Reference is made to the stock exchange notice dated 2 April 2020 regarding interruption of lignin raw material supply to LignoTech South Africa.

The calcium sulphite line at Sappi’s Saiccor dissolving pulp mill is expected to be shut down for an extended period of time. As a consequence, the Board of LignoTech South Africa has today decided to mothball the lignin plant and terminate commercial agreements with third parties. A process will be initiated to consult with employees and representative trade unions in order to resolve the situation.

LignoTech South Africa, located in KwaZulu Natal, was established in 1997 as a 50/50 joint venture owned by Borregaard and Sappi. The company employs approximately 100 persons. Borregaard’s book value of the joint venture in South Africa was NOK 99 million at the end of 2019, and the share of net profit after tax was NOK 22 million last year.

As a result of the discontinuation of operations in South Africa for an undefined period, the sales volume for lignin based products reported by Borregaard, including 100% of the volume from the joint venture, will be reduced. For 2020, the total sales volume is expected to be 10-15% lower than in 2019.

Sarpsborg, 8 May 2020

Contact:
Jørn Syvertsen, Director Investor Relations, +47 958 36 335

This information is subject to the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act.