Oct 12, 2012
400 jobs on the line as Sappi mothballs paper machineBack
Natal|Packaging|Sappi|KwaZulu-Natal-based Tugela Mill|Tugela Mill|Energy|Increased Energy|Lightweight Containerboard Products|Manufacturing|Packaging|Paper And Packaging|Products|Service|PM2
© Reuse this
Although expected to be substantially lower, Sappi pointed out on Friday that the eventual number of positions impacted by the suspension would be known at the conclusion of the 60-day consultation period.
“Sappi remains committed to its approach that retrenchments are a last resort, and as such, will work with staff to investigate options to minimise retrenchments,” the company assured.
PM4 was manufacturing lightweight containerboard products; however, the current cost structure and market conditions did not allow it to operate profitably.
Sappi said the Tugela mill had not delivered satisfactory financial returns in recent years, despite ongoing corrective actions and interventions to address increased energy, labour and raw materials costs.
The mill’s competitiveness 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.
The company indicated that suspended production at PM4 would enable the repositioning of the Tugela mill’s cost structure and ensure the sustainability of its other paper machine, PM2, which produced a range of fluting and liner products.
Sappi said it would be in a position to restart PM4 when market conditions improved, adding it was confident that, given current market conditions, sufficient capacity still existed at the mill to meet all local containerboard requirements.
No disruptions in supply as a result of the closure of PM4 were anticipated.
During 2011 and 2012, Sappi undertook various measures to return the Tugela mill to profitability, including closing the PM3 paper machine, the kraft continuous digester pulp circuit, right-sizing the mill to service the remaining assets and ceasing sack kraft production at PM4.
Edited by: Mariaan Webb© Reuse this Comment Guidelines (150 word limit)
Creamer Media Senior Researcher and Deputy Editor Online
Other Forests News
Article contains comments
The Democratic Alliance (DA) on Sunday called on the Gauteng government to take urgent steps to avert a looming agriculture crisis in the province and its impact on food security. The Gauteng agriculture and rural development department should as a matter of urgency...
The Department of Trade and Industry (DTI) has published the draft amended broad-based black economic empowerment forest sector codes for public comment. Interested parties had until January 6 to comment on the proposed codes, which were aimed at finalising the Codes...
Dr Danie Cronjé will retire as Sappi chairperson at the end of February 2016. He was appointed to the board in January 2008 and took up the position of chairperson in March of that year.
Updated 5 minutes ago Following hot on the heels of the listing of MTN Zakhele earlier this month, petrochemicals company Sasol’s broad-based black economic-empowerment (BBBEE) fund Sasol Inzalo Public, followed suit on Tuesday – the second company to list on the Empowerment Segment of...
Updated 36 minutes ago Glencore's struggling South African unit, Optimum, which is currently embroiled in a dispute over the price of coal with power utility Eskom could be sold off, a firm appointed to rescue the troubled business said on Tuesday. "There was buying interest that is not a...
Updated 2 hours 2 minutes ago Up to 60 people were injured when a substation near Pinedene train station in Centurion exploded on Tuesday morning. ER24 spokesperson Pieter Rossouw said initial reports indicated it was a train crash, but this was incorrect.
Recent Research Reports
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
The BMW Group will invest R6-billion at BMW Group South Africa’s (BMW SA’s) Rosslyn plant to produce the next-generation X3 sports-activity vehicle (SAV) for the local and export markets. Rosslyn will continue production of the current 3 Series through its lifecycle,...
The lack of consequences for poor performance and transgressions on the part of contractors remains a significant hurdle to tackling South Africa’s service delivery challenges, delegates heard at the Consulting Engineers South Africa Infrastructure Indaba, on...
City of Ekurhuleni executive mayor Mondli Gungubele earlier this month officially named the city’s bus rapid transit (BRT) system, Harambee.
About 58% of unstructured data stored by companies is dark data, which means that the value or regulatory importance of the data has not been determined. Subsequently, most of the stored data add costs, rather than increasing revenue or reduce regulatory risks, says...
Effective logistics, import/export and manufacturing consulting services require detailed industry knowledge and experience, but can add significant value to these industries by providing expert advice on various technical elements in their value chains, says...