http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.14Change: -0.02
R/$ = 12.15Change: 0.15
Au 1186.09 $/ozChange: 0.29
Pt 1121.00 $/ozChange: -19.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
May 10, 2012

Sappi’s SA paper division still underperforming

Back
Africa|Environment|Packaging|Sappi|Sustainable|Africa|Europe|North America|United States|USD|Cloquet Mill|Enstra Mill|KwaZulu-Natal Saiccor Plant|Ngodwana Mill|Tugela Mill|Chemical Cellulose|Chemical Cellulose Division|Maintenance|Packaging|Paper And Packaging|Ralph Bo|Operations|Minnesota
Africa|Environment|Packaging|Sappi|Sustainable|Africa|||||Maintenance|Packaging|||Operations|
africa-company|environment|packaging-company|sappi|sustainable|africa|europe|north-america|united-states|usd|cloquet-mill|enstra-mill|kwazulu-natal-saiccor-plant|ngodwana-mill|tugela-mill|chemical-cellulose|chemical-cellulose-division|maintenance|packaging|paper-and-packaging|ralph-bo|operations|minnesota
© Reuse this




Paper and packaging group Sappi said on Thursday that, while its chemical cellulose business continued to perform strongly during the second quarter of 2012, its paper division underperformed on the back of a competitive environment in terms of price, costs and volumes.

However, Sappi CEO Ralph Boëttger said the current restructuring of the paper and packaging operations were on track, the benefits of which would show during the third quarter of 2012.

The restructuring, which aimed to improve profitability, streamline sales and marketing and deal with the tough market conditions that resulted in poor performance over the past three years, included the closure of the pulp mill at Enstra mill, the kraft pulp mill at Tugela mill and a 10 000 t kraft paper machine at Tugela mill.

It would also result in the loss of about 800 jobs, some of which would be through voluntary retrenchments or retirements.

However, Boëttger was optimistic about the improving chemical cellulose division, which he hoped could potentially create more jobs.

The cellulose division, which accounted for most of the operating profit in Southern Africa, generated R385-million in earnings before interest, taxes, depreciation and amortisation – a margin of about 30%.

Sappi currently supplied between 15% and 20% of the market demand from its KwaZulu-Natal Saiccor plant. It reported that the $240-million expansion of its Ngodwana mill, in Mpumalanga, and the $170-million conversion of the Cloquet mill, in Minnesota, US, were on track to start during the third quarter of 2013. The two mills would increase the group’s cellulose capacity to over 1.3-million tons a year.

Meanwhile, Sappi reported that the group operating profit for the second quarter increased quarter-on-quarter to $125-million, from $100-million in the first quarter.

The company’s Southern African operations held a steady operating profit of $53-million, while Europe generated $49-million and North America reached $24-million, compared with the first-quarter performance of $29-million and $10-million respectively.

“The improving trend in operating performance continued in the quarter, with the European and North American businesses in particular showing good improvement,” he said.

This followed a “relentless” focus on cost reduction, as market conditions for coated paper have been weaker than the in corresponding quarter of the prior year, enabling margins to be maintained or widened, particularly in Europe.

The group achieved a profit of $58-million, up year-on-year from a loss of $74-million in the second quarter of 2011. Earnings a share increased to 11c for the March quarter, compared with 7c earned during the first quarter, and the loss of 14c recorded during the corresponding quarter the year before.

“We are confident that the actions we have taken and that we continue to take will lead to a sustainable and continuous improvement in performance going forward,” said Boëttger.

However, he warned that the third quarter was “historically and seasonally the weakest” quarter, and would be further impacted by planned yearly maintenance closures at its mills.

Edited by: Mariaan Webb
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
 
Latest News
Updated 4 hours ago State-owned freight transport group Transnet has announced that Richard Vallihu has been appointed CEO of Transnet National Ports Authority (TNPA) from April 1, following the retirement of Tau Morwe.   Vallihu, who has hitherto headed Transnet Engineering (TE), would...
Eskom chairperson Zola Tsotsi
Updated 5 hours ago The chairperson of South African power firm Eskom said he faced a vote of confidence by the utility's board late on Monday, after being accused of acting improperly by suspending the chief executive. State-owned Eskom has implemented regular power cuts this year to...
Updated 5 hours ago Despite the “overwhelming” positivity surrounding the majority of the changes contained within the Private Security Industry Regulatory Authority (PSIRA) Amendment Bill, one clause has “unintended consequences” capable of damaging South Africa as an attractive...
More
 
 
Recent Research Reports
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
 
 
 
 
 
This Week's Magazine
Projected capital expenditure (capex) in the South African automotive assembly industry should reach a record R7.48-billion this year, says the National Association of Automobile Manufacturers of South Africa (Naamsa) in its 2014 fourth quarter business review. Capex...
After several years of navigating project-threatening red tape and currency fluctuations, the 4.4 MW Bronkhorstspruit biogas power plant, which will supply clean energy to a leading automotive manufacturer in Gauteng, is expected to enter production before June....
RESOURCEFUL The raw material for the pilot plant would be supplied from the dissolving wood pulp plants at Sappi’s Saiccor and Ngodwana mills, in South Africa, and the Cloquet mill, in the US
South African paper and pulp producer Sappi reported earlier this month that it would build a pilot plant for the production of low-cost Cellulose NanoFibrils, or CNF (nanocellulose) at the Brightlands Chemelot Campus in Sittard-Geleen in the Netherlands.
The long-term outlook for Nigeria is a country that has the potential to be very strong. So affirmed International Monetary Fund (IMF) Nigeria Mission Chief and Senior Resident Representative Dr Gene Leon on recently. "But we are starting from a point of huge...
Poor infrastructure planning and inadequate maintenance are becoming increasingly problematic for new developments and the associated infrastructure required to support such developments. In many urban and rural municipalities, the state of infrastructure has been...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96