A paper mill in northern Ontario will begin winding down operations after failing to secure immediate financial support from the federal government, the company announced Monday. Kap Paper said it has received $50 million in loans from the Ontario government, which helped provide short-term stability. It said it had approached Ottawa for funding, but the timing "doesn't appear to be aligning" for a solution to keep the Kapuskasing mill open. A spokesperson for Kap Paper said about 420 people are employed directly through the company and a total of 2,500 jobs in the region depend on its operation. The provincial government said it has provided Kap Paper with millions to help cover operating expenses and is "disappointed" that the federal government has failed to join in providing immediate support.

Hesperaloe is a desert plant native to Arizona, California, and Sonora, Mexico. Its long, slender fibers may allow it to provide strength similar to northern softwood pulp while maintaining very low fiber coarseness. The plant also grows with very little water, particularly compared with cotton, one of the thirstiest commercial crops. Its low lignin content may make pulping easier and less capital-intensive. As a result, Hesperaloe is a candidate for simpler chemical-mechanical processes that are also being explored for other non-wood fibers. The idea itself is not new. Hesperaloe first appeared in the patent literature in a 1993 James River (Georgia-Pacific) patent, followed by a 1999 pulping process developed by Hurter Consulting and North Carolina State University. What has changed is the scale of the effort to determine whether the fiber can become commercially viable. The opportunity is significant, but so is the risk. Developing Hesperaloe into a commercially viable fiber source will require breakthroughs in agriculture, processing, and supply-chain development. Kimberly-Clark’s recently announced $100 million pilot plant in Yuma, Arizona, suggests the company believes the potential is worth exploring.

The persistent global economic downturn is proving to be much tougher than anticipated with depressed markets, geopolitical instability and weak economic growth combining to put significant pressure on Sappi, particularly in Europe. In response we announced on 10 October 2023 the start of a consultation process on the possible closure of Sappi Lanaken Mill. We have completed this process and agreed on the social plan for the employees. Production of paper ended in December 2023. The closure of the site should be completed during the second calendar quarter of 2024. Details regarding the financial impact once all closure elements are taken into account will be provided during the first quarter financial results announcement.