Submitted: The Two Sides Team March 12, 2013

A holistic approach to sustainability drives Sappi Fine Paper North America.
March 12, 2013

by DeAnne Toto

For many companies, sustainability extends beyond using recycled
content and encouraging the recycling of their products at the end of
their lives. Boston-based Sappi Fine Paper North America is one such
company. According to the company’s website, its sustainability goals
are divided into three areas—people, planet and prosperity. Examples of a
goal from each of these categories include:

• Enhancing employees’ job performance and managerial skills by
  offering training and education at an average rate of 75 hours per
  employee annually;
• Reducing fiber and papermaking raw material waste by 10 percent; and
• Achieving or exceeding an annual 12 percent return on net assets for Sappi Fine Paper North America.

A Balanced Approach

In working toward its sustainability goals, Sappi, a manufacturer of
coated fine and release papers and market pulp, has found it necessary
to balance the factors associated with using recycled fiber in its
coated premium printing papers, says Laura M. Thompson, director of
technical marketing and sustainable development. “Sustainability is a
core part of our overall strategy,” she says. “It’s not a program of the
month. It is integral to our business and involves making good business
decisions that are good for the environment and good for our
stakeholders.”

While Sappi advocates for paper recovery and recycling, Thompson
says, “We share a unique perspective in trying to educate paper buyers
about some of the trade-offs for using recycled fiber in coated premium
printing papers. Once paper has been recovered, it is important to put
the fiber to its best use, giving consideration for both economic and
environmental impacts. Ultimately, recycled fiber should be used in
products where it displaces a higher manufacturing footprint.” This best
use is often in packaging grades, she says, because less processing is
required and higher yield is achieved.

Sappi purchases deinked pulp (DIP), which is primarily made from
postconsumer sources, such as sorted office paper (SOP) and white
ledger. “For fiscal year 2012, Sappi Fine Paper North America sold
approximately 1.4 million tons of paper and pulp products,” Thompson
says. “In terms of yearly fiber consumption in tons, during fiscal year
2012, we used 40,050 air-dried short tons of deinked pulp, which is the
combined total for our Somerset and Cloquet facilities.” Therefore, DIP
accounted for nearly 4 percent of the company’s raw material in 2012.

She says Sappi has found that using DIP or recycled fiber in its
paper production actually increases the carbon footprint of its
products. “We have been very transparent about this issue,” Thompson
says, “and are using life-cycle analysis to help bring facts and science
to the fore of this debate in an effort to educate stakeholders about
the ‘best use’ of recycled fiber.”

Thompson adds that the company was happy to see the recently revised
Federal Trade Commission Green Guides, which states, “Claiming ‘green,
made with recycled content’ may be deceptive if the environmental costs
of using recycled content outweigh the environmental benefits of using
it.”

Incorporating recycled content in its products also can come at a
financial cost for Sappi, according to Thompson. “Many of our customers
think products with recycled fiber ought to be less expensive than
products made with 100-percent-virgin fiber. However, the cost of
recycled fiber continues to exceed the cost of manufacturing virgin
fiber at our integrated mills and is among the most expensive market
pulps we purchase.”

Sappi’s consumption of DIP is driven by customer preference. But
Thompson says the company’s customers are shifting away from demanding
recycled content in printing and writing paper and instead specifying
certified forest fiber. She adds that Sappi’s clients are taking a more
holistic view toward the manufacturing footprint of their suppliers.
“This is a good thing and demonstrates that customers are paying
attention to both the economic and environmental benefits when choosing
their paper,” Thompson says.

“Recycling typically uses less energy than raw material pulping.
However, the production of recycled fiber still consumes energy, much of
which is based on fossil fuels,” she continues. “When looking at
emissions data for virgin pulp made at integrated kraft (free sheet)
mills, the carbon footprint of virgin fiber can be significantly lower
because kraft mills have high levels of renewable energy (in the form of
black liquor, a wood byproduct from pulp making that paper mills burn
to generate electricity).” Thompson adds, “Generally speaking, improving
profitability and creating a more sustainable future are directly
entwined.”

A closer look at Sappi Fine Paper North America’s operations offers
additional insight into the company’s position on the use of recycled
fiber.

Areas of Expertise

Sappi Fine Paper North America traces its roots back to 1854 and the
S.D. Warren Co., owner and operator of a Westbrook, Maine, paper mill
that was acquired by the company in 1995. Sappi Fine Paper North America
is a subsidiary of Sappi Ltd., headquartered in Johannesburg, South
Africa. Sappi Ltd. employs more than 14,000 people and has manufacturing
operations on three continents in seven countries.

“Our company is founded on a legacy of innovation and quality,”
Thompson says, pointing to a number of “firsts” Sappi has achieved in
coating and specialty mill technology. “We have a solid track record of
pioneering industry-first innovations, such as the first paper coated
and calendered on two sides and the first dull coated paper, among many
others.”

Sappi is the third-largest seller of hardwood pulp in North America,
Thompson says, with three mills in the Northeast and North-Central
United States.

Sappi’s Somerset mill in Skowhegan, Maine, produces papers such as
Somerset, Opus and Flo used primarily for high-end magazines, books and
catalogs, Thompson says. It also manufactures coated free-sheet graphic
paper, grease-proof packaging paper and bleached chemical pulp.

The Westbrook mill produces specialty release papers and films used
in synthetic fabrics in the automotive, fashion and engineering films
industries, including the Ultracast brand. “Sappi’s release papers
provide the surface aesthetics for synthetic fabrics used in footwear,
clothing, upholstery and accessories, as well as the textures for
decorative laminates found in kitchens, baths, flooring and other
decorative surfaces,” Thompson says.

Sappi’s Cloquet mill in Cloquet, Minn., specializes in coated free
sheet graphic paper and bleached chemical pulp. “[The] Cloquet mill
produces some of our most requested coated fine papers, including McCoy,
Opus and Flo,” she adds.

The company operates 17 sales sites in the U.S., a research facility
in Westbrook, a service center in South Portland, Maine, and a sheeting
facility in Allentown, Pa., employing 2,280 people total.

Thompson says Sappi has three business units: coated fine papers,
release papers and pulp. However, Sappi will be transitioning from kraft
pulp at its Cloquet mill to specialized cellulose, also known as
dissolving pulp, in May 2013, she adds.

Thompson says Sappi is excited about this transition, which will
allow the company to supply the textile industry with specialized
cellulose that will be converted into viscose fibers, which offers
considerable growth potential. “We are excited about the growth in those
markets and that is why we are doing this major conversion,” she says.
Thompson adds that by transitioning to specialized cellulose, Sappi will
be able to produce a product with more added value than kraft pulp,
which also offers higher margins.

Sappi is investing $170 million in its Cloquet mill to make the
transition to produce cellulose. “The plans include modification to the
mill’s woodyard, digesters, bleaching, washing, screening and chemical
recovery system,” Thompson says. “As part of Sappi’s ongoing commitment
to the coated paper business, the mill’s paper machines and stock
preparation areas are also being modified to better handle more
purchased (dry) fiber.”

Toward a Sustainable Future

“Now more than ever, we are making strategic decisions to move into
areas of greater opportunity and to focus on long-term, sustainable
growth,” Thompson says. “Sappi Ltd. is currently the largest global
producer of specialized cellulose, and with the major $170 million
investment in our Cloquet mill conversion to be completed in 2013, we
expect to produce an additional 330,000 metric tons total per year.”

She adds that the company recently invested $13 million to rebuild
one of the machines at its Somerset plant and approved a $2.5 million
project to upgrade the No. 20 coater for the Classics release line at
its Westbrook plant.

“These capital projects will allow for increased overall returns of
our North American region by providing opportunities for further
reinvestment in our coated, release and specialized cellulose business,”
Thompson says.

Wider industry initiatives also have Thompson excited about the future of the paper industry.

“I am excited about the pending Paper Check-Off program, which is an
industry-wide promotion for the forest products industry proposed by the
USDA (U.S. Department of Agriculture),” she says. “The collaborative
marketing campaign will help to remind people about many of the
beneficial uses of paper as well as the strong sustainability positions
within our industry.”

In terms of ongoing challenges to the paper industry, she mentions
increasing recovery in segments such as cartons or polycoated papers.
“While they are approaching the industry goal of 70 percent recovery,”
Thompson says, “paper is still the major contributor to the overall
volume of landfill waste. It will take a portfolio of solutions to
minimize materials sent to landfill, ranging from composting of towel
and food-service grades to incineration with energy recovery for other
difficult-to-recycle grades.”

Thompson also says she sees potential for extended producer
responsibility goals, which she describes as “arguably unjustified,” to
burden paper recovery systems. She adds, “Paper has the highest recovery
rates of any basic material, and it would be beneficial to see
voluntary market-based solutions emerge rather than resort to EPR.”

In terms of sustainably incorporated recycled content into paper
production, Thompson says this hinges on using the material in the right
locations and in the right grades. “As an industry, most recovered
paper is rightfully used as a raw material in packaging grades, such as
carton board and paper board, because the manufacturing of these grades
does not typically involve deinking and/or achieves a more
cost-effective use of recycled fiber at a higher yield and does not
typically involve deinking and/or bleaching.”

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