JOHANNESBURG (News release) -- Sappi announced Nov. 10 that it plans to convert its PM2 machine at its mill in Somerset, Maine.

In an earnings report news release, Sappi said demand for packaging and speciality papers in North America is particularly robust and our customers are actively seeking to increase their volumes with Sappi.

The Board has therefore approved a US$418 million investment at Somerset to convert PM2 from coated woodfree graphic paper to solid bleached sulphate board (SBS).

The machine capacity will also be increased during the conversion from 240 000 tons to 470 000 tons per annum.

The project is expected to be completed in early 2025 and will be funded from free cash flow from operations taking into account our net debt target of approximately US$1 billion.

The capital expenditure will be phased over three years with the majority of the spend taking place in FY2024 and FY2025.

This investment is fully aligned with our Thrive25 strategic focus to reduce our exposure to graphic paper and transition our portfolio to packaging and speciality papers, pulp and biomaterials.