Sappi’s R7.7-billion Project Vulindlela was among the new local investments signifying that the South African economy was on the road to recovery, President Cyril Ramaphosa said at the launch of the upgrade and expansion project on Tuesday.
The project at Sappi Saiccor in Umkomaas, collectively dubbed Project Vulindlela, included the construction of one of the world’s biggest dedicated dissolving pulp plants.
Sappi said in an earlier statement that the multi-billion rand investment, first announced in 2018, had been spurred by global demand for dissolving pulp, particularly from garment manufacturers who use it in the production of viscose, although the pulp has multiple applications including in the food and pharmaceutical sectors. The firm said the expansion project had answered Ramaphosa’s call for local firms to invest in the economy.
Ramaphosa said the completion of the project marked Sappi’s fulfilment of the commitment it had made at the first South African Investment Conference in 2018.
“We convened that first Investment Conference with the aim of raising R1.2 trillion in new investments over five years. Now, four years later, we have achieved more than R1.1 trillion worth of investment commitments,” he said.
“The realisation of Sappi’s investment here at Umkomaas sends the strongest signal that our home-grown multinationals are taking the lead in investing in our economy.”
Additional investments recently realised included the launch of the expansion of Swedish multinational Sandvik’s manufacturing facility in Gauteng, and the opening of an industry components plant run by Hesto Harnesses, a subsidiary of Metair Investments.
“There are many other such examples of the impact of our investment drive. They show that our economy is on the road to recovery,” Ramaphosa said.
He described the Sappi project as an investment in community development, the local economy, export capacity, and the industrialisation of the economy.
“These investments have been made possible thanks to the partnership between government and business to drive growth and industrial development. The opening of this expansion project is the result of hard work, persistence, corporate vision, and, above all, is a testament to the enduring commitment of companies like Sappi to South Africa and its people,” Ramaphosa said.
The plant supports beneficiation, the move towards a circular economy, and the country’s national carbon reduction goals.
“I am told that by using the best available technology, the aim is to halve CO2 fossil fuel emissions, significantly reduce plant CO2 emissions, reduce water consumption, and reduce waste to landfill from coal ash by 48%,” the president said,
Sappi uses recycled and sustainable wood sources to produce circular and innovative bio-based products. It has sourced a total of four million tons of timber worth R4.2 billion from small growers since 1995.
“The manufacturing sector is one of the key priority industries of the economy and Sappi Limited is supporting both the creation of new jobs and the protection of existing ones by innovating in its business practices,” Ramaphosa added.
The firm employs 1200 staff and 700 contractors and supports 51 000 indirect jobs.
“As one of the biggest container exporters, Sappi Limited makes an important contribution to the country’s export revenues. The success of many domestic industries in export markets demonstrates our inherent global competitiveness and the huge potential that still exists to grow these industries. However, to realise that potential we need to remove the constraints that are hampering the overall competitiveness of our manufacturing industries.”
He added that the government was forging ahead with its announced energy reforms and plans to confront challenges with rail and port operations.
“Several companies have been shortlisted to be considered as partners at the container terminals at the ports of Durban and Ngqura. Investments in port and related infrastructure to improve efficiencies will improve the competitiveness of locally manufactured products in global markets.”
Ramaphosa added that while foreign direct investment was important, the greatest demonstration of confidence was when local firms took the lead.
“The realisation of Sappi’s investment here at Umkomaas sends the strongest signal that our home-grown multinationals are taking the lead in investing in our economy. It demonstrates confidence to other potential investors that this is indeed a favourable place to invest in and to do business.”
