades is a long-term benefit for the mill.”
Considered a more environmentally sustainable alternative to plastic, SBS is used in packaging for the cosmetics and perfume sectors, healthcare and beauty, confectionery and luxury drinks, as well as consumer electronics and others.
In addition, the material is also used in making plates, dishes and cups for the foodservice market.
Haws added: “Somerset’s existing world-class infrastructure and success in producing high-quality SBS products, together with its talented workforce, make the mill an excellent and obvious choice for this investment.
“Increasing our flexibility and expanding the paper mill’s capability and capacity will ensure that we continue to make superior products at Somerset for years to come.”
The project at the Somerset Mill in Maine is scheduled to be operational by early 2025
Meanwhile, Sappi has reported that its packaging and speciality papers’ segmental year-on-year (YoY) sales volumes increased by 3% in its fourth quarter and full-year financial results for fiscal 2022.
The company added that the sales volumes for the pulp segment increased by 15% year-on-year on the back of strong market demand and improved logistics as Sappi had secured regular breakbulk shipping alternatives for its South African exports.
The graphic paper segment also generated a record EBITDA of US$650 million for the period under review.
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