Sappi to Close Adamas Paper Mill in South Africa at end-August

Aug. 3, 2011 - Sappi Southern Africa said that it will shut down its Adamas paper mill in Port Elizabeth, South Africa. The permanent closure of the mill is expected to be finalized at the end of August.

Sappi on May 24 of this year announced that it had plans to close the mill.

Sappi Southern Africa has concluded an agreement with its Adamas mill employee representatives and redundancy notices have been issued to staff which specifies redundancy terms and includes provisions for outplacement and training support for all employees, to ensure that people have the best possible opportunity to secure new employment.

The Adamas mill employed 213 people and has operated in Port Elizabeth for 47 years.

Alex Thiel, CEO of Sappi Southern Africa commented: "As I mentioned when we began the consultation process, we fully recognise and commend the enormous efforts that employees and mill management have put in to try to make the mill competitive and to find a way to create a future for the mill," said Alex Thiel, CEO of Sappi Southern Africa. "Unfortunately these efforts have been unsuccessful."

"We recognize this is a difficult decision affecting our employees, their families and the local communities and we would like to thank all of them for their hard work and support. Unfortunately this action became necessary to address the severe cost pressure that we are facing and the uncompetitive nature of this old and small mill," Thiel said.

Volumes produced at the mill have been transferred to Sappi Enstra and Sappi Tugela mills, the company said.

Sappi expect to take a charge of approximately US$5 million in respect of these closure costs in the fourth financial quarter ended September 2011.

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

SOURCE: Sappi Southern Africa

See related story:
Sappi Plans to Close Adamas Mill in Port Elizabeth (5/24/2011)