February 8, 2017

Sappi Ltd. announces $165M investment at Skowhegan mill

Courtesy / Sappi North America
Courtesy / Sappi North America
The woodyard at Sappi North America's Somerset Mill in Skowhegan, is getting a $25 million upgrade that's slated to be completed later this year. Sappi Ltd., the mill's South African parent company, announced today it was investing an additional $165 million in the mill's Paper Machine No. 1.

Sappi Ltd., the South African company that owns two paper mills in Maine, announced in Johannesburg today it will invest $165 million in Paper Machine No. 1 at its Somerset Mill in Skowhegan.

The announcement accompanied the company's media release on its first quarter results, which included achieving a $90 million profit for in the first quarter of 2017, compared with $75 million for the same period a year ago.

The $165 million capital project at the Somerset Mill is intended to expand Sappi North America's manufacturing capabilities and flexibility to include a variety of consumer packaging products.

"This investment on Paper Machine No. 1 at its Somerset Mill in Skowhegan establishes a strong platform for growth in paper-based packaging while maintaining Sappi's leadership position in the graphic paper market, increasing annual production capacity at this mill to almost 1 million tons per annum," the company said in a release announcing the investment.

Strategic investment

"This move complements our long-term 2020Vision strategy, which seeks opportunities to substantially increase our group earnings before interest, tax, depreciation and amortization," said Steve Binnie, CEO of Sappi Ltd. "By investing in our business to pursue growing areas of demand, we can remain profitable and competitive in the global marketplace."

Mark Gardner, president and CEO of Boston-based Sappi North America, said the Somerset's "existing world-class infrastructure, together with its talented workforce and access to high-quality fiber, makes 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," he said in a release.

The planned project at the Somerset Mill in Maine is slated to come online early in 2018.

Last summer, Sappi North America, a leading producer and supplier of diversified paper and packaging products, announced it was moving forward with a $25 million capital project to update the woodyard at its Somerset Mill in Skowhegan. That project is slated to be completed in late November 2017.

Collins, King applaud investment

U.S. Sens. Susan Collins, R-Maine, and Angus King, I-Maine, released the following joint statement about Sappi's planned investment:

"Sappi's major investment builds on the company's leadership in modernizing and investing in the critical infrastructure that will continue to help the forest industry be a significant source of good jobs in Maine. In conjunction with the substantive recommendations offered by the Economic Development Assessment Team last month, Sappi's investment is a critical, positive step forward in the ongoing effort to strengthen Maine's forest economy by bolstering existing products and creating new ones. We welcome this announcement as yet another sign that our state's forest economy is not only growing, but is well-positioned to thrive in the coming years."


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