Sappi Finland I Oy Begins Consultations at Kangas Mill in Response to Market Conditions and Lower Demand in Coated Magazine Paper

October 22, 2009 10:09 AM EDT

JOHANNESBURG, Oct. 22 /PRNewswire/ -- In response to the reduction in European consumption of coated magazine paper arising from the global recession it is apparent that the industry is experiencing overcapacity. Sappi has taken a substantial amount of commercial downtime since the beginning of the year in response to a reduction in demand. Sappi Finland I Oy has today announced that it will enter into a consultation process with its Kangas mill employee representatives. The aim of this process is to identify the best way of improving company profitability, which may include a full closure of Kangas mill. The continued level of downtime is no longer considered viable and it is therefore necessary to review production capacity. Possible redundancies would be implemented by the end of the year 2009.

The Sappi Finland I Oy's, Kangas site employs approximately 150 employees employs approximately 800 people throughout Finland.

In the event that the Kangas mill ceases production the Galerie Silk range would be supplied to customers from the Sappi Lanaken mill in Belgium. Sappi would also launch a complementary grade, Galerie Fine Silk, from Sappi Finland I Oy's Kirkniemi mill, thereby widening the customer offer of its coated magazine paper range while ensuring that there is no supply interruption.

Kangas mill, has the capacity to produce 210,000 tonnes of coated magazine paper annually. The consultation does not concern Sappi Finland I Oy's Kirkniemi mill and its Sales Office.

SOURCE Sappi Limited

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