Orkla`s chemical business Borregaard and the South African Sappi Saiccor have signed an agreement to establish a joint venture



Orkla

Orkla's chemical business Borregaard and the South African Sappi Saiccor have signed an agreement to establish a joint venture

The Norwegian Borregaard and the South African Sappi Saiccor have signed an agreement to establish a joint venture for the production of lignin based products. The operation will be located in Umkomaas, Kwazulu Natal, Republic of South Africa.

The plant will initially have an annual capacity of 55,000 tonnes of lignin products. The investment in this first step will amount approx. USD 20 million. It is the intention to expand the capacity later. The start-up of the operation is scheduled for the second half of 1998. The raw material, lignin, is the binding agent of wood, and is a by-product from pulp production. Sappi Saiccor will provide the joint venture with raw material from its 600,000 tonne sulphite pulp mill. The lignin based products are used as dispersing agents in concrete, textile dyes, pesticides, ceramics and as binding agents in briquetting, animal feed and dust suppression.

Lignin based products are one of the core business areas of Borregaard which is the world leader in this business through Borregaard LignoTech. Borregaard presently operates 11 lignin production units in Europe, America and Asia. The company also operates many sales units and two R&D centres in the USA and Norway for lignin based products and applications. The combination of Borregaard's technology for process and product development and its global market presence - and Sappi Saiccor's raw material base and experience of running operations in South Africa, will enable the establishment of a sustainable lignin operation in the southern hemisphere.

The extraction of lignin will also have a positive environmental impact by reducing emissions from the pulp mill in Umkomaas and will enable the use of renewable wood raw material for natural chemical products.

Borregaard, a member of the Orkla Group, is an international chemicals company. (The core business areas are Specialty Chemicals, Fine Chemicals and Ingredients.) Borregaard has production units and sales offices in 15 countries in Europe, America and Asia. The company has 2,700 employees and expects sales of USD 850 million in 1997.

Sappi Saiccor is part of the international pulp and paper company Sappi Limited,which employs 23,000 people and has an annual turnover of USD 4 billion.The company operates 16 pulp and paper mills in Africa, Europe and North America. Sappi Saiccor is the world's largest producer of dissolving pulp used largely for the production of viscose materials.

Ref.: Borregaard: Dag Arthur Aasbo, Manager, Communication and Public Affairs, Tel.: + 47 6911 8000, 8 June 1997

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