| Wed 26 Aug 2009, 17:00 | | SAP - Sappi Limited - Sappi Fine Paper North America to Permanently Close |
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SAP
SAVVI
SAP - Sappi Limited - Sappi Fine Paper North America to Permanently Close
Muskegon Mill
Sappi Limited
(Registration number 1936/008963/06)
(Incorporated in the Republic of South Africa)
Share code: SAP & ISIN: ZAE000006284
("Sappi" or the "Company")
Press Release
August 26, 2009
Sappi Fine Paper North America to Permanently Close Muskegon Mill
BOSTON and JOHANNESBURG - Sappi Fine Paper North America today announced that it
will permanently cease operations at its coated fine paper mill in Muskegon,
Michigan. The closing will affect approximately 190 salaried and hourly
Muskegon employees, who have been on furlough since the suspension of operations
at the mill, which was announced in March 2009. Prior to that suspension, Sappi
Fine Paper North America operated a single paper machine at the site with an
annual production capacity of 170,000 metric tons.
Sappi will record a charge of approximately US$30 million in the fourth
financial quarter in respect of separation and other closure costs. Of this
amount, an estimated US$10 million relates to non-cash charges. The fixed assets
are fully impaired.
"The global economic downturn has resulted in very weak demand for coated fine
paper worldwide. In North America, industry conditions remain very challenging,
with current year to date shipments of coated wood free paper down 32 percent
from 2007 levels and only modest recovery forecast for 2010," said Ralph
Boettger, Chief Executive Officer of Sappi Limited, the parent of SFPNA. "The
permanent closure of the Muskegon Mill, while an extremely difficult decision to
make, is necessary to ensure that we remain competitive in today`s global
marketplace. This decision is in line with our commitment to substantially
improve Sappi`s profitability and returns in all our businesses."
"We understand the hardship this decision creates for our employees at the
Muskegon Mill. We will be providing separation benefits and job placement
services for our salaried employees and will be commencing discussions with
union representatives regarding the terms of hourly employees` separation
benefits," said Mark Gardner, President and CEO of Sappi Fine Paper North
America. "Our workforce at Muskegon was very dedicated, achieving record
productivity and safety performance in the last year of operation.
Unfortunately, the scale of the site made it difficult to successfully compete
against larger paper mills throughout the world. We will be retaining an adviser
to seek purchasers for the mill not engaged in the manufacture of coated
printing and writing paper."
The cessation of operations at the Muskegon Mill will not affect the product
lines offered by Sappi Fine Paper North America. Since March, products
previously made at Muskegon have been and will continue to be manufactured at
the Company`s other paper mills in Skowhegan, Maine and Cloquet, Minnesota,
including Opus PS, a high bulk to weight web and sheet offering with excellent
surface quality and optics.
"We remain committed to meeting the needs of our customers for high quality,
strongly branded coated products with outstanding service from our mills located
in Maine and Minnesota, as well as Western Europe," Gardner said. "Even with the
suspension of operations at the Muskegon Mill, we have continued to increase our
market position and gain new customers in this weak environment through new
product line extensions and product improvements. With our ongoing focus on
customer service, cash generation and good cost management, Sappi Fine Paper
North America continues to demonstrate its leadership in our market segment."
About Sappi Fine Paper North America
Sappi Fine Paper North America (SFPNA) is a leading North American producer of
coated fine paper used in premium magazines, catalogues, books and high-end
print advertising. Headquartered in Boston, Massachusetts, Sappi Fine Paper
North America is known for innovation and quality. Its brand names, including
McCoy, LOE, Opus, Somerset and Flo, are some of the industry`s most widely
recognized and specified. SFPNA is a division of Sappi Limited (NYSE, JSE, LSE),
a global company headquartered in Johannesburg, South Africa, with manufacturing
operations on four continents in 10 countries, sales offices in 50 countries,
and customers in over 100 countries around the world. Learn more about Sappi
Fine Paper North America at: www.sappi.com/na. For the media kit and past press
releases, visit the "About Us" section of the Web site.
About Sappi Limited
Sappi, a global pulp and paper company headquartered in Johannesburg, South
Africa, is the world`s leading producer of coated fine paper used in the
production of glossy magazines, calendars, annual reports and brochures. The
company has significant businesses in forests, pulp, coated speciality paper,
packaging grades, uncoated fine paper and newsprint in Africa. Sappi is also the
world`s largest producer of chemical cellulose (dissolving pulp) used in the
manufacture of viscose staple fibre and consumer and pharmaceutical products.
With nearly 17,000 employees worldwide and production facilities in nine
countries on four continents, Sappi has customers in over 100 countries and is
listed on the Johannesburg Securities Exchange (SAP), the New York Stock
Exchange (SPP) and the London Stock Exchange (SAZ).
ENDS
Issued by Brunswick South Africa on behalf of Sappi Limited
Tel + 27 11 502 7300
Fax + 27 11 268 5747
For further information contact:
Andre F Oberholzer
Group Head Corporate Affairs
Sappi Limited
Tel: +27 11 407 8044
Mobile: +27 83 235 2973
Andre.oberholzer@sappi.com
Amy Olson
Corporate Communications Manager
Sappi Fine Paper North America
Tel: +1 617.423.5409
Fax: +1 617.368.6580
Amy.Olson@sappi.com
Date: 26/08/2009 17:00:02 Produced by the JSE SENS Department.
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