Johannesburg - Paper maker Sappi [JSE:SAP] will stop production
of coated graphic paper at its Biberist paper mill in Switzerland by end July,
it said on Thursday.
Sappi, the world's largest maker of fine paper used in
glossy magazines such as Vogue, said in March it was considering closing the
mill due to tough market conditions, coupled with rising input costs.
"After due and thorough consideration during the
consultation process with local employees ending on 16 May 2011 the definitive
decision to discontinue the coated graphic paper production was taken," it
Sappi said that with the stopping of coated graphic paper
production at Biberist mill, the company will reduce its coated graphic paper
capacity by 500 000 tonnes per annum.
The company said it continues to investigate possibilities
for the sale and alternative industrial use of the site.
Sappi said there would be no supply interruption of coated
paper to customers during the transfer period.
Sappi also said a decision on the future of paper machines
No 6 and 9 and associated departments at the mill has been postponed in case
potential acquirers are interested to convert the mill to alternative products.
"However, those employees working on paper machine No 8
and associated people in finishing and supporting departments will be served
notice of redundancy by the end of May," it said.
The company added that a decision concerning the remaining
employees will be made by the end of July.
The Biberist mill employs around 550 employees in total,