Wrap Text
Sappi Enters Chinese Market Through Joint Venture With Shandong Chenming Paper
Holdings Limited
Sappi Limited
(Registration number 1936/008963/06)
(Incorporated in the Republic of South Africa)
Share code: SAP ISIN: ZAE000006284
("Sappi" or the "Company")
Press Release
Johannesburg, South Africa, 28 October 2004
SAPPI ENTERS CHINESE MARKET THROUGH JOINT VENTURE WITH SHANDONG CHENMING PAPER
HOLDINGS LIMITED
Sappi Limited ("Sappi"), the world leader in coated fine paper, announced today
that it has reached an agreement to acquire 34% of Jiangxi Chenming Paper
Company Limited ("Jiangxi Chenming") in a joint venture with Shandong Chenming
Paper Holdings Limited ("Shandong Chenming") (47.2%), together with Jiangxi
Paper Industry Company Limited (3.8%), Shinmoorim Paper Manufacturing Company
Limited ("Shinmoorim") of South Korea (7.5%), and the International Finance
Corporation ("IFC") (7.5%). The transaction is subject to customary regulatory
approvals.
Sappi"s equity contribution will be approximately US$60 million.
Jiangxi Chenming is constructing a 350,000-ton per year light-weight coated
paper machine, together with a bleached thermo mechanical pulp (BTMP) mill and
deinking plant and ancillary power plant and transportation infrastructure in
Nanchang, the capital of Jiangxi Province which is located in southeast China.
The total cost of the project is an estimated US$487 million and construction is
well advanced with the mill scheduled to start delivering paper in the first
half of 2005. The mill is the sole asset of the company.
The IFC has been mandated to arrange the debt financing for the project, which
is without recourse to Sappi. The IFC will hold 7.5% of the equity and has also
approved US$60 million in long-term debt for its own account.
Sappi will nominate the chief financial officer of Jiangxi Chenming.
Shandong Chenming is a leading Chinese paper producer and has an annual paper
production capacity of approximately 1.4 million tons in China. Shinmoorim is a
leading Korean fine paper manufacturer with an annual paper production capacity
of approximately 500,000 tons.
Commenting on the transaction, Jonathan Leslie, Chief Executive Officer of
Sappi, said, "This is our first manufacturing investment in Asia and we are
delighted to be teaming up with high calibre partners."
"There is a good strategic fit with the rest of our coated paper business and
this investment extends our manufacturing base from a geographic and product
perspective."
"Sappi will now have coated paper manufacturing capacity on four continents,
further reinforcing our position as a leading global coated paper producer."
"We look forward to a close and fruitful relationship with our new partners."
ENDS
Certain statements in this release that are neither reported financial results
nor other historical information, are forward-looking statements, including but
not limited to statements that are predictions of or indicate future earnings,
savings, synergies, events, trends, plans or objectives. Undue reliance should
not be placed on such statements because, by their nature, they are subject to
known and unknown risks and uncertainties and can be affected by other factors,
that could cause actual results and company plans and objectives to differ
materially from those expressed or implied in the forward-looking statements (or
from past results). Such risks, uncertainties and factors include, but are not
limited to the highly cyclical nature of the pulp and paper industry (and the
factors that contribute to such cyclicality, such as levels of demand,
production capacity, production and pricing), adverse changes in the markets for
the group"s products, consequences of substantial leverage, changing regulatory
requirements, unanticipated production disruptions, economic and political
conditions in international markets, the impact of investments, acquisitions and
dispositions (including related financing), any delays, unexpected costs or
other problems experienced with integrating acquisitions and achieving expected
savings and synergies and currency fluctuations. The company undertakes no
obligation to publicly update or revise any of these forward-looking statements,
whether to reflect new information or future events or circumstances or
otherwise.
NOTE TO EDITORS:
About Shandong Chenming
Shandong Chenming is a leading Chinese paper company. Its A and B shares are
listed on the Shenzhen Stock Exchange. Sales (2003) US$761 million; total
assets (2003) US$1,2 billion; operating profit (2003) US$123 million.
www.chenmingpaper.com
About Shinmoorim
Shinmoorim is a leading coated paper manufacturer in Korea. Its shares are
listed on the Seoul Stock Exchange. Sales (2003) US$340 million; total assets
(2003) US$387 million; operating profit (2003) US$29 million. www.moorim.co.kr
About the IFC
The IFC is the private sector investment institution of the World Bank Group
(IBRD). www.ifc.org
About Sappi
Sappi is the world"s leading producer of coated fine paper (which is used in
high quality publications such as annual reports, catalogues, brochures and
magazines) and has leading market shares in North America, Europe and Africa. It
is also the largest producer of chemical cellulose pulp (dissolving pulp) in the
world (used typically in the manufacture of viscose fibres). Sales (2003)
US$4,299 billion; total assets (2003) US$5,835 billion; operating profit (2003)
US$286 million.
Sappi is listed on the Johannesburg Securities Exchange (JSE) under the symbol
SAP and on the New York Stock Exchange (NYSE) under the symbol SPP.
www.sappi.com
Financial adviser
Morgan Stanley South Africa (Proprietary) Limited
For further information:
Robert Hope
Group Head Strategic Development
Sappi Limited
Tel +27 (0)11 407 8492
Robert.Hope@sappi.com
Andre Oberholzer
Group Head Corporate Affairs
Tel +27 (0)11 407 8044
Fax +27 (0)11 403 8236
Mobile + 27 (0)83 235 2973
Andre.Oberholzer@sappi.com
Date: 28/10/2004 08:00:09 AM Supplied by www.sharenet.co.za
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