Sappi plans $170 million investment in Cloquet mill to produce fiber for clothes

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Sappi paper company announced Thursday that it will stop making kraft pulp at its Cloquet mill and start making chemical cellulose that’s made into a fabric for clothing, wet wipes and other consumer products.

Sappi Limited’s board approved the $170 million investment in the Cloquet mill and hopes to begin producing chemical cellulose by 2013.

The stuff, made from the fiber of trees, will be dried and shipped to Asia, where it will be used by the burgeoning textile industry to make rayon fabrics, said Amy Olson, Sappi Fine Papers North America spokeswoman.

The announcement, from the company’s South African headquarters, came as corporate leaders announced a fourth fiscal -quarter loss due to the continued downturn in the paper industry. But the company announced the Cloquet change as part of its diversification into other products.

“This is good news for the Cloquet mill and the community because this is a very high margin business,” Olson told the News Tribune. “This keeps the Cloquet mill competitive for years to come.”

In simple terms, Olson said, the Cloquet mill “will be converting wood to a purer form of cellulose fiber. This form of wood pulp can then be further processed into viscose staple fiber to make textiles like rayon.”

Olson said rayon is in growing demand, favored over polyester for its breathability and because global cotton supplies are tightening.

The mill employs 780 workers, and that won’t change much even after the new product line is added. The Cloquet mill will no longer produce kraft pulp, the usual material paper is made from, but will continue to produce coated paper for magazines, catalogs and similar products.

“The chemical cellulose conversion project at the Cloquet Mill is consistent with our announced strategy to diversify further into this fast growing segment,” Ralph Boettger, chief executive officer of Sappi Limited, said in a statement. “The globally low cost position of Sappi’s Cloquet pulp mill will provide an attractive platform for growth with our current chemical cellulose customers as well as open up new markets to us.”

Cloquet Mayor Bruce Ahlgren said Sappi didn’t notify city officials of the plant conversion.

“All I know is what was in the press release. We don’t know what it means for employment down the line,” Ahlgren noted. “But any time a company invests that much money, it’s a good sign they are committed to that location, to that plant, well into the future.”

It’s the first cellulose plant in North America for Sappi, but the company already is the world’s largest manufacturer of chemical cellulose at plants in South Africa.

“We are excited about the new growth opportunities this investment in chemical cellulose brings to Sappi Fine Paper North America, all of our employees and the Cloquet community,” said Mark Gardner, president and chief executive officer Sappi Fine Paper North America.

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