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Sappi Considers Decreasing Production Production in Europe
Johannesburg, South Africa, 05 August 2008 -- /PRNewswire/ -- Sappi Fine Paper Europe , announced today that as a result of continued overcapacity in the European coated fine paper market, it has not proved possible to recover the sharply increased costs of raw material and energy over recent years. Sappi has therefore undertaken a review of its European production activities.

Despite Sappi's best efforts to curb costs, Blackburn mill, in Lancashire, northwest England, and the PM5 at Maastricht mill, in the Netherlands, have been unable to generate acceptable returns. Consequently, Sappi has entered into a consultation process with employee representatives at both facilities with a view to cease production at Blackburn mill and PM5 at Maastricht mill.

The sales office for coated fine paper in the United Kingdom will continue operations, as will the Specialties Sales and Marketing Organization.

In the event that these production lines do cease to produce, customers will be offered comparable products and services from other Sappi sites in Europe and no supply interruption would be anticipated.

Blackburn has the capacity to produce 120,000 tons of graphic coated fine paper annually. Paper machine PM5 at Maastricht has the capacity to produce 60,000 tons of specialty paper annually.

If the closure of Blackburn and PM5 at Maastricht were to happen, and as a result of reallocation of products, Sappi would reduce its graphic coated fine paper capacity by 190,000 tons.

About Sappi Limited

A global leader in the pulp and paper industry, Sappi Limited (NYSE, JSE, LSE) conducts its business through two business units, Sappi Fine Paper and Sappi Forest Products. Sappi Fine Paper, operating in Europe, North America, and South Africa, produces a wide range of coated fine paper brands with an international reputation for quality and innovation. The company also produces a range of uncoated graphic and business papers, coated and uncoated specialty papers, and casting release papers. Sappi Forest Products owns or manages approximately 540,000 hectares of plantations through Sappi Forests; is a leading Southern African fully integrated pulp, packaging paper, and newsprint business through Sappi Kraft; and is the world's leading producer of chemical cellulose used in the manufacture of viscose fiber through Sappi Saiccor; Sappi Trading, based in Hong Kong, operates a trading network for the international sales and distribution of the products of the two divisions outside their core operation regions. For more information, visit: www.sappi.com.

Source: Sappi Fine Paper Europe

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