Chairman's statement for AGM

RNS Number:7464Z
Sappi Ld
1 March 2001



Chairman's statement for Annual General Meeting: 1 March
2001

There continues to be some uncertainty in our markets.  Pulp
prices declined slightly and paper prices in North America
are under pressure after the sharp decline in demand that
the industry experienced in November and December.  This has
resulted in continued pressure on our North American
business and in Europe we have taken substantial commercial
downtime to ensure that we maintain appropriate inventories.
On the other hand the Forest Products business has benefited
from a reasonably strong domestic economy and the weaker
exchange rate compared to the US dollar.  There is a great
deal of evidence that the industry as a whole is managing
capacity and inventory better than in the past.

We expect the weakness in the market to continue through the
first quarter of this calendar year, and current indications
are that there will be pressure on our operating income.
Reduced finance costs, lower taxation charges in Europe, and
the buy back of some 4% of our shares, which reduces the
number of shares to be serviced, should enable us to produce
earnings per share for the year similar to those of the
previous year.

However, as we report in US dollars, but more than half of
our business is conducted in other currencies, mainly the
Euro, changes in exchange rates could influence earnings
materially.