Paper and packaging group Sappi has confirmed that there was no material damage to any of its plants as a result of the recent civil unrest experienced in parts of South Africa.
However, the company did incur a permanent loss of sales volumes of about 28 000 t of dissolving pulp (DP) and 7 000 t of paper, with an expected negative impact on earnings of about R220-million, or $16-million, on the fourth quarter financial results.
Three of its mills, Saiccor, Tugela and Stanger, in KwaZulu-Natal, and associated logistical supply chains, were halted at the height of unrest, but have started to resume operations from July 19 in a prudent and structured manner.
Specifically, three DP lines at the Saiccor mill will be restarted in a phased approach and production output will take a few days to ramp up to full capacity.
Sappi has also resumed work on the Saiccor expansion project, however, its commissioning has been delayed and will now start towards the end of September or early October.
The company explains further that although the Port of Durban has resumed operations, it is expected that export deliveries could be negatively impacted for a longer time owing to congestion and limited availability of vessel space. This may result in protracted delays for DP exports.