Getting More Value From Our Basic Wood Fibre Resource

According to Sappi CEO Steve Binnie, the group’s latest financial results show that it is ready to capitalise on market moves away from plastic to natural fibre and paper-based packaging. Sappi Biotech executive vice-president Louis Kruyshaar outlines the company’s plans to Lloyd Phillips.

- Lloyd Phillips

What are Sappi’s historical core business and markets?

In the 1990s and early 2000s, Sappi became a global business focused on manufacturing and marketing graphic, or printing, paper. With the rise of digital communications, international demand from this market segment began to stagnate. In 2012, Sappi responded to this by beefing up its traditional (and the world’s largest) dissolving wood pulp (DWP) business through strategic investment and expansion in production capacity. DWP is used by our international manufacturing clients in the areas of textiles, pharmaceuticals, and food applications. We already have about 20% global market share of supply, and it remains a strong long-term growth segment for Sappi.

Then, in 2015, Steve Binnie [Sappi CEO] launched Sappi’s Vision 2020, which entailed implementing a more diversified portfolio approach across the group. While producing graphic paper will still account for about 25% of our annual earnings, we also intend taking our knowledge of coated printing paper and applying this to producing high-quality coated packaging and speciality papers, for which global demand is growing. We’ve been ramping up this section of our business to also ultimately contribute about 25% to our annual earnings.

Of the remaining 50% of annual income, the intention is to have DWP generate 40%, and for earnings from our new investments in bio refined products to contribute about 10% .

What is Sappi’s biotech business?