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Sappi Chairman calls for responsible price increases

Press release from the issuing company

Nov 1, 2006 -- Sappi Chairman Eugene van As, addressing an audience of the world’s best printers and senior merchant partners at the annual Sappi International Printers of the Year awards, said that printers, merchants and paper-makers alike had a challenge to manage the inevitable increase in prices of paper products and therefore print, in a responsible manner to ensure that there was not a disruption of the supply chain. Van As applauded the 33 finalists, all regional award winners, for their commitment to print excellence and the outstanding quality of their work before announcing the eventual 9 Sappi International Printers of the Year. He also reminded the audience of top printers and merchants of the effectiveness of print-based communication and the benefits of all parties – designers, printers, merchants and paper makers - working together to serve the needs of the end-user. Turning to the future of the industry, van As reminded the audience “it is absolutely essential that your basic raw materials suppliers again become profitable and viable so that they can invest in the future. There is a great deal of responsibility on all of our shoulders to make sure that the inevitable change in prices, which has to and will happen to restore acceptable margins, happens in a gradual and structured way so that we do not have violent swings in prices which indeed damaged your (printers) business, your customer’s business and our business a decade ago.” He indicated that prices will rise, particularly in Europe. In response to a question, he said that operating rates were in the mid-90% and rising. He believed it was essential for the industry that there was a gradual price rise through the supply chain avoiding the disruptive effect of excessive price increases. He concluded that there is a responsibility on all members of the supply chain to manage the price rise individually but responsibly.

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