Reference is made to the stock exchange notice dated 2 April 2020 regarding
interruption of lignin raw material supply to LignoTech South Africa.
The calcium sulphite line at Sappi's Saiccor dissolving pulp mill is expected to
be shut down for an extended period of time. As a consequence, the Board of
LignoTech South Africa has today decided to mothball the lignin plant and
terminate commercial agreements with third parties. A process will be initiated
to consult with employees and representative trade unions in order to resolve
the situation.
LignoTech South Africa, located in KwaZulu Natal, was established in 1997 as a
50/50 joint venture owned by Borregaard and Sappi. The company employs
approximately 100 persons. Borregaard's book value of the joint venture in South
Africa was NOK 99 million at the end of 2019, and the share of net profit after
tax was NOK 22 million last year.
As a result of the discontinuation of operations in South Africa for an
undefined period, the sales volume for lignin based products reported by
Borregaard, including 100% of the volume from the joint venture, will be
reduced. For 2020, the total sales volume is expected to be 10-15% lower than in
2019.
Sarpsborg, 8 May 2020
Contact:
Jørn Syvertsen, Director Investor Relations, +47 958 36 335
This information is subject to the disclosure requirements pursuant to Section
5-12 of the Norwegian Securities Trading Act.