[abrupt start] Thank you, and good day, everybody. Thanks for joining us. As always, as I move through the investor presentation, I'll call out page numbers. Just starting on Page 2, just refer you to the forward-looking statements disclosure, if you can take a read of that. And then moving to Page 3, the second quarter in context. It's fair to say we did see a deterioration in the market conditions across all segments from where we were, obviously, three months ago. We did know that the earnings were going to be less and certainly, we guided that way because we had material shuts in the quarter. We had the -- firstly, we had the shut for the Somerset project, which had about a $20 million impact, which was as expected. And then we had two big maintenance shuts at our two big South African mills Saiccor and Ngodwana. Those took longer than anticipated. We did pick up some issues during the shut. And overall, that had an impact of an additional 13 million tonnes. Broadly speaking, that is the main reason for the differential to the guidance that we provided. Having said that, as I said earlier, the market conditions did deteriorate. We saw our selling prices across all the segments coming under some pressure. And obviously, that picked up momentum as we got to the end of the quarter, particularly in anticipation of the announcements of the tariffs in the U.S. by President Trump. We certainly saw a slowdown as it progressed. Overall, the actual sales volumes themselves were actually reasonably stable. And I'm pleased to say that we did see volumes in the Packaging segment higher than they were previously. But obviously, the impact on shuts is that you have lower production, you have higher fixed cost absorption and obviously, lower inventories at the end of the quarter. Moving to Slide 4, just some of our metrics on a 12-month basis. The cash generated from operations, despite the tough last quarter, still strong. And our net debt to EBITDA, you can see up to 2.4, but we did anticipate that because we had the higher CapEx coming through. I'm pleased to say that we successfully completed a refinancing of our 2026 bonds during the quarter. Good demand there, nice pricing and replaced that with 2032 bonds. Slide 5 has the year-on-year EBITDA reconciliation bridge. And what is interesting is that on the sales revenue side, things were reasonably stable, as I indicated earlier. And the big reason for the shortfall year-on-year is driven by the fixed costs, which is primarily linked to the shuts. And as I said, you have lower production, the cost of the shuts themselves. And because you have lower production, higher fixed cost absorption rates on the remaining tonnes that you produce. That is the big reason for the year-on-year adjustment or difference. The other thing to call out, there was a negative fair value adjustment on the plantations in South Africa. That was something that we talked about in earlier quarters. The prices haven't gone down any further. But as you annualize these, you have the remaining impact coming through. And that is expected -- that will level off as we fully annualize. Turning to Slide 6. Just directionally, some of our major variable costs. Energy up in Europe. There was some higher energy costs coming through, albeit that, that has reversed a little bit in more recent times. In South Africa, because of the shuts, once again, your energy costs because you're not getting the efficiency and the usage of your boilers. So you have higher energy costs, and that pushed that up there. Pulp and wood was lower. Similarly, chemicals and delivery costs relatively flat. Moving to Slide 7. This is an expanded slide, and we thought it was important to show this because it tells a very important story. Yes, our debt levels are a little bit higher at the moment, and that's by design because we had the -- well, firstly, we had the closures in Europe last year, which we had to fund. And then we have the Somerset project. This was anticipated, I guess the only surprise is the fact that the dollar versus the euro has weakened and that has added some to the debt number. But overall, as expected, you can see our debt levels are substantially lower than in the past. And we remain committed to reducing debt. And over the next two years, you're going to see a substantial reduction. The Somerset project is obviously now complete. And as we move through '26 and '27, you'll see a substantial reduction towards our longer-term debt targets. Turning to Slide 8. Once again, from a liquidity perspective, I think it tells a good story.We've now refinanced the '26s, a little bit of short-term debt, but -- the next big one now is way out in 2028. So we're feeling good about the run, the outlook and profile, and that continues to be tightly managed. Turning to Slide 9 on the cash flow and CapEx. Firstly, on the cash flow on the left, obviously, the free cash flow is lower than the prior year, and that's predominantly linked to the shuts. It is a year-to-date number, so you don't have the full impact, but we've obviously got the shuts there. And then the timing of working capital. The reason I call it out that it's a year-to-date is we typically have a positive working capital movement in the last quarter of the year. And then just to come to the net cash, obviously, we had the dividends and the CapEx that we had to fund. On the right-hand side, our CapEx projections, the estimate for this year has gone up. It's $550 million. The reason it's higher than we spoke about last time is that the completion of the Somerset took a little bit longer than we expected. It's now done. And based on our final estimates for that project, we are estimating $550 million for the year. just to say, and I know we'll get asked it later, our estimates of the cost of the project are close to $500 million. The reason for the overrun, well, one was higher labor costs, and we talked about it last time. The further increase we've seen in this quarter is due to it taking a couple of weeks longer than we had anticipated. Now that that's behind us, we're strongly committed to reducing debt and -- with that in mind, our CapEx is going to be primarily focused on maintenance and legal commitments. And for the next two years, at least, we're going to keep our CapEx levels below $350 million. And with that, obviously, we're going to see a substantial reduction in debt. And that's a strong priority, our immediate priority as a business moving forward. Slide 10 has our -- it's a new slide that we felt was appropriate to show, and it's our returns relative to our WACC. And we've gone back some time. We thought it was important to demonstrate that our returns have consistently been above our cost of capital. The only time that we didn't make that was during the COVID period. Obviously, this year is challenging. But we have a target of achieving at least 2% above. And certainly, when we consider projects and opportunities moving forward, we will continue to apply that. So we thought it was important for shareholders to see that. And with that in mind, we move to Slide 11. We have a disciplined capital allocation strategy. Obviously, maintenance comes first, maintenance capital, any regulatory commitments that we have to make. We've committed to science-based targets. So there's a little bit of sustainability cost there. Some of it's legal. But overall, we've got to take those commitments into account. And then moving down, as I say, our balance sheet sustainability is very, very important. You're going to see a substantial reduction from Q4 onwards and into the next few financial years. Our immediate -- or our medium target term target is $1 billion, and we certainly want to get it below those levels. Then moving further down the capital allocation, we have some cost savings initiatives, efficiencies. These tend to be smaller projects, but with very short paybacks. And then ultimately, we move towards the dividends. And obviously, we've been paying dividends over the last few years. And then only then once we take that all into account, will we consider future growth projects. And there are no major -- there are no projects that we're looking at, at the moment or looking to do in the next couple of years. Slide 12, very excited to say that the project is now complete, very exciting. We think the U.S. market is a core market for us. The packaging in the U.S., it's achieved positive growth in the last 12 months, resumed its growth. This project will double our capacity on the machine and give us 470,000 tonnes of SBS. Machine is looking great. The team are excited. We are signing up customers -- it's very much aligned to our strategy to reduce exposure to graphic paper and growing the packaging segment. Some nice pictures there. We have many pictures, but it's great to see the paper going through the machine. And we've given you a video link where you can see some of the team that worked on the project, and you can see their excitement to having this done and their enthusiasm for ramping up and as we move ahead. So we're very proud of this, and it's an important strategic step for Sappi's sustainable future. Moving to the segmentals and Slide 14, starting with pulp. Generally -- well, in the quarter itself, the pulp numbers were okay. We did see DP prices reduced during the quarter. If you recall, they started at 970 dropped to 900 by the end of the quarter. So there was a little bit of price downward pressure that has affected us. Some of our contracts are lagged, but obviously, we do have exposure to a substantial portion of our volumes. And then the other factor is the shuts themselves. The fact that we had Saiccor and Ngodwana, the lower production, yes, the sales volume was the same. But because we produce less, as I said earlier, you have to spread the fixed costs and the maintenance costs, and that's what impacted the volumes. obviously, there has been downward pressure, and it's in prices, and that's been linked to the geopolitical trade tensions. Normally, we see a bounce back post the Chinese New Year. But obviously, by then, we started to -- various industry players started to anticipate the tariffs that were about to come. And we saw activity slow, and it further slowed after the quarter end, and I'll talk a little bit more about that when we get to the outlook. The Page 15 is the Packaging segment. Generally, okay in terms of demand. We did see positive growth in the U.S. and South Africa. However, once again, those markets or the profitability in those regions was impacted by the respective shuts that we had. The other thing I would say is that in the U.S. on our Somerset PM1 offering, there was a little bit of a product mix adjustment in anticipation of commissioning on Somerset PM2. So that did impact profitability, but we regard that as once-off issues. Moving to Graphics on Slide 16. Overall, reasonably stable volumes. We've been gaining market share, both in U.S. and in Europe. A little bit of downward pressure on selling prices, which impacted overall margins. But obviously, once again, well, you had the shut in the U.S. as well, which would have had an impact on profitability. Selling prices, although they're down, they are reasonably resilient, which brings me to Slide 17, which just very briefly summarizes all the regions. And the quick takeaway from this one is that on the top line, okay. The revenue is reasonably stable. You've seen that on the graph earlier. We did see higher variable costs in North America and South Africa. Once again, that is linked to the shuts and the production associated with what's left at the mill during those shuts. And then just graphically on Page 18, Europe continues to be challenged by difficult macroeconomic conditions. It's still -- it's never fully recovered in Europe since COVID. So it is challenging conditions. And obviously, now we have the kind of latest trade tensions, which is not allowing for a meaningful improvement. The U.S. was affected by the shut on PM2 and lower selling prices for SBS. And then in South Africa, as I said, once again, the two big shuts. Slide 19 has our Thrive strategy. It's something that we continue to focus on. It guides us as we look forward. And once again, you've seen it before, and I'm not going to talk about too much other than to say, firstly, on operational excellence. Obviously, when you move into times difficult market conditions, a focus on costs, focus on efficiencies is ever more important. And that's what we're working on. I do think that with the current market conditions and albeit the uncertainty around tariffs, there could be raw material cost opportunities, and it's important that we take advantage of those. On enhancing trust, obviously, sustainability is very important, particularly -- well, it's across all our segments. But the fact that our wood is certified, I always say it gives us a strong strategic positioning against our competitors. In terms of growing our business, we've made those investments now, and it's important that we ramp up, realize the profitability. And obviously, we continue to reduce exposure to graphics. And then on financial health, you've heard me say many times, bringing the debt down is our #1 priority. You see the 1.5x here. Obviously, based on roughly where the EBITDA levels are, that roughly equates to the $1 billion. And that's why we are strongly committed and a strong balance sheet and optimizing our capital. Turning to tariffs on Slide 20. I think firstly, the direct impact of tariffs is not that material. We do have about 7% of our sales volumes cross-border U.S. trade. So it's not that material. And we look at the individual categories, it's not -- we don't think it's going to have a significant impact on our business. We do have some raw materials, but we would look to source those and the tariff situation is evolving, and it's important that we are flexible in terms of our suppliers. On the graphic side, the U.S. is a net importer of graphic paper. roughly 500,000 tonnes. And the fact that we are a domestic producer could create opportunities for us. Our European business imports about 50,000 tonnes of graphic paper. So we have a little bit of exposure there. And then similarly, on the packaging and the SBS side, overall, the U.S. is a net importer. So once again, this could create opportunities. And I think which is nice as you start up on the PM2 at Somerset, this could create additional opportunities. We've obviously been signing up customers for a period of time, and this could be additional on top of that. We do have a little bit of exposure from Europe being 25,000 tonnes of various spread across a number of products on the packaging and specialty front. Then turning to dissolving pulp. We export about 30,000 tonnes of DWP to the U.S. So it's a relatively small portion of the total. Our Cloquet mill in the U.S. exports 200,000 to other countries, which, I guess, potentially could have -- there could be reciprocal tariff, but it's important to say that's not China. This is other countries. And clearly, at Cloquet, we have the ability to swing. So that gives us some mitigating potential mitigating factors that we could take into account. So overall, you can see the direct is not material. And if anything, there are potentially more opportunities. The bigger worry is the indirect impact and its impact on global trade flows and ultimately inflation and consumer demand. And most specifically, it's on the tariffs imposed by the U.S. on textile -- well, it's not just textiles, but for us, it's obviously textile and apparel manufacturers in China. That is impacting on demand for clothing. And we export a significant amount of our volumes to Asia and more specifically China. What we're seeing at the moment is that various industry players are adopting a wait-and-see attitude. The trade flows between China and the U.S. have slowed considerably. The vessels are not flowing. And everybody is waiting to see what happens. For us, it's not so much that we sell huge volumes into China, but we are exposed to Chinese selling prices. So because the conditions have deteriorated rapidly, it has meant that the DWP price has dropped. I talked about it earlier. After the quarter end, it's now -- today, it's $830 a tonne. And it's for that reason, we had to be cautious about our outlook statement. Now I -- we believe this is a short-term impact. You saw it, obviously, during COVID. Ultimately, the U.S. will need clothing and ultimately, volumes will flow once again overall. But at the moment, on a very short-term basis, there is not a lot of activity, and that is having an indirect impact on DWP selling prices. I'm not concerned about the volumes because most of our volumes either goes contractually to our long serving or our long-standing contractual customers or they go to other markets outside of China, but we are exposed to the Chinese price, the selling price of DWP. So with that in mind, then moving to Page 23, our outlook statement. As I said, this disruption of trade flows and in particular, on the clothing sector, that is why we've been very cautious. On the cost front, yes, there's a risk of inflationary pressures. But as I said earlier, some of our raw material costs are starting to come down now. So that could create opportunities. We do have some shuts in the quarter. Those are normal, but we wanted to be transparent and just call those out to you. And then on the Somerset, as I say, completed, now we're focused on ramping up and Q3 will be progressively ramping up. Turning to Page 24. Firstly, on capital allocation, obviously, I've indicated that the CapEx for the year is $550 million. The final payments for the PM2 conversion occur in Q3. And then -- so you'll see the peak at the end of the quarter and then Q4, that reverses and then we start to come down fairly fast thereafter. And so taking all that into account and given this uncertainty and primarily given the DWP price at $830 a tonne, we have adopted a cautious outlook. And based on that, we've estimated that adjusted EBITDA for the quarter will be at a similar level to Q2. So operator, I've gone through the presentation. I'm now going to hand it back to you for questions.

[Operator's Instructions] Our first question comes from the line of James Twyman of Prescient. Please go ahead. Your line is open.

Thank you very much. Yes, the questions from me. Firstly, in terms of the U.S. market, what reaction have you seen from the import competitors in terms of any movements in pricing that they've done? And I suppose you would be an example of that. So have you adjusted your prices for imports into the U.S., for example? And secondly, how exposed are the Chinese viscose producers to the U.S. market? I mean, roughly, what percentage do you think of their sales ends up in the U.S.? And then the third question is in terms of the timing of the start-up of the new machine at Somerset. -- do you think we can assume that in Q4, it will be ramping up and breaking even? Or do you think that's been delayed a little bit further?

Yes. Okay. A number of questions. Firstly, on the imports into the U.S. and I'll let Marco elaborate if I haven't fully answered your question. But we did see some announcements from different players, both in the graphics and in the packaging side. You remember that there was the initial announcement of 20%, and then it dropped to 10%. So some players jumped the gun and then reversed it. So we've seen various behavior from different players. There's so much uncertainty, James. From our perspective, we have not increased those prices as of yet. Marco, anything you want to add there?

No, no, Steve, you're right. The uncertainty has led to a very diverse approach, which all has been rolled back and basically waiting for the negotiations between the European Union and the U.S. And you might see then more direction. For the moment, there's not -- you're right, we have not increased our prices.

Yes. James, I think everybody has pulled back and adopted a wait-and-see strategy. Your second question about Chinese viscose producers exposure. I know that -- and Mohammed can correct me, about 35% of clothing to the U.S. comes from China. What we don't know is what that same ratio for viscose producers because it tends to -- a lot of it gets blended and we don't have the full visibility downstream. So I would say about one third of the overall U.S. clothing. Mohammed?

Yes, Steve. I should just add, I think it's important to distinguish between the finished garments, as you pointed out, and the raw material fiber like viscose. From our understanding, looking at the export stats out of China, there's very little of viscose staple fiber exported to the United States. But yes, finished garments in volume terms makes up about 35% of the clothing that the U.S. imports.

Yes, indeed. And then on the last question, I'll let Mike talk more broadly. But just obviously, Q3 has the initial start-up, the initial ramp-up, the initial teething, that's normal. And that's obviously part of the outlook statement that we've given in terms of our guidance. By the time we get into Q4, you start to see further improvement. And I think I said it on the call last time is that each quarter thereafter, as you move through '26, you're going to see a progressive improvement each quarter. But yes, you will see an improvement in Q4. Mike, maybe just broadly just talk about how you see the ramp-up occurring?

James, the ramp-up starts right now. And as it ramps up, -- it's kind of exponential in the early phase. You asked about the volume. I would suggest that the machine by the end of Q4 is back equal to a production level that we were at when we shut down, but now on purely board versus graphics. And then from that point forward, we'll be continuing to increase production throughout the following year.

I've got some follow-ups, which I'll do later on if there is time.

Our next question comes from the line of Brian Morgan of RMB Morgan Stanley. Please go ahead. Your line is open.

Yeah, thanks very much. Steve, if I could just ask, could you talk to us about the calculus around swinging Cloquet maybe from DWP back to paper pulp, given the way the prices have fallen, I have thought some aggressive action would be needed to address this price fall.

Yes. As always, Brian, the differential is about $250 a tonne. And clearly, with DWP prices now at $830, the gap becomes much closer. The one thing I would say is that now hardwood pulp prices have dropped. Obviously, China tends to lead the world in terms of pricing here. But we've seen hardwood pulp prices in China now below $500 a tonne or just below $500 a tonne. In the U.S., it's not at those levels or Europe, they're not at those levels. So at the moment, Mike, it's roughly -- the prices have only dropped in the last couple of days. So you need -- you clearly need time to react. But as things stood last week, it was still very close to the breakeven levels, Mike?

I think that's accurate, Steve. And we evaluate that on an ongoing basis. and make the right business decision.

Yes. I mean it's important, Brian. As you know, with these things, you have contractual commitments. You've already made your orders for the paper pulp. You can't move in and out on a daily basis. But clearly, if it were to stay at less than $250 for a period of time, then you would make the decision to make more paper pulp.

Okay. Cool. And then can I just ask on -- can you just update us on the timing delays of CCS prices and how they feed through into your top line?

Yes. It's a good question. As you know, in the past, 80% of our volume used to be a quarterly lag. We've since restructured that and roughly about 15% now is on a quarterly lag. And then the vast majority of the rest is either 1 month in arrears or on spot.

And Brian, I'm glad you asked it because obviously, that was why you had a bit of an impact in Q1 and also why we're so cautious about -- sorry, I didn't mean to say Q1, I meant Q2. A little bit of an impact on Q2 towards the end of the quarter and why we were so cautious about our outlook for our Q3 earnings.

That's great. And then can I just ask a third question on maintenance shuts in South Africa. You've spoken in the past about a shortage of skills. Is that the reason for the $30 million overrun? Or is there something else?

No, I wouldn't say so. And I'll let Graham expand further. It is a challenge. But when we took the shuts, we did identify some additional issues. And then when we restarted up afterwards, that didn't go as smoothly. We can't put it all down to human resources. Some of it relates to what was identified during the shut. But Graham, maybe just if you want to speak about. Yes. Maybe just to check whether it's the shut overrun cost-wise at some... Overrun in this quarter. You're talking South Africa. Just from a personnel perspective, there's always a shortage, but it's not had a material impact.

Yes. Typically, the area of concern was on the recovery boiler side. And typically, there, we bring in expertise from the equipment manufacturers and highly skilled typically. So it's not a skills issue. It's predominantly a weakness in materials outside of the normal risk work that we did. And that led to problems in start-up once pressure was back in the recovery boiler. And of course, when you have those issues with the recovery boiler, it needs to cool down and then heat back up. So each time you have one of these issues, it adds sometimes four or five days' worth of delay, which has both a production impact, but more materially or equally as materially is a cost impact because we're unable to generate power from our own processes during that period, and you need to add typically bunker fuel to get the recovery boiler going again. So not a skills problem in this case. It's more about where on materials outside of the normal areas we would address in the shut.

Our next question comes from the line of Sean Ungerer of Chronix Research. Please go ahead. Your line is open.

Good afternoon, Steve. Just going back to the outlook statement. You obviously flagged the DP price is a key concern. Just can you maybe talk about order books on the DP front? Is that also a concern? Or is it just mainly the price element at this point?

It's interesting, Sean. Even across all the segments, it's not a volume issue at the moment. Volumes are reasonably stable. And as you know, on dissolving pulp specifically, we have a high proportion contracted and those volumes are fine. This is purely purely price. When you're selling over 300,000 tonnes a quarter and the DP price drops by $100 a tonne, that has a material impact on quarterly earnings. So that is our main issue at the moment. And obviously, look, Q3, for those who have followed Sappi for a long time, Q3 is normally the lowest quarter. You bring in this impact of the lower DWP price. And then you've got the ramp-up on PM2 at Somerset. You bring all that into account, and it tells a large part of the story of why we are guiding the way we are.

Perfect, Steve. And then just going on to PM2 with the obviously the higher CapEx for FY '25 now. Does that mean it's gone from $450 million to close to $485 million? Or is it -- was that?

Yes. We're close to -- we're estimating close to the $500 million mark, Sean. Roughly, the difference overall from the initial guidance we gave, obviously, last year, roughly, it was higher labor costs, which we talked about last time and then this -- the fact that it took us a little bit longer in April to complete the project. Roughly half-half those two issues make up the difference to get us to the $550 million. And then moving forward, we're estimating below $350 million CapEx for the next two years. We don't normally give you two years ahead, but we felt it was very important to emphasize our commitment to debt reduction and the CapEx is primarily going to be focused on maintenance CapEx.

Just on that slide where you have the CapEx for the following years, it looks like it's close to like $320 million, $325 million. And if I look at maintenance CapEx for the past three years, it's hovered around $200 million mark based on what's been disclosed at least. Are there any levers to shave off from the $320 million? Or yes, I just want to get your thoughts around that.

Yes. Look, included in those numbers is the sustainability commitments that we've got. Some of it's legal in Europe. So it's still early days, and we're still working through the final numbers, but you have our commitment that we are going to be at maximum of those levels. And clearly, we would like to bring it down further.

Okay. Perfect. And then Steve, just on cash flows heading into Q2. Now you're obviously calling peak gearing in the third quarter. I'm assuming CapEx is heavily weighted to Q3 with maybe one third left or say, the balance there for Q4. Are there any other notable cash flows that we should be aware of? I mean what's happening with working capital for the next couple of quarters, just so we can get a better feel around that?

Yes. Indeed, I'll let Glen elaborate further. But if you look at the year-to-date CapEx, it's about $280 million -- so you've obviously got the balance of the CapEx to get to the $550 million for the full year. And a high proportion of that occurs in Q3. And that's why we said the Q3 will be higher. But -- well, I'll let Glen talk about working capital and then the reversal.

Yes. So Sean, just taking it further, the bulk of that CapEx will come through in Q3. The CapEx will taper off in Q4. We're expecting a further outflow on working capital in Q3, but then that reversing and more than reversing in Q4 and coming out above where we were last year. So overall, Q4 will be a good cash inflow, and we'll reverse whatever happens in Q2 -- Q3, I mean.

Our next question comes from the line of James Perry from Citi. Please. Please go ahead. Your line is open.

Hi. Thanks for the presentation. I think most of the questions have been asked now, but just a quick one again on the CapEx. You said that the higher guidance is mostly due to the longer maintenance and the Somerset overrun. So just to be clear, is that to say that extra $25 million is mostly incorporated into the Q2 figure already? Or should we model higher figures at all for Q3 and Q4?

No, I would say -- maybe it comes back to the point that I made earlier. The year-to-date CapEx is $280 million, right? Yes. So yes, so that means that the balance of the $550 million will occur in Q3 and Q4. And a significant proportion of that is in Q3. So specifically to the '25 you referred to, that technically, yes, would be in Q3.

Our next question comes from the line of Andrew Jones of UBS. Please go ahead. Your line is open.

Hey, thanks for the Chancellor's questions. I just had a couple. I mean, first of all, on the U.S. volumes or volumes shipped into the U.S. from outside. Can you quantify those? I mean you gave us sort of percentage of revenue roughly. But in terms of volumes of coated wood-free or any other products, could you give us some volumes around that? And then I'll ask the next one.

Yes. Are you talking about the industry or Sappi?

No, for Sappi specifically.

Yes. It's on the one slide that we have for the tariffs, coated wood-free -- sorry, graphic paper is about 50,000 tonnes and packaging and some of the other smaller specialty grades combined, all of that is about 25,000 tonnes. So you can see -- yes, those are not small volumes, but it's not material volumes. Overall, there's something like 500,000 tonnes of coated wood-free imported into the U.S. So we're not the largest importer.

And then -- I mean, as the mill ramps up at Somerset, how do you see the market playing out? Because I mean, I guess, maybe you get -- potentially, you get some lower imports because of the tariffs. But it's such a large mill in that market. Do you expect to see peers shutting? I mean do you -- I mean, obviously, I guess, demand might potentially be under pressure if consumer confidence is lower. I mean how do you see your ability to actually place the volumes in that market? I mean do we need to see your peers shutting down to be able to really allow you to ramp that mill up properly? Or do you think -- I mean, what's your take on how that shakes out?

Okay. I'll start and then I'll pass to Mike to talk a little bit further. But firstly, I would say we have seen an increase in demand over the last year or two. So that's partially going to help. And specifically, Sappi's business case around this project was focused on non-integrated converters. And we've been working closely with them and signing them up. So we're pretty confident that we can -- we've already signed a whole bunch up, and we will continue to sign. So we are confident that we can fill the machine. There was a little bit of capacity that came out a couple of years ago, which will help us further. And then obviously, this latest noise around tariffs, there are converters in the U.S. who are wanting to have domestic capacity and suppliers. So that will further create opportunities. We continue to believe that the market will grow at a couple of percent per annum. So all of those factors will contribute positively. But maybe, Mike, just you want to elaborate further?

Steve, I think you captured most of it, but the one thing that I'd offer is we have about two third of the volume for our start-up already lined up. We also have the ability, if pressured to swing our PM1 because that machine was designed to be able to make graphics or packaging. Now that's not our intention initially, but if there was pressure in the graphics market continue to be strong, that's an option for us. But we feel great about the project. In all honesty, we included a link and the link is a few weeks old now from the video, but we have a brand-new state-of-the-art paper machine or board machine in our Somerset mill. It is absolutely well built and the commissioning has been going very, very well. So we feel great about our product. It has state-of-the-art controls, and it's truly world-class. And we're convinced our customers are going to realize that as they've realized that from our PM1 machine. So with all that, yes, our confidence is high.

No, that's clear. And just in terms of the competition, have you observed much of a change in terms of imports into the U.S. because of the tariffs or maybe with this new mill on the FPB side from store, they were obviously like looking at the U.S. market as a target market. Have you seen them aggressively trying to price into some of those converters to take share? And have you -- anything you can share on the competitive landscape?

No. Look, Andrew, as you know, we can't talk about competitors specifically. All we can say broadly is that the direct impact of tariffs hasn't taken place. So you haven't seen meaningful volumes move one way or another. But what I would say is that naturally, there is a nervousness associated with the threat of tariffs and customers are looking at their supply chains. They're looking at their suppliers. And the fact that we are a domestic producer puts us in a good position and against those imports that are coming in from Europe.

Okay. That's all clear. And just one slight clarification on something that you said earlier. I think the -- one of my colleagues was asking the question about the percentage of Chinese made viscose that goes into the U.S. I think you quoted the proportion of U.S. imports that came from China. But if we take the overall Chinese viscose market, do we know what percentage of that is being shipped out and specifically to the U.S. I think that was what the analyst was asking.

Yes. Andrew, you wouldn't know that. I'll tell you why because what happens is you have the various fibers that go downstream. And ultimately, a lot of that product gets blended. And it's very difficult to differentiate how much specifically goes from China to the U.S. So we always use as a proxy because we know overall clothing is about one third, as I said. So we just -- we use that as a guide. But we don't know the answer to that in short.

Your next question comes from the line of Cole Hathorn of Jefferies. Please go ahead. Your line is open.

Good afternoon. Thanks for taking my question two from my side. Two from my side. The first is on dissolving pulp markets. I know you mentioned that the real issue is the price rather than the volume and the production side. But I'd just like to understand how you're managing inventory levels whilst there's the debate around tariffs and concern around kind of clothing demand. And if clothing demand does come back and there's drop on tariffs there, do you think that the dissolving pulp prices come back faster than the commodity grade? So just how you're managing inventory levels and what could happen to prices if we see a kind of recovery there? And then secondly, it's a more difficult question, but on your European asset base, we are seeing a number of your competitors, in my view, kind of reevaluating what they think about medium-term demand, reevaluating how the costs might impact their assets. We're seeing more M&A. We're seeing increased discussion around closures, but no material closures as yet. How do you think about some of your mill assets in Europe? Could you be thinking about further kind of structural actions there, be it closure, disposal? Just any thoughts would be helpful.

Yes. Well, firstly, on dissolving pulp, a high proportion of our volumes is committed already, whether it's through long-term contracts or relationships with long-standing customers. And it's for that reason, we don't anticipate a significant risk on volumes. in terms of inventory levels, obviously, generally, if markets slow, there's a risk that inventory levels could build up. It's interesting. We obviously have the precedent of what happened during COVID, and we're not saying this is COVID times. But certainly -- and you'll all recall that there was a sharp drop during the height of COVID, and then you had this huge recovery thereafter. And I clearly, I'm pessimistic about the very, very short-term impacts of these tariff threats. But -- subsequent to that, ultimately, the Americans need to buy clothes, and you're going to see a massive recovery. And I speculate that, that will match what happened in 2022 after COVID. So it's a headache, but I do think you're going to have a massive bounce back because ultimately, people need clothes. On prices, when you have these dynamics underway and there's not a lot of activity out there in China. There are a number of clothing factories that have temporarily closed. The retailers in the U.S. have paused ordering from China. That's going on, whilst everybody waits to see what happens. At some stage, things have to be resolved one way or another. Maybe product -- the manufacturing of clothing moves to other countries. But ultimately, there will be the underlying demand for viscose, and it will just be a shifting of where our raw material goes. But I'm confident that it will bounce back. Unfortunately, in the very, very short term, it's having an impact on dissolving pulp selling prices. The European asset base, you're right, it continues to be challenged. There is excess capacity. We did a tremendous amount of work. We closed two mills last year. At the moment -- and you've heard me say it a few times on this call, it's -- I don't want to say volume is not a risk because it clearly is a risk. But at the moment, you're seeing a pricing risk rather than a volume risk. I don't want to underplay the volume risk. So to your specific question, I don't think we need to close any capacity at the moment, but we continue to evaluate. We project forward, and we are proactive. We've always been proactive. But at the moment, we don't think we need to close any capacity.

Maybe I'll just follow up with the dissolving pulp side of things. Prior to Liberation Day, we saw a number of the swing producers shifting their production as much as they could into dissolving pulp just because of the price differentials. How do you see that dynamic now? Are most of those swing producers starting to shift the other way? Or I imagine you probably commit to that production level for at least a quarter. So they probably much, but I just wanted to understand.

Yes, we haven't seen a significant shift reversing that. But what I'd say to you, as I think I said it on the call earlier, hardwood pulp prices are also under significant pressure out of China as well. A lot of the reasons for that are similar to what's happening in dissolving pulp. So what happened is you started to see hardwood pulp prices rise. And then the whole tariff thing happened and they've come back and in fact, they've reached Mohammed, the lower than they have been for some time again once again.

And then sorry, just one final clarification. On the capacity that you closed last year, just trying to understand, when you do close capacity, you do get the benefits of the fixed cost savings for those assets, savings on future CapEx and maintenance CapEx. We should think about, in general, yes, a one-off impact on the closure, but positive EBITDA contribution and importantly, also continuous fixed cost savings when there's upcoming capital calls on any assets?

Very much so. Yes. And that's -- we've seen that in the past. Obviously, subsequent to the closures that we made maybe two years ago now, we did get those savings, but there were other factors like selling prices and market conditions that offset some of that. But specifically on the fixed costs, yes, we did realize that. And if there was ever to be shut in the future, we would save those fixed costs.

There are no further questions. Speakers, please continue.

If there's no further questions, I just want to thank everybody for joining us today, and I look forward to discussing the results at the end of our Q3. Thank you very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.