Sappi’s strategy recognises the “leadership position of the company in graphic papers markets” and the need to strengthen its position in these markets to deliver maximum value to the company. The continuing and accelerating structural drop in demand for coated papers in Europe and elsewhere has made it impossible for Sappi Europe to fill its capacities adequately and to be sufficiently profitable in its current form. Importantly the current unfavourable market situation is caused by factors that are beyond Sappi’s control.
Taking these market conditions into account, Sappi has undertaken a thorough review of its European production assets. It has concluded that the least disruptive way to adjust its capacity in line with market demand would be to operate fewer machines. Exhaustive analysis indicates that the preferred option to achieve this would be to relocate the entire production output of Paper Machine 2 at Stockstadt mill (some 240,000 tpa of coated graphic paper) to other Sappi paper machines in Europe.
To this end, Sappi Europe has today begun a process of consultation with the competent employee representatives at Stockstadt mill. The task at hand is to identify viable alternatives for Paper Machine 2.
Berry Wiersum, CEO of Sappi Europe commented: “We fully recognise and commend the enormous efforts, both past and present, that employees and the management of Stockstadt mill have undertaken to reduce costs in order to earn better margins. Despite these relentless efforts the situation will not improve in the foreseeable future. We very much regret that we are confronted with this situation and hope that the consultation period can be used to find jointly socially acceptable solutions. At the same time, it is imperative that we not lose sight of the overall objective of improving the competitiveness of Stockstadt mill and securing its future.”
The mill currently employs 760 people, of which up to 150 positions may be impacted by the consultations. Sappi stands ready to provide the required support and to implement the decisions reached as a result of the consultation process.