It takes nerve to embark on the radical repositioning of a business. Sappi did just that five years ago when it started a process to end its heavy reliance on printing paper by increasing the importance of chemical cellulose, or dissolving wood pulp (DWP), in its product lineup. To do so, it ramped up DWP production at its Ngodwana mill in SA and Cloquet mill in the US at a cost of US$460m. DWP is used to produce textiles, quality fabrics and rayon. Other applications include cigarette filters, pharmaceuticals, cosmetics and cellophane. Sappi had little choice in the matter. Demand for newsprint and glossy, coated paper for magazines and catalogues had been in decline for years. The strategy to increase the importance of DWP has met with great success. In Sappi’s year to September 2016, DWP contributed $294m (60%) of group operating profit of $487m, while at the earnings before interest, tax, depreciation and amortisation (Ebitda) level, its contribution was $339m (46%) of a $739m t...

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