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SAP - Sappi - Sappi begins consultation process on possible closure of Adamas
Mill; plans to invest in Eastern Cape community forestry
Sappi Limited
(Registration number 1936/008963/06)
(Incorporated in the Republic of South Africa)
Share code: SAP ISIN: ZAE000006284); NYSE code SPP
("Sappi" or the "Company")
Media Release
23 May 2011
Sappi begins consultation process on possible closure of Adamas Mill; plans to
invest in Eastern Cape community forestry
Sappi Southern Africa today announced that it had initiated a consultation
process with staff and relevant Union representatives to cease operations at
Adamas Mill in Port Elizabeth in response to difficult market conditions and
sustained input costs increases.
This supports Sappi Southern Africa`s strategy to improve the competitiveness
of its fine paper business by aligning its production capacity to market
demand. Removal of production capacity at Adamas would address the high
manufacturing overheads associated with a small mill (Adamas produces about
40,000 tpa, of a total regional capacity in excess of 1 million tpa). Variable
costs will be improved by shifting production closer to Sappi`s main South
African markets and raw material sources.
Sappi Southern Africa acquired the Adamas Mill in 1964. It originally produced
board for the motor industry and subsequently uncoated writing and printing
papers with a significant percentage of recycled fibre.
Commenting on the decision, Alex Thiel, CEO of Sappi Southern Africa said "We
fully recognise and commend the enormous past and ongoing efforts that
employees and mill management have undertaken to reduce costs and improve
profitability. However the Mill`s size, technical age and high costs of energy
and fibre have made it necessary to initiate a review. A final decision will
only be made once the consultation process in completed towards the end of
July."
The potential closure of Adamas Mill would have no impact on customers as
production will be moved to Sappi`s Enstra and Tugela Mills.
Sappi will maintain its presence in the Eastern Cape as regards marketing and
sales as well as the collection and purchase of collected fibre (used for
recycled paper) through Sappi ReFibre.
Forestry investment
Furthermore Sappi, in partnership with AsgiSA-EC have developed a joint
proposal with a strategic goal of accelerating the establishment and
management of 30,000ha of commercial tree plantations by 2020 in the Eastern
Cape. This development is expected to create a number of permanent skilled
and unskilled jobs. Sappi and AsgiSA-EC have already developed close to 150ha
in conjunction with the Mkambathi and Sinawo communities.
ENDS
Sappi Southern Africa:
Sappi Southern Africa is inspired to create, develop and market insightful and
relevant products that are responsibly made and originate from renewable
resources - wood fibre sustainably grown by Sappi Forests and private farmers
contracted to Sappi as well as collected paper sourced through Sappi ReFibre`s
network of paper collection agents. We are the world`s largest producer and
exporter of chemical cellulose used by converters and manufacturers in a wide
range of consumer products such as clothing, plastics, food and pharmaceutical
products, chemicals and beauty and household products. Our Paper and Paper
Packaging business supplies news media with newsprint, printers, the corporate
and creative sectors with coated and uncoated fine papers, converters, farmers
and industrial and consumer companies with cardboard boxing and durable
packaging papers and governments and other clients with security papers used
for passports, ballot papers and banking documents. Sappi brands include
Triple Green, Masuga, Typek, Reviva, Sentinel security paper, Barricoat,
Wicked Wrap and the Strato range of packaging papers. A third of the land we
own is conserved for natural habitat and biodiversity protection. Sappi
Southern Africa is a part of Sappi Limited (JSE: SAP; NYSE:SPP) a global
company headquartered in Johannesburg, South Africa, with over 15,500
employees, manufacturing operations on four continents, sales offices in 35
countries, and customers in over 100 countries worldwide. Read more at
www.sappi.com
Issued by:
Brunswick South Africa on behalf of Sappi Limited
Tel + 27 (0) 11 502 7300
For further information contact:
Elijah Masondo
Regional Communications Coordinator
Sappi Southern Africa
Mobile +27 (0) 83 661 7012
Tel +27 (0) 011 407 8478
elijah.masondo@sappi.com
Andre F Oberholzer
Group Head Corporate Affairs
Sappi Limited
Tel +27 (0) 11 407 8044
Mobile +27 (0) 83 235 2973
Andre.Oberholzer@sappi.com
Date: 23/05/2011 15:40:02 Supplied by www.sharenet.co.za
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