Sappi Ltd.

Company Snapshot: 

Sappi Ltd., a global player in the pulp and paper industry, is headquartered in Johannesburg, South Africa. Sappi Ltd is comprised of two divisions: Sappi Fine Paper (domiciled in London), and Sappi Forest Products (domiciled in Johannesburg), and employs some 16,000 people in Southern Africa, North America, and Europe; it bills itself as "the world's leading producer of coated fine paper and chemical cellulose" on its corporate website. Founded in December 1936, as South African Pulp and Paper Industries Limited, Sappi Ltd began its most aggressive acquisition phase in the 1980s, acquiring companies such as Novobord (South Africa, sold to the Portugal-based Sonae Group in 2004), Timberboard (South Africa, later merged with Novoboard), Usutu Pulp Company (Swaziland), Saiccor (South Africa), Speciality Pulp Services (Hong Kong), S D Warren (USA), Hannover Papier (Germany), five fine paper mills in the United Kingdom, and a 34% equity stake in the Shanghai-based Jiangxi Chenming joint venture, to name a number of them. Sappi has won praise from some environmental organizations, for example, the WorldWide Fund for Nature (WWF) has a partnership with Sappi in South Africa, called the Sappi WWF TreeRoutes Partnership. It has also come under criticism, however, particularly in relation to its Usutu Pulp Mill in Bhunya, Swaziland, where the locally-based Yonge Nawe Environmental Action Group has documented numerous negative health and ecological impacts resulting from its operations.

Number of employees worldwide: 
16,000
Chief executive officer: 
Ralph Boëttger
Net Income: 
$202 million
Total revenue: 
$5.3 billion (Sappi Ltd's fiscal year ends on September 30)
Corporate accountability
Environment and product safety: 

The Usutu Pulp Mill, based in Bhunya, Swaziland, is situated on the banks of the Lusutfu River (into which it directly discharges waste) and processes the wood produced on Sappi Ltd monoculture plantations surrounding the mill into unbleached kraft pulp. Most of the 230,000 tons of annual production is exported to Southeast Asia via an agent in Hong Kong, and requires 1 million tons of good quality softwood as feedstock. The Usutu mill and surrounding plantations employ roughly 3,000 people.

According to Yonge Nawe Environmental Action Group's State of the Environment Report 2005, kraft pulping, also known as sulphate, or chemical pulping, uses sulpher to get fiber out of softwood. The sulphur chemicals account for the rotten egg smell of many pulp mills, and the resulting emissions damage both human health and the environment. Furthermore, kraft pulping is wasteful, utilizing less than 50 percent of the tree, and the waste ends up as sludge that is burned, spread on land, or landfilled. Kraft pulp is usually dark and is often bleached with chlorine. Pulp mills are large sources of air pollutants, such as carbon dioxide, nitrous oxides, sulphur dioxides, carbon monoxides, and particulate matter. These emissions contribute to ozone warnings, acid rain, and global warming. Air discharges from pulp mills can cause respiratory problems and also contain hormone-disrupting and carcinogenic chemicals such as chlorinated phenols, polycyclic aromatic hydrocarbons (PAHs), volatile organic compounds (VOCs), airborne dioxins, and furans.

Yonge Nawe has also conducted several field visits to communities living in the area surrounding the Usutu Pulp Mill, to document community member claims of health and environmental impacts from the mill's emissions. Community concerns include:

  • Local residents worry about the effect of the smoke from the plant on their health.
  • Frequent health complaints include asthma, chest pains, bronchitis and hair loss.
  • Residents complain that sometimes the smoke comes in liquid form and causes a burning sensation in the eyes.
  • The corrugated iron roofs on homesteads in the valley are corroded by emissions from the plant and this has caused leakage.
  • The mill has polluted area rivers such that the fish have died and the water is not safe for human use.
  • Sappi management employees are housed at Mhlambanyatsi, 15 kilometers north of Bhunya, while the bulk of workers and their families live in cheap accommodation right next to the mill -- directly exposed to air pollutants and emissions.
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Financial information
Stock ticker symbol: 
SPP (NYSE), SAP (JSE), SAVVI (Johannesburg)
Fiscal year: 
2007
Fiscal year: 
2007
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Swaziland: The myth of sustainable timber plantations1.04 MB