Sappi’s profit slumps as it focuses on ‘shift in profit mix’
The company says projects in its European and North American paper facilities, as well as the revamping of some South African pulp plants, increased capital expenditure
Paper and pulp maker Sappi said on Thursday that its profit for the full year fell 4.4% as it ramped up investment to modernise plants and shift production to more profitable products. The Johannesburg-based company, whose European and North American operations contribute 51% and 25% of Sappi's sales respectively, said profit fell to $323m from $338m. The company said projects in its European and North American paper facilities as well as the revamping of some South African pulp plants increased capital expenditure. The investment is part of a "further shift in the product mix of the group away from the traditional graphic paper business towards higher margin and growth," Sappi said in a statement. Capital expenditure was $146m, the bulk of which was contributed by projects undertaken at the Ngodwana and Saiccor pulp mills in SA. "We are feeling pretty satisfied despite the fact that we have come in flat despite all of those production stoppages," CEO Stephen Binnie said in an inter...
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