SAPPI - PRESS RELEASE

PRESS RELEASE
APRIL 13, 1999
SAPPI RATIONALISES FURTHER IN US

SAPPI THE WORLD'S LARGEST PRODUCER OF COATED FINE PAPER ANNOUNCED THE CLOSURE
OF ITS PULP MILL AND A MACHINE WHICH MAKES COATED BASE PAPER AT ITS FACILITY IN
WESTBROOK MAINE USA.  THE CLOSURE WILL TAKE EFFECT IN LATE JUNE 1999.

IN MAKING THE DECISION TO CLOSE THE PULP MILL, COMPANY OFFICIALS CITED A
PENDING REQUIREMENT TO SPEND APPROXIMATELY $50 MILLION (R300 MILLION) TO BRING
THE PULP MILL INTO COMPLIANCE WITH THE RECENTLY PROMULGATED US ENVIRONMENTAL
PROTECTION AGENCY (EPA) REGULATIONS BY 2001.

SAPPI EXECUTIVE CHAIRMAN EUGENE VAN AS SAID THE EXPENDITURE COULD NOT BE
JUSTIFIED AS IT WOULD NOT IMPROVE THE COMPETITIVENESS OF THE ALREADY HIGH COST
PULP MILL. "THE CLOSURE IS FURTHER PROOF OF SAPPI'S COMMITMENT TO RATIONALISE
ITS PRODUCTION FACILITIES AND TO INTEGRATE ITS GLOBAL PAPER MAKING NETWORK TO
SOURCE PRODUCTS FOR CUSTOMERS FROM THE MOST APPROPRIATE MILLS AND TO TRANSFER
GRADES FOR THE OPTIMAL USE OF OUR PAPER MACHINES.  THE PULP PRODUCED BY THE
MILL IS IN EXCESS OF ITS OWN REQUIREMENTS AND THE EXCESS PULP THEREFORE HAS TO
BE SOLD AS MARKET PULP WHICH IS NOT FEASIBLE FOR A MILL THAT PRODUCES LESS THAN
A THIRD OF THE OUTPUT OF MOST MODERN MILLS".

THE PAPER MACHINE LACKS THE EFFICIENCY OF MODERN DAY MACHINES.  THE MACHINE
PRODUCES BASE PAPER FOR PRESSURE SENSITIVE GRADES AND OTHER COATED PAPER TYPES
FOR WHICH THERE IS LOW DEMAND.  CERTAIN GRADES FROM THIS MACHINE WILL BE
TRANSFERRED TO WESTBROOK'S TWO REMAINING PAPER MACHINES.   IT IS ANTICIPATED
THAT SOME OF WESTBROOK'S ONGOING PULP NEEDS WILL BE SATISFIED OUT OF THE
SOMERSET MILL, WHICH IS A LOW COST PRODUCER ALREADY IN CLUSTER RULE COMPLIANCE,
WITH THE BALANCE BEING PURCHASED AS MARKET PULP.

APPROXIMATELY 315 EMPLOYEES, BOTH SALARIED AND HOURLY WILL BE AFFECTED BY THE
CLOSURE. THE COMPANY INTENDS TO OFFER FAIR SEPARATION BENEFITS THAT RECOGNISE
BOTH THE LONG SERVICE AND CONSIDERABLE CONTRIBUTIONS THAT THE AFFECTED
EMPLOYEES HAVE PROVIDED TO WESTBROOK.

"THIS WAS AN EXTREMELY DIFFICULT DECISION, PRIMARILY BECAUSE OF ITS IMPACT ON
OUR EMPLOYEES" SAID MONTE R. HAYMON, PRESIDENT AND CEO OF SAPPI FINE PAPER
NORTH AMERICA.  "UNFORTUNATELY IT HAD TO BE MADE IN THAT THERE WAS NO WAY TO
JUSTIFY SPENDING $50 MILLION TO PUT THE WESTBROOK MILL INTO FUTURE

ENVIRONMENTAL COMPLIANCE.  THE MILL WOULD CONTINUE TO BE UNABLE TO COMPETE
AGAINST MORE MODERN MILLS DUE, IN LARGE PART, TO ITS SIZE AND HIGH COST
STRUCTURE".

THE GROUP WILL RECORD A POST TAX CHARGE OF APPROXIMATELY $31 MILLION (R184
MILLION) THE NET CASH ELEMENT OF WHICH WILL BE $5 MILLION (R32 MILLION) DURING
THE THIRD FINANCIAL QUARTER OF 1999, WITH RESPECT TO THE CLOSURE.  THE COMPANY
EXPECTS THE RATIONALISATION TO IMPROVE FUTURE OPERATING INCOME.

"THE ANNOUNCEMENT SHOWED SAPPI'S COMMITMENT TO RATIONALISING ITS BUSINESS BY
SHUTTING UNPROFITABLE OPERATIONS AND SELLING NON-CORE BUSINESSES.  SINCE 1995
THE COMPANY HAS SHUT A TOTAL OF TWELVE PAPER MACHINES WITH A CAPACITY OF
APPROXIMATELY 400 000 TONS OF PAPER.  WE HAVE ALSO SOLD TWO NON-CORE ASSETS THE
PROCEEDS OF WHICH WERE USED TO PAY DOWN DEBT.  THE AVERAGE PRODUCTIVITY PER
MACHINE OF THE GROUP'S- PAPER MAKING FACILITIES, IS NOW MORE THAN DOUBLE THE
AVERAGE OF THE US AND WESTERN EUROPEAN PAPER INDUSTRY" VAN AS SAID.