Sappi Plans to Close Adams Mill in Port Elizabeth

May 24, 2011 - Sappi Southern Africa said that it plans to cease operations at Adamas Mill in Port Elizabeth, South Africa in response to difficult market conditions and the continuing rise of input costs.

The Adams Mill has an annual capacity to produce 40,000 tons of uncoated woodfree paper.

Currently the company is in talks with staff and relevant union representatives.

Sappi Southern Africa acquired the Adamas Mill in 1964. It originally produced board for the motor industry and subsequently uncoated writing and printing papers with a significant percentage of recycled fiber.

Sappi said its proposed plan to close the Adams Mill is an effort to match production capacity to market demand.

"We fully recognize and commend the enormous past and ongoing efforts that employees and mill management have undertaken to reduce costs and improve profitability," said Alex Thiel, CEO of Sappi Southern Africa. "However, the mill's size, technical age and high costs of energy and fiber have made it necessary to initiate a review.

"A final decision will only be made once the consultation process is completed towards the end of July," he added.

Sappi said the potential closure of Adamas Mill would have no impact on customers as production will be moved to Sappi's Enstra and Tugela Mills.

Sappi will maintain its presence in the Eastern Cape as regards marketing and sales as well as the collection and purchase of collected fiber (used for recycled paper) through Sappi ReFibre.

Adamas Mill is a small, non-integrated speciality paper mill. The mill purchases wastepaper and fully bleached hard- and softwood fibers from other pulp producing mills in the Sappi group. The mill operates two paper machines which produce uncoated woodfree recycled board grades from 100% waste furnish (PM3), as well as uncoated woodfree paper (PM4).

SOURCE: Sappi Southern Africa