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Sappi mothballs Tugela Mill

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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