According to Sappi, the significant reduction in prices in all major markets is to blame for the company’s economic position, despite an improvement over last year.

Fourth quarter sales were up 6.7 per cent from prior year; operating costs were well controlled; and cash generated by operations was up 28 per cent from prior quarter to US$159 million.

The company will close facilities in North America and says that a further 250 of the job losses will be in Europe. The company’s London sales office will also be closed. However there will be no plant closures in Europe says, Jonathan Leslie, Sappi Paper CEO.

“We have embarked on a number of actions to improve the supply demand balance and to offset rising costs in these tough markets. At Westbrook mill in the US we will close our highest cost paper machine and transfer the production of coated fine paper to other mills. The mill will in future focus on our Ultracast and casting release paper business”, says Leslie.

“We have stopped operations at our Clan sawmill in South Africa. The sawmill was non-core, relied on old technology and had an uncompetitive log supply. I have also decided to restructure the Sappi Fine Paper division. In addition we plan to reduce our staffing levels by a further 100 people in North America and by 150 people in Europe in 2004”.

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