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June 22, 2018

Sappi North America: Maine mills are key to sustainable business strategy

Courtesy / Sappi North America
Courtesy / Sappi North America
Jennifer Miller, chief business sustainability officer for Boston-based Sappi North America, joined members of the company's Sustainability Customer Council in a tour of the Falmouth Town Forest last October.

Sappi North America's paper mills in Westbrook and Skowhegan are integral contributors to the company's industry-leading sustainability performance, which received a "gold recognition level" rating from the independent rating agency EcoVadis.

That's the conclusion of Jennifer Miller, chief business sustainability officer for Boston-based Sappi North America, who cites a number of sustainability goals the two mills have achieved that were noted in the company's 2017 sustainability report

The EcoVadis rating, which is based on 21 metrics involving environmental, fair labor, fair business, supply chain and ethical practices, puts Sappi among the top 4% of roughly 30,000 companies surveyed annually.

"To us it's a very solid report card on our world-class business plan," said Miller.

Miller said EcoVadis' evidence-based rating process is aligned with international standards, including the United Nations Global Compact, the Global Reporting Initiative and ISO 26000.

In a telephone interview with Mainebiz, Miller said sustainability is at the core of Sappi's business strategy, both in the United States and globally. In her role as chief sustainability officer for Sappi North America, Miller said she makes sure the company's business practices are "doing right" in relation to the environment, employees and customers.

She also looks closely at the Sappi North America's business model — which includes deep dives into earnings reports and closely following market trends and global economics with an eye toward identifying growth opportunities for its three mills that employ 2,100 workers in the U.S. — to make sure it advances goals laid out in the 2020 Vision established in 2015 that is structured around concrete, measurable initiatives with clear baselines for performance.

"I don't get stuck in the past," Miller said, noting that she works closely with Sappi North America President and CEO Mark Gardner, a colleague from Maine who she's worked with for more than 20 years.

"We know our strength is in our diversification strategies" involving pulp, coated fine paper, release papers and packaging, she added. "We are a global player in all four of those businesses."

2017 sustainability report

Courtesy / Sappi North America
Courtesy / Sappi North America
The wood yard at Sappi's Somerset Mill in Skowhegan, shown before its $25 million upgrade.

Miller said Sappi's mills in Westbrook and Skowhegan play a big role in that diversification strategy, which is borne out in the company's recently released 2017 sustainability report. Among the overall highlights:

  • Sappi North America achieved a 38% improvement in safety performance across all of its operations, as measured by "lost time frequency rate," an achievement that puts the company well within the top quartile of all U.S. paper mills. Its Cloquet Mill in Minnesota experienced over 2 million hours without a loss time injury, receiving a 2017 Sustainability Award for Safety from AF&PA for this achievement.
  • Sappi North America is an industry leader in sustaining a low carbon footprint, with approximately 80% of its energy use from renewable or alternative fuels.
  • 100% of its wood fiber is procured in accordance with the Sustainability Forestry Initiative's fiber sourcing standard as well as the Forest Stewardship Council's controlled wood standard, with nearly 54% third party certified.

Specific sustainability milestones cited for the Sappi mills in Westbrook and Skowhegan and its shared service center in South Portland include:

  • Investments of $25 million in the Skowhegan Somerset Mill's wood yard, to optimize its efficiency and reduce costs;, and $165 million to rebuild the mill's Paper Machine No. 1, which expands its manufacturing capabilities and flexibility to include a variety of consumer packaging products.
  • Exceeded the company-wide goal of offering 60 training hours per year per employee, achieving a company-wide average of 80 hours of training per employee; at Somerset, the training program included both hourly and salaried employees to get them familiar with new equipment, new products and customer expectations that will result from the addition of packaging products at the mill.
  • Market introduction of first-of-its-kind Neoterix ST, a casting and release paper developed at the Westbrook mill that's inspired by the texture of shark skin, which creates surfaces that inhibit bacterial growth without the use of toxic additives or chemicals. Sappi has an exclusive worldwide license agreement with Sharklet Technologies to manufacture the product in Westbrook for global distribution. The product won an "intelligent material and design award" from Interzum in 2017.
  • Reduced fuel oil consumption at Somerset from 19% in 2007 to slightly more than 1% in 2017, resulting in a 22% reduction in greenhouse gas emissions. At the Westbrook mill, 84% of energy consumption is renewable, with less than 2% being fuel oil, 14% coal and 0.6% natural gas.
  • Diverted 45,700 pounds of organic waste at its South Portland shared service center to compost, instead of sending it to a landfill, by working with Garbage to Garden.
  • Partnered with InterMed to develop an ergonomics and injury prevention program at the Westbrook mill.

Innovation is key to sustaining growth

Courtesy / Sappi North America
Courtesy / Sappi North America
Neoterix St., a casting and release paper made at Sappi's Westbrook mill, was inspired by the texture of shark skin.

Miller said Sappi's investments at the Somerset Mill are driven by the recognition that diversification is essential to complement the mill's core product of coated fine papers used in premium magazines, catalogs, books and high-end print advertising.

"We are constantly looking at how to refresh our product lines and innovate," she said, noting that the $165 million investment in Paper Machine No. 1 gives it the capability of making both high-end papers as well as paper-based packaging. That dual capability, she said, enables Sappi to pursue growth opportunities in the packaging sector while continuing to maintain strong market share in its legacy high-end papers.

"It's a significant investment," she said.

Innovation plays a similarly key role at the Westbrook mill, which focuses on manufacturing release papers for the automotive, fashion and engineered films industries, including synthetic fabrics used in footwear, clothing, upholstery and accessories, as well as the textures for decorative laminates found in kitchens, baths, flooring and other decorative surfaces for a broad array of end-users.

"We are constantly innovating," she said. "We have a substantial R&D center in Westbrook" that includes an "Exciter" program focused on the development of "breakthrough technology" products such as Neoterix ST.

More than 25% of Sappi's R&D spending worldwide focuses on those "Exciter" breakthroughs, she said.

"We've been proud of our success," Miller said. "You have to be smart and savvy and keep refining what you do. That's why we invest in our Exciter technologies."

Looking ahead, Miller said the Maine mills are important contributors to their parent company's overall success, which beat second quarter 2018 expectations in reporting EBITDA excluding special items of $211 million U.S. (compared to $208 million U.S. for the prior year) and profit for the period of $102 million (compared to $88 million in Q2 2017).

"We appreciate the skilled workforce in Maine, the competitive sites, the resource of Maine's forestland," Miller said. "We're continuing to develop a blueprint for further growth, leveraging investments we've made at our mills in Maine. It helps keep our costs competitive."

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