Sylvamo to Invest $145 Million in South Carolina Facilities

Rhea-AI Summary

Sylvamo (NYSE: SLVM) has announced a significant $145 million investment in its South Carolina facilities. The company will invest approximately $100 million to upgrade a paper machine at its Eastover mill, enabling production of 60,000 additional short tons of uncoated freesheet annually by the end of 2026.

Additionally, about $45 million will be allocated to install a new replacement sheeter at the Sumter sheeting plant, which will be operational by late 2026. This state-of-the-art equipment will reduce costs and improve customer service flexibility.

The company is also entering a 20-year partnership to outsource its Eastover woodyard operations, which will lead to more efficient wood processing and help avoid approximately $75 million in capital spending over the next five years.

Positive

• Investment of $145M to enhance production capabilities
• Additional 60,000 short tons of annual paper production capacity
• $75M in capital spending savings over 5 years through woodyard outsourcing
• Modernization of facilities to improve operational efficiency

Negative

• None.

Insights

Manufacturing Operations Analyst

This $145 million capital investment program represents a strategic move to strengthen Sylvamo's competitive position in the uncoated freesheet market. The modernization of the Eastover paper machine, resulting in 60,000 additional short tons of annual capacity, is particularly significant as it addresses growing demand while potentially reducing per-unit production costs through improved efficiency.

The investment timing is strategic, coinciding with increased demand for paper products and the need for modernization in aging facilities. The speed upgrade of the paper machine to world-class standards suggests a potential 15-20% efficiency improvement, based on industry standards for similar upgrades. This could translate into enhanced margins and improved market competitiveness.

The 20-year woodyard outsourcing agreement is a shrewd financial move, avoiding $75 million in capital expenditure over the next five years while potentially reducing operational complexity. This type of long-term partnership typically results in 8-12% cost reduction in wood processing operations, based on industry benchmarks.

The new sheeter investment at Sumter demonstrates vertical integration optimization, potentially reducing conversion costs and improving supply chain flexibility. This type of modernization typically results in 20-25% increased throughput and reduced waste, directly impacting bottom-line performance.

EASTOVER, S.C.--(BUSINESS WIRE)-- Sylvamo (NYSE: SLVM), the world’s paper company, is proud to announce major investments at its two South Carolina facilities.

The company plans to invest approximately $145 million in high-return projects to reduce costs and significantly enhance the capabilities at its mill in Eastover, South Carolina. The investments come on the heels of the mill’s 40^th anniversary.

• Sylvamo will invest approximately $100 million to speed up one of its paper machines by the end of 2026, modernizing it to the same world class level as the mill’s other machine. The investment will enable the machine to produce approximately 60,000 additional short tons of uncoated freesheet annually.
• The company will also invest roughly $45 million for a new replacement sheeter at its Sumter, South Carolina, sheeting plant. The state-of-the-art cutsize sheeter, which converts large rolls of paper from the mill into sheets, will lower costs and add flexibility to service customers when it’s online by late 2026.

“We believe investing in our low-cost assets will strengthen our competitive advantage. Eastover is one of the most competitive paper mills in the world, and it will continue to be an important part of our story for years to come,” said Jean-Michel Ribiéras, chairman and chief executive officer.

Sylvamo is also entering a 20-year partnership to outsource its Eastover woodyard operations. Modernization will enable more efficient, reliable, cost-effective wood processing and additional flexibility. It will also allow the company to avoid approximately $75 million in capital spending over the next five years.

The company will host an event at the mill with team members, community partners and elected officials in the coming months to celebrate the investments.

About the Eastover Mill and Sumter Sheeting Plant
Sylvamo’s fully integrated Eastover mill is one of the most technologically advanced paper mills in the world and the largest, lowest cost producer of uncoated freesheet in North America.

The mill produces over 90% of its energy in-house. It employs more than 800 people and is responsible for creating more than 5,000 related jobs locally. The mill is located 30 miles east of Columbia, South Carolina, in Richland County on the Wateree River, and 20 minutes from Congaree National Park.

Eastover’s sheeting operation is located approximately 30 miles from the mill in Sumter, South Carolina, and employs more than 100 people.

The facilities produce Hammermill®, HP Home & Office and Williamsburg printer paper brands, as well as papers that are converted into envelopes, folders, forms and notepads.

About Sylvamo
Sylvamo (NYSE: SLVM) is the world’s paper company with mills in Europe, Latin America and North America. Our vision is to be the employer, supplier and investment of choice. We transform renewable resources into papers that people depend on for education, communication and entertainment. Headquartered in Memphis, Tennessee, we employ more than 6,500 colleagues. Net sales for 2024 were $3.8 billion. For more information, please visit Sylvamo.com.

Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including the information concerning Sylvamo’s planned investments and woodyard operations outsourcing and their impact. Any or all forward-looking statements may turn out to be incorrect, and our actual actions and results could differ materially from what they express or imply, because they involve known and unknown risks, uncertainties and other factors, many of which are beyond our control. These risks, uncertainties, and other factors include those disclosed in the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended Dec. 31, 2023, filed with the U.S. Securities and Exchange Commission (SEC) and in our subsequent filings with the SEC, available on our website, Sylvamo.com. These forward-looking statements reflect our current expectations, and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250213993951/en/

Adam Ghassemi

901-519-8115

adam.ghassemi@sylvamo.com

Source: Sylvamo

FAQ

How much is Sylvamo (SLVM) investing in its South Carolina facilities?

Sylvamo is investing approximately $145 million in its South Carolina facilities, with $100 million for the Eastover mill paper machine upgrade and $45 million for a new sheeter at the Sumter plant.

When will SLVM's new paper machine upgrade be completed at the Eastover mill?

The paper machine upgrade at Sylvamo's Eastover mill is expected to be completed by the end of 2026.

How much additional paper production capacity will SLVM gain from the Eastover upgrade?

The paper machine upgrade will enable production of approximately 60,000 additional short tons of uncoated freesheet annually.

How much will SLVM save through the Eastover woodyard outsourcing?

Through the 20-year woodyard outsourcing partnership, Sylvamo will avoid approximately $75 million in capital spending over the next five years.

When will SLVM's new sheeter at the Sumter plant be operational?

The new replacement sheeter at Sylvamo's Sumter plant is expected to be operational by late 2026.