CLOQUET -- Sappi paper company is going to diversify into other products and plans to start making a chemical cellulose used to make into fabric.
The South African company announced Thursday that it will stop making pulp at its Cloquet mill.
The new product is made into a fabric for clothing, wet wipes and other consumer products.
The Duluth News Tribune reports reports that Sappi Limited's board approved the $170 million investment in the Cloquet mill and hopes to begin producing chemical cellulose by 2013.
Sappi Fine Papers North America spokeswoman Amy Olson says the chemical cellulose will be shipped to Asia and used by the textile industry to make rayon fabrics.
The announcement came as corporate leaders announced a third-quarter loss due to the continued downturn in the paper industry.