SAPPI LIMITED - Closure of PM2 at Stockstadt Mill in Germany as well as PM9 and the energy complex at Westbrook Mill in the USA

Closure of PM2 at Stockstadt Mill in Germany as well as PM9” and the energy complex at Westbrook Mill in the USA

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")



Sappi announces the closure of Paper Machine 2 (“PM2”) at its Stockstadt Mill in Germany as
well as Paper Machine 9 (“PM9”) and the energy complex at its Westbrook Mill in the USA.


Sappi Limited today informed its employees and stakeholders of two decisions which will
cumulatively remove capacity, reduce costs, improve machine utilization and increase
competitiveness.

Sappi Stockstadt Mill

On 11 February 2020, Sappi Europe announced the initiation of a process to determine the future of
PM2 at its Stockstadt Mill in Germany, in view of the continuing decline of the Coated Woodfree
paper market. Following an exhaustive consultation process an agreement was reached with mill
employee representatives to permanently close PM2, which has a Coated Woodfree paper production
capacity of 240 000 tons per annum. Stockstadt will now focus on its strong and growing uncoated
woodfree offering. Approximately 170 employees will leave the company with production expected to
cease on 30 September 2020. The once-off restructuring charges amount to approximately €27 million
(€15 million cash; € 12 million non-cash). The estimated annual saving will be approximately €15
million.

Sappi Westbrook Mill

After a period of review, Sappi North America has decided to permanently shut PM9 and the majority
of the energy complex at its Westbrook Mill in the State of Maine. Sappi will shift PM9’s base paper
production to its state-of-the-art mills in Cloquet, Minnesota and Skowhegan, Maine. Approximately
75 employees will be impacted. The impacted assets are expected to close by end of calendar year
2020. As a result of these actions, a restructuring charge of approximately US$14 million (US$11
million cash; US$3 million non-cash) is expected during Sappi’s fourth quarter, in addition to
approximately US$8 million of accelerated depreciation to be recorded during the second half of
calendar 2020. The estimated annual saving will be approximately US$10 million.

Commenting on the decisions, Sappi CEO Steve Binnie said: “These steps demonstrate our
commitment to taking decisive action to reduce costs and respond to market dynamics. These mills
will now be better placed to compete in the marketplace and deliver increased returns.”
                                                                                          Page 2 of 2



The information in this announcement has not been reviewed and reported on by Sappi’s external
auditors.


09 July 2020


Sponsor : UBS South Africa (Pty) Ltd

Date: 09-07-2020 04:00:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.