A drought in South Africa could cost paper maker Sappi between $5 million and $10 million in the first quarter of 2016 as it would result in slower production in its mills, chief executive Steve Binnie said on Thursday.

The drought - the worst in over a century in the eastern KwaZulu Natal province where Sappi has some mills - will negatively impact profits but Binnie told Reuters the first quarter of next year would still show improvement compared with the first three months of this year.