Sappi to Permanently Close Muskegon, MI Mill

Aug. 26, 2009 - Sappi Fine Paper North America today said that it will permanently cease operations at its coated fine paper mill in Muskegon, Michigan.

The closure of the mill will affect approximately 190 salaried and hourly Muskegon employees, who have been on furlough since the mill was idled April 1, 2009.

A single paper machine had been in operation at the mill prior to April 1. The machine, PM 5, has an annual production capacity of 170,000 metric tons of text and cover weight coated woodfree papers used in annual reports, brochures and catalogs.

"The global economic downturn has resulted in very weak demand for coated fine paper worldwide," said Ralph Boettger, CEO of Sappi Limited, the parent of Sappi Fine Paper NA. "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.

"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," Boettger said.

Mark Gardner, president and CEO of Sappi Fine Paper NA said, "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."

"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," Gardner said.

Sappi said the closure of the Muskegon Mill will not affect the product lines offered by the company.

Products previously made at Muskegon have been and will continue to be manufactured at Sappi's other paper mills in Skowhegan, Maine and Cloquet, Minnesota, the company noted.


See related story:
- Sappi to Suspend Operations at Muskegon Mill in MI (3/3/2009)

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