Sappi Advances Mill Maintenance Programme and Somerset Mill PM2 Investment Project to Strengthen Operational Performance

Sappi Limited continues to focus on strengthening operational reliability, improving manufacturing efficiency and advancing strategic investment projects across its global operations. As part of these efforts, the Group has outlined planned maintenance shutdowns at three manufacturing facilities during the first quarter of FY2027, alongside continued progress in the commercial ramp-up of its Somerset Mill Paper Machine 2 (PM2) project in the United States.

Planned Mill Maintenance Shutdowns

Sappi has scheduled maintenance shutdowns at its Cloquet, Somerset and Saiccor mills during the first quarter of FY2027. The planned maintenance activities are expected to impact earnings by approximately US$41 million.

The Cloquet Mill maintenance shutdown is expected to impact earnings by approximately US$23 million, while the Somerset Mill shutdown is expected to have an impact of US$10 million. Maintenance activities at the Saiccor Mill are expected to account for the remaining US$8 million.

These planned shutdowns form part of Sappi's ongoing efforts to maintain operational reliability, meet regulatory requirements and ensure business continuity across its manufacturing operations.

The Group has indicated that the first quarter will include significant scheduled maintenance, which, together with elevated fuel prices and higher raw material and logistics costs, is expected to place pressure on operating performance.

In addition to the planned FY2027 maintenance programme, the Saiccor Mill undertook a scheduled shutdown of one production line during the fourth quarter of FY2026, reducing earnings by approximately US$8 million. Boiler tube leaks at Ngodwana Mill also affected production during the quarter.

Somerset Mill PM2 Project Continues to Gain Momentum

Alongside its maintenance programme, Sappi continues to advance the commercial ramp-up of Paper Machine 2 (PM2) at its Somerset Mill in Maine, United States.

Known as Project Elevate, the initiative represents a US$418 million investment in rebuilding and expanding Paper Machine 2, with the objective of doubling its capacity.

During FY2026, the commercial ramp-up progressed more slowly than initially anticipated. However, focused operational interventions helped stabilise production, improve product quality and strengthen sales volumes, particularly during the second half of the financial year.

The improved operational performance enabled Somerset Mill PM2 to make an increasingly positive contribution to the Group's earnings.

The project represents an important investment in Sappi's North American packaging and speciality papers business, supporting increased paperboard production capacity and strengthening the Group's ability to serve its customers in the region.

Focus on Operational Efficiency and Long-Term Competitiveness

Sappi continues to prioritise operational improvements, cost reduction initiatives and disciplined capital allocation across its global manufacturing network.

The planned maintenance activities and continued progress at Somerset Mill reflect the Group's focus on maintaining reliable manufacturing operations while strengthening production capabilities and improving asset utilisation.

Capital expenditure for FY2027 is estimated at approximately US$240 million, with investments primarily directed towards essential maintenance, regulatory compliance, operational reliability and business continuity.

While scheduled maintenance and ongoing cost inflation are expected to affect near-term earnings, Sappi remains focused on improving its competitive cost position, strengthening operational performance and maximising the contribution of its strategic investments.