Johannesburg - Paper maker Sappi [JSE:SAP] says it will mothball one of its paper
machines (PM4) at its Tugela Mill in KwaZulu-Natal - a decision that may result
in the loss of jobs at the mill.
In total just over 400 staff have received Section 189
notices‚ although the eventual number of positions that will be affected will
be substantially lower‚ the company said in a statement.
Sappi said the decision would enable Tugela Mill to
reposition its cost structure and ensure the sustainability of its other paper
machine (PM2) which produces a range of fluting and liner products.
“Despite on-going corrective actions and interventions to
address increased energy‚ labour and raw materials costs‚ the Tugela Mill has
not delivered acceptable financial returns over the past number of years. In
recent times the competitiveness of the mill has further been challenged by
overcapacity in the local paper market‚ an influx of imported products‚ weak
demand for certain papers and depressed selling prices.”
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