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SAP - Sappi Limited - Sappi announces final closure of Adamas mill 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 03 August 2011 Sappi Southern Africa announces the closure of its Adamas mill Johannesburg -- Sappi Southern Africa has today announced it will shut down its Adamas paper mill in Port Elizabeth, South Africa. The permanent closure of the mill is expected to be finalised at the end of August. This brings to a conclusion the process announced on 24 May 2011 to investigate the continued operation of the mill. Sappi Southern Africa has concluded an agreement with its Adamas mill employee representatives and redundancy notices have been issued to staff which specifies redundancy terms and includes provisions for outplacement and training support for all employees, to ensure that people have the best possible opportunity to secure new employment. The Adamas mill employed 213 people. The mill has operated in Port Elizabeth for 47 years. Alex Thiel, CEO of Sappi Southern Africa commented: "As I mentioned when we began the consultation process, we fully recognise and commend the enormous efforts that employees and mill management have put in to try to make the mill competitive and to find a way to create a future for the mill. Unfortunately these efforts have been unsuccessful. We recognize this is a difficult decision affecting our employees, their families and the local communities and we would like to thank all of them for their hard work and support. Unfortunately this action became necessary to address the severe cost pressure that we are facing and the uncompetitive nature of this old and small mill." The volumes produced at the mill have been transferred to Sappi Enstra and Sappi Tugela mills. We expect to take a charge of approximately US$5 million in respect of these closure costs in the fourth financial quarter ended September 2011. 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. It is anticipated that these partnerships will be developed between Sappi and communities that hold land rights, with Sappi being the "implementation partner" as a provider of technical, managerial and administrative support to the community businesses. This development is expected to create 1,400 direct and permanent unskilled jobs and a further 125 jobs for skilled workers. Using industry trends, it is expected that some four to five indirect jobs would be created for each direct job, meaning a further almost 8,000 jobs. In rolling out the project, Sappi and AsgiSA-EC have already developed close to 150ha in conjunction with the Mkambathi and Sinawo communities. ENDS Issued by Brunswick 011-502 7300 For further information contact: Elijah Masondo Andre F Oberholzer Corporate Communications Group Head Corporate Affairs Sappi Southern Africa Sappi Limited Tel: +27 11 407 8478 Tel: +27 11 407 8044 Mobile: +27 83 661 7012 Mobile: +27 83 235 2973 Elijah.masondo@sappi.com andre.oberholzer@sappi.com
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