CHAIRMAN`S STATEMENT AT THE SAPPI LIMITED ANNUAL GENERAL MEETING: 3 MARCH 2003

CHAIRMAN`S STATEMENT AT THE SAPPI LIMITED ANNUAL GENERAL MEETING: 3 MARCH 2003  
SAPPI LIMITED                                                                   
(REGISTRATION NUMBER 1936/008963/06)                                            
SHARE CODE:  SAVVI                                                              
ISIN      :  ZAE000006284                                                       
TRADING CONDITIONS IN OUR MAJOR COATED FINE PAPER MARKETS REMAIN DIFFICULT.     
HOWEVER, DEMAND FOR OUR PRODUCTS HAS INCREASED COMPARED TO THE LOW LEVELS       
PREVAILING AFTER THE EVENTS OF 11 SEPTEMBER 2001 BECAUSE OF IMPROVEMENTS IN     
ADVERTISING IN PRINT MEDIA. CURRENT GLOBAL SUPPLY LEVELS FOR COATED FINE PAPER  
STILL EXCEED DEMAND AND WE CONTINUE TO CURTAIL OUTPUT TO MATCH OUR CUSTOMERS`   
NEEDS.                                                                          
In spite of the slow economy and downward pressure on pricing, our European     
business is producing reasonable returns, partly as a result of the stronger    
Euro (which helps to contain input costs) and partly as a result of its         
operating efficiency. We expect some price recovery, announced recently in      
Southern Europe, to become effective during March.                              
In North America, the announced price increases on coated fine paper continue to
be implemented.  The effect on average prices will however be partly offset by a
shift in sales mix towards lower-priced products but margins should begin to    
improve in the second half year.                                                
The strength of the Rand is putting pressure on the margins of our South African
business as most of its exports are priced in Dollars.  This will be partly     
offset by Dollar pulp price increases.  However, the effect of price increases  
for dissolving pulp will only be seen when they are realised next quarter.      
For the current quarter we expect earnings per share to be similar to the first 
quarter and we still expect earnings for the full year to show improvement over 
last year.                                                                      
We recently announced that Jonathan Leslie will be joining the company in April 
this year as CEO and we look forward to welcoming him to the Group.             
For further information please contact:                                         
Robert Hope                                                                     
Director Strategic Development                                                  
Sappi Limited                                                                   
Tel +27 (0)11 407 8492                                                          
Fax +27 (0)11 403 1493                                                          
Robert.Hope@za.sappi.com                                                        
Date: 03/03/2003 01:05:35 PM Supplied by www.sharenet.co.za                     
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