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Delivering on our strategy and 2020Vision

View enlarged Delivering on our strategy and 2020Vision

Delivering on our strategy and 2020Vision

CASE STUDY

Lowering the costs of pulp: Matane Mill

We completed the acquisition of Matane Mill shortly after year-end. Located in Matane, Quebec, the mill currently has 129 employees and capacity of 270,000 tpa of aspen and maple high-yield pulp. A key advantage is that it is situated 5 km away from a port.

  • The acquisition supports our strategy and 2020Vision cost advantages and growth in higher margin packaging and speciality paper. It will also increase pulp integration by supplying high-yield pulp to our US and European packaging operations, enabling us to secure supply of a raw material critical to product quality
  • Reduce input pricing and volatility in profitability
  • Avoid higher capital cost of internal high-yield pulp capacity.

High-yield pulp is used in a variety of applications: providing higher bulk, opacity and stiffness in the final product, with demand primarily driven by the packaging board and printing paper markets. Globally, the high-yield pulp market is some 5 million tons, 40% of which is produced in Canada due to lower fibre and energy costs.

Payment of the adjusted net acquisition price of approximately US$158 million will be made in the first quarter of FY20, funded via a new term loan.


 

CASE STUDY

Generating savings and environmental benefits at Saiccor Mill

Project Vulindlela, which was around 40% complete at year-end, will boost Saiccor Mill's production of DWP to 890 000 tpa, taking it to about 10% of the global market. Cost savings attributable to Vulindlela are expected to be at least ZAR300 million a year.

The project will also deliver significant environmental benefits which include:

  • Coal consumption reducing by over 130 000 tpa, which means fossil carbon emissions will be halved
  • Gaseous emissions decreasing by approximately 40%
  • Water consumption being reduced by 5%
  • Water use efficiency increasing by 17%
  • Energy efficiency being improved by 10% and renewable-energy use increasing by 20%