Sappi announces closure of North American mill

 

TIDMSAZ 
 
RNS Number : 0363Y 
Sappi Ld 
26 August 2009 
 
+-------------------------------------------------------+---------------------+ 
|                                                       | Sappi Limited       | 
|                                                       | Sappi Fine Paper    | 
|                                                       | North America       | 
+-------------------------------------------------------+---------------------+ 
 
 
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 
Boëttger, 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: 
 
 
André F Oberholzer 
Group Head Corporate Affairs 
Sappi Limited 
Tel: [phone] 
Mobile: [phone] 
[e-mail] 
 
Amy Olson 
Corporate Communications Manager 
Sappi Fine Paper North America 
Tel: [phone] 
Fax: [phone] 
[e-mail] 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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