Sappi Reviews European Production Activities

Sappi Fine Paper Europe contemplates cessation of production at its Blackburn
Mill and intends to cease production from Paper Machine (PM5) at its
Maastricht Mill in response to overcapacity and unrelenting input cost
pressure

JOHANNESBURG, South Africa, Aug. 5 /PRNewswire/ -- Sappi Fine Paper Europe
(JSE: SAP, NYSE: SPP), announced today that as a result of continued
overcapacity in the European Coated Fine Paper market, it has not proved
possible to recover the sharply increased costs of raw material and energy
over recent years. Sappi has therefore undertaken a review of its European
production activities.
Despite Sappi's best efforts to curb costs, Blackburn Mill, located in
Lancashire, North West England and the PM5 at Maastricht Mill, in the
Netherlands, have been unable to generate acceptable returns. Consequently,
Sappi has entered into a consultation process with employee representatives at
both facilities with a view to cease production at Blackburn Mill and PM5 at
Maastricht Mill.
The sales office for Coated Fine Paper in the UK will continue operations
as will the Specialties Sales and Marketing Organization.
In the event that these production lines do cease to produce, customers
will be offered comparable products and services from other Sappi sites in
Europe and no supply interruption would be anticipated.
Blackburn has the capacity to produce 120,000 tons of Graphic coated fine
paper annually. Paper machine PM5 at Maastricht has the capacity to produce
60,000 tons of specialty paper annually.
If the closure of Blackburn and PM5 at Maastricht were to happen, and as a
result of reallocation of products, Sappi would reduce its Graphic coated fine
paper capacity by 190,000 tons.
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About Sappi Limited
A global leader in the pulp and paper industry, Sappi Limited
(NYSE, JSE, LSE) conducts its business through two business units, Sappi Fine
Paper and Sappi Forest Products. Sappi Fine Paper, operating in Europe, North
America and South Africa, produces a wide range of coated fine paper brands
with an international reputation for quality and innovation. The company also
produces a range of uncoated graphic and business papers, coated and uncoated
specialty papers, as well as casting release papers. Sappi Forest Products
owns or manages approximately 540,000 hectares of plantations through Sappi
Forests; is a leading Southern African fully integrated pulp, packaging paper
and newsprint business through Sappi Kraft; and is the world's leading
producer of chemical cellulose used in the manufacture of viscose fiber
through Sappi Saiccor; Sappi Trading, based in Hong Kong, operates a trading
network for the international sales and distribution of the products of the
two divisions outside their core operation regions. For more information,
visit: www.sappi.com.
SOURCE Sappi Fine Paper Europe

Andre F Oberholzer, Group Head Corporate Affairs of Sappi Limited,
+27-11-407-8044, (cell) +27-83-235-2973, Andre.oberholzer@sappi.com; or
Claudia Hammerich, Corporate Communications of Sappi Fine Paper Europe,
+32-267-69784, (cell) +32-0472-61866, Claudia.hammerich@sappi.com