October 12 2011 at 09:35am

Construction of the R2-billion Pulp United pulping plant in Richards Bay is expected to start in the first half of next year.

Pulp United general manager David Lemmer said the sponsors, NCT Forestry, had been working on the proposed development for the past six years. In the past two years, they had made great progress in structuring and refining the project.

"Pulp United have purchased land within the Richards Bay industrial development zone (IDZ) and are finalising the financial package of debt and equity financing. We are proud to have the support of the Industrial Development Corporation as well as that of a large local BEE engineering group and a Swedish International Africa development fund. We are also putting together a BEE trust for participation in the project," he said.

Lemmer said construction of the plant would take two years because it included structures more than 30m high.

"Although a large international company will be involved in the construction process there will be a large local component as well... We will be involving our equity players. NCT Forestry is one of our sponsors and timber suppliers while our local BEE engineering partners will be involved in the construction project."

Lemmer said it was estimated that more than R1bn would be spent locally on the construction.
In the longer term, with an anticipated turnover of R1bn annually, he said the development would have a significant impact on the province and the country through exports.

"Between 750 and 1 000 jobs would be created during the construction phase. While the direct headcount to be employed at the plant may not be high, there would be indirect employment opportunities created through NCT Forestry, which is a committed community development co-operative. There will also be indirect employment in the harbour and in the supply of engineering components and services," Lemmer said.

"We have full environmental compliance through our environmental impact assessment... We recently applied for an extension, which was granted, and are in contact with the Environmental Affairs Department on a regular basis," he said.

The plant would produce a high performance mechanical pulp as opposed to the chemical pulp produced by Mondi and Sappi, Lemmer said.

"Ours is a speciality additive to their product to produce a highly specialised paper. We are not competitors, but are complementary to these companies.

"Our product is a niche international product which makes up less than five percent of internationally market traded pulp - that is why we have embarked on the project," said Lemmer.

Richards Bay IDZ CEO Ike Nxedlana said Pulp United's decision to go ahead with the project was excellent news.

"The arrival of Pulp United means we are starting to achieve our mandate of job creation. Many people thought it would not materialise because it has been on the cards for a long time, but now this will play a prominent role in attracting other investors when they see the likes of Pulp United establishing themselves here.

"We see them as pioneers, along with Tata Steel who have been here for some time already. This project augurs well for the IDZ," said Nxedlana.

Source: The Mercury (http://www.iol.co.za/mercury/finally-it-s-all-systems-go-for-r2bn-pulping-plant-1.1155481)