Shutting down the Blackburn mill would remove 120 000 t/y of graphic coated fine paper from the European market, which is currently in an oversupply of some two-million tons a year, corporate affairs head André Oberholzer said.

Sappi is the world's biggest producer of the paper, on which glossy magazines and company annual reports are printed, and Oberholzer said that he did not see the supply surplus lasting much longer.

It had already led to bankruptcies, as well as competitors announcing production cuts.

The Mondi Group had shut a mill in Hungary this year, and newswire Bloomberg reported that other competitors, Stora Enso Oyj and UPM- Kymmene Oyj, had also reduced production.

"This isn't something that we think is going to be around in a couple of years' time," Oberholzer said in a telephone interview.

However, he called on other producers of the paper to help reduce the market oversupply, saying, "Everybody needs to do their piece".

The Blackburn mill represented about 5% of Sappi's European graphic paper business.

Meanwhile, the machine that the LSE- and JSE-listed company was closing at its Dutch Maastricht mill had reached the point where the company would have to completely rebuild it, or close it down, stated Oberholzer.

The machine had a 60 000-t/y capacity, and made specialty paper for labels, tea bags and tissue paper used in wrapping. Sappi would move this production to another unspecified site in Europe, he said.

The company's sales office for coated fine paper in the UK would remain open, as will the specialities sales and marketing organisation.

No supply interruption to customers was anticipated because of Sappi's actions.

"If the closure of Blackburn mill and PM 5 at the Maastricht mill were to happen, and as a result of reallocation of products, Sappi would reduce its graphic coated fine paper capacity by 190 000 t," it said in a statement.