BRUSSELS -- Sappi Fine Paper Europe has today announced it will shut down its Kangas paper mill in Finland. The permanent closure of its Kangas mill is expected to take place no later than the early part of the first calendar quarter of 2010.

Sappi Finland I Oy concluded an agreement with its Kangas mill employee representatives on Wednesday 9 December 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 Kangas site employs around 150 employees.

The plant has operated in Finland for 137 years. "We recognize this is a difficult decision affecting our employees, their families and the communities surrounding the mill," commented Berry Wiersum, CEO of Sappi Fine Paper Europe. "Unfortunately this action was necessary to address the impact of the global recession, which has caused a structural drop in demand for mechanical coated paper."

Sappi is together with Jykes and Jyvaskyla town investigating the possibility to utilize the site as an industrial area in the future.

The volumes produced at the mill, will be transferred to Sappi Lanaken and Sappi Kirkniemi. The Galerie Silk range will be supplied to customers from the Sappi Lanaken mill in Belgium and a complementary grade, Galerie Fine Silk, will be introduced from the Sappi Kirkniemi mill thereby widening Sappi's coated magazine paper range. There will be no supply interruption to customers during the mill closure and transfer of production.