Sappi, led by South African exec. Nkululeko Sowazi, sells Belgian assets for $54.6 million

Omokolade Ajayi -

Key Point

  • South African executive Nkululeko Sowazi-led Sappi exits graphic paper, sells Lanaken mill to UTB for €50 million ($54.6 million).
  • Nkululeko Sowazi, Sappi’s chairman, prioritizes packaging over declining graphic paper markets.
  • Mill closure and sale mark a strategic shift under Sowazi, focusing Sappi on growth areas.

Sappi Limited, a leading global pulp and paper producer led by South African business executive Nkululeko Sowazi, has signed an agreement to sell its land and assets in Lanaken, Belgium, to UTB Waalwijk B.V. (UTB), a privately held Dutch company specializing in industrial property conversions, for €50 million ($54.6 million).

The sale follows Sappi’s announcement in November 2023 to reduce graphic paper production capacity in Europe, which included the initiation of a consultation process to close the Sappi Lanaken mill. The consultation process concluded successfully, and production at the mill ceased at the end of December 2023.

Sappi finalizes mill closure, announces sale to UTB

After completing the mill closure, Sappi said it entered into an agreement to optimize the value of its Belgian assets. UTB, with its expertise in industrial property conversions, is well-suited for this project, according to the company.

Under the terms of the agreement, UTB will acquire all shares in Sappi Lanaken N.V. and its associated assets for €50 million ($54.6 million). Of this amount, €40 million ($43.7 million) will be paid in cash. The transaction is unconditional and is expected to close in October 2024.

Nkululeko Sowazi takes helm at Sappi as paper industry faces challenges

Sappi Limited, founded in 1936 as South African Pulp and Paper Industries Limited, has become a major player in the global pulp and paper industry. Nkululeko Sowazi was appointed Chairman in November 2023, marking a new chapter for the company as it navigates a challenging market environment.

Sowazi, a prominent South African businessman, brings a wealth of experience across various sectors, including mining, real estate, technology, infrastructure, and finance. His leadership roles in companies like Bud Chemicals & Minerals, Synchem, Inc., and Tiso Investment Holdings Pty Ltd., alongside his contributions to economic growth initiatives, demonstrate his extensive expertise and leadership capabilities.

Sappi shifts gears: Mill sale signals strategic shift under new leadership

Since taking over from Nigel Rudd on February 8, 2024, Sowazi has focused on expanding Sappi’s packaging and specialty papers capacity while reducing exposure to declining graphic paper markets.

The sale of the Sappi Lanaken mill marks the first of such transactions under Sowazi’s leadership and reflects his commitment to steering the company towards a successful turnaround, aligning Sappi’s goals with the evolving global market landscape.