Sappi freezes dividends as its market shrinks

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The paper and pulp manufacturer says profits declined by half compared to the same quarter in 2018

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.

The company said in 2018 that it would invest R2.7bn to increase the capacity of the Saiccor mill in Umkomaas, south of Durban, where it produces dissolving wood pulp.

 

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