Borregaard and Sappi announce South African capacity increase

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Borregaard and Sappi have announced that they will work to increase lignin production capacity by 20,000 tonnes at the jointly managed LignoTech facility in South Africa.

LignoTech South Africa is a joint venture for the manufacture of lignin products, with ownership split 50/50 between Borregaard and Sappi, established in 1997 in KwaZulu-Natal. The investment by LignoTech is estimated at ZAR 105 million, with the project marked for completion in 2017.

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The new investment will increase the installed capacity to an approximate annual output of 180,000 metric tonnes of dry substance.

Borregaard brings its sales and marketing expertise to the joint venture with particular experience in overseas export markets, alongside its technology and R&D capabilities. Sappi is firmly responsible for the production side of the partnership, supplying and processing raw lignin.

Per Arthur Sørlie, President and CEO of Borregaard said: “It is a strategic priority for Borregaard to grow our lignin business. This investment will strengthen LignoTech South Africa’s competitive position, and improve our offering to key markets in Asia, The Middle East and Africa.”

Steve Binnie, CEO of Sappi Limited, added: “Looking to the future, Sappi will target strong growth from new business opportunities related to energy, nanocellulose and bioproducts including lignin and sugars.”

The Borregaard Group employs just over 1,000 people, across 16 countries and had a turnover in 2014 of roughly $500 million. Lignin accounts for close to 50 percent of its turnover.

Sappi is a global company whose main operations focus on dissolving wood pulp used in the manufacture of viscose staple fibre and pharmaceutical products, as well as printing and packaging. The company employs over 13,000 people across three continents and has group sales of $6 billion. It is head quartered in Johannesburg, South Africa.

Read the July Issue of African Business Review.

Source: [Sappi]