Sappi Announces Intention to Exit Carbonless Paper Market
Press release from the issuing company
JOHANNESBURG--October 9, 2001--Sappi Ltd announced today that it is proposing to end its presence in the carbonless paper market by closing its Transcript mill in Scotland early next year.
According to Mr. Bill Sheffield, CEO of Sappi Fine Paper, "The decision on Transcript is in line with Sappi's proposal to dispose of non-core, underperforming operations in order to focus on its well-invested coated woodfree asset base''.
During the last number of years the carbonless market has been affected by new technologies, which have replaced the need for multipart documentation systems. This has lead to a substantial decrease in demand and over-capacity in the carbonless market.
Sappi is investigating the sale of the Transcript brand to ensure the continuation of supply of this well known product beyond the closure of the mill.
A final decision on these proposals will be taken once Sappi has completed the required consultation programme with employee representatives.
Sappi expects that the eventual closure costs will amount to US$10 million after tax, which would be charged in the December 2001 quarter. There should be no effect on net asset value because of previously raised provisions. The effect on earnings would be negligible.
The Transcript mill manufactures 25,000 tons of carbonless paper annually and employs 203 people.
Sappi is the world's leading producer of coated woodfree paper with production facilities in eight countries on three continents (Europe, North America and Africa), sales offices on five and customers in over 100 countries worldwide.
Sappi ordinary shares trade on the Johannesburg Stock Exchange and may be accessed on Bloomberg under the symbol SAP SJ, and on the Reuters Equities 2000 Service under SAPJ.J. In the US its ADRs trade on the New York Stock Exchange under the ticker symbol SPP (each ADR is equal to one ordinary share). Sappi shares are also traded in London and Frankfurt.
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