Storage towers at Sappi’s Ngodwana wood mill in Mpumalanga. Picture: BLOOMBERG
Sappi CEO Steve Binnie said the trade war between the US and China hurt the prices of dissolving wood pulp, which is used to create viscose fibre for fashionable clothing and textiles. He said the company, which has a net debt of $1.5bn, expects ebitda in the first quarter of the 2020 financial year to come in below that of 2019 due to the current “very weak” prices in the dissolving wood pulp market.
Sappi also said that given the low prices for dissolving wood pulp, it had reduced capital expenditure. “Other than the 110,000-ton expansion of Saiccor which is currently under way, we have not committed capital to any material project,” the company said.
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