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Update on impact of civil unrest in South Africa on Sappi’s South African operations
Sappi Limited
(Incorporated in the Republic of South Africa)
Registration number: 1936/008963/06
JSE share code: SAP
ISIN code: ZAE000006284
("Sappi" or the "Company")
21 July 2021
UPDATE ON IMPACT OF CIVIL UNREST IN SOUTH AFRICA ON SAPPI’S SOUTH
AFRICAN OPERATIONS
The civil unrest referenced in our market update of 14th July appears to be under control.
Intensive work by government agencies and business is focused on ensuring that supply chain
disruptions are resolved, and people can move safely to and from work. Sappi’s employees
at the affected mills were able to return to work on Monday 19th July.
There was no material damage to any of our plants and the immediate focus is on reinstating
logistical supply chains for raw materials and product delivery. Operations at our three affected
mills, Saiccor, Tugela and Stanger, commenced slowly from 19th July. However, these are
complex plants and the restarting of production must be conducted in a prudent and structured
manner. The three dissolving pulp lines at Saiccor will be restarted in a phased approach and
production output will take a few days to ramp-up to full capacity. Work on the Saiccor
expansion project also resumed on 19th July, but the commissioning timeline has been
negatively impacted and the start-up is now expected to begin in September/early October
2021.
Although the Port of Durban has resumed operations, it is anticipated that export deliveries
could be negatively impacted for an extended period due to congestion and limited availability
of vessel space. This will likely result in protracted delays for dissolving pulp exports.
The financial impact of the temporary closures and associated ramp-up of production at the
three mills is a permanent loss of sales volumes of approximately 28 000 tons of dissolving
pulp and 7 000 tons of paper with an expected negative impact on EBITDA of approximately
R220 million (US$16 million) on the Sappi fourth quarter results.
The information included in this announcement has not been reviewed or reported on by
Sappi’s external auditors.
Sponsor : UBS South Africa (Pty) Ltd
Date: 21-07-2021 01:54:00
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