Further to announcements of March and July 2015 regarding the sale of Sappi's (Johannesburg, South Africa) Cape Kraft Mill in Milnerton, Cape Town, South Africa, Sappi confirms that all conditions were met and that the mill was transferred on November 23 to the new owners, the Golden Era Group. The sale is not categorizable in terms of section 9.5 of the JSE Listings Requirements.

The sale of Cape Kraft Mill, along with the sale of Enstra Mill, located in Gauteng near the town of Springs in South Africa, which was completed last month, signals Sappi's exit from the recycled paper packaging market, a market where Sappi notes that it did not enjoy any competitive advantage. Sappi Southern Africa in the future will focus on:

• Its commercial timber operations
• Enhancing its already world-leading dissolving wood pulp capacity at Ngodwana and Saiccor Mills
• Investing in containerboard capacity at its Tugela and Ngodwana mills
• Its tissue and office (copy) paper capacity at Stanger Mill
• Its newsprint capacity at Ngodwana Mill
• Providing the South African market with a world-class range of coated, uncoated, and specialty papers made at Sappi's European mills
• Increasing its by-products offering, including Lignosulphonate from Tugela Mill. 

During the course of 2016, Sappi will invest in projects to increase the company's energy self-sufficiency through the installation of new turbines at the Tugela and Saiccor Mills. The turbines will produce approximately 23 MW of power and contribute to increasing Sappi Southern Africa's self-sufficiency from 56% to 72% by the end of 2016. This will help mitigate against any future power shortages, and more importantly will lower Sappi's energy costs.

 

As mentioned previously the combined proceeds from the sales of Enstra and Cape Kraft Mills amounts to just under R600 million.