Borregaard — Environmental & Social Information 2015

Jul 7, 2015

Borregaard: Borregaard and Sappi announce 20,000 tonnes capacity expansion at lignin joint venture in South Africa

Borregaard: Borregaard and Sappi announce 20,000 tonnes capacity expansion at lignin joint venture in South Africa

Borregaard and Sappi have decided to increase the lignin production capacity by

20,000 tonnes at LignoTech South Africa. The added volume will be marketed to

the joint venture company's existing applications and geographical markets. The

investment by LignoTech is estimated at ZAR 105 million (approx. NOK 70

million), and the project is expected to be completed in 2017.

Commenting on the decision, Per Arthur Sørlie, President and CEO of Borregaard

said "It is a strategic priority for Borregaard to grow our lignin business.

This investment will strengthen LignoTech South Africa's competitive position,

and improve our offering to key markets in Asia, The Middle East and Africa."

Steve Binnie, CEO of Sappi Limited, said "Looking to the future, Sappi is

targeting strong growth from new business opportunities related to energy,

nanocellulose and bio products including lignin and sugars. This expansion is an

important vote of confidence in our joint venture with Borregaard and the global

competitiveness of South Africa-based LignoTech."

LignoTech South Africa is a joint venture for the manufacture of lignin products

owned by Borregaard (50%) and Sappi (50%). The company/ plant was established in

1997 in KwaZulu Natal and the capacity has been gradually expanded over time.

The new investment will increase the installed capacity to approximately

180 000 metric tonnes dry substance per year. Borregaard provides the joint

venture with sales and marketing functions in overseas export markets, in

addition to technology, research and development functions. Sappi supplies

lignin raw material and utilities from Sappi's Saiccor Mill.

The products from LignoTech South Africa goes into a wide range of applications

such as industrial dust control, concrete admixtures, feed and agrochemicals.

Borregaard (BRG) operates the world's most advanced biorefinery. By using

natural, sustainable raw materials, Borregaard produces advanced and

environmentally friendly biochemicals, biomaterials and bioethanol that replace

oil-based products. The Borregaard Group has 1080 employees in 16 countries and

a turnover in 2014 of approx. NOK 4 billion (USD 500 million) with sales to

close to 100 countries worldwide. The lignin business constitutes close to 50%

of the Group's turnover with plants in 7 countries.

Sappi (SAP) is a global company focused on dissolving wood pulp, paper-based

solutions for printing, packaging and speciality uses  as well as business

opportunities in adjacent fields. Headquartered in Johannesburg, South Africa,

with over 13,000 employees and manufacturing operations on three continents in

seven countries, it serves a direct and indirect customer base in 161 countries

and has group sales of US$6 billion.

Contact

IR Director, Jørn Syvertsen, +47 958 36 335

This information is subject to the disclosure requirements pursuant to Section

5-12 of the Norwegian Securities Trading Act.

[HUG#1934658]