The announcement is a response to adverse market conditions, as well as the cumulative severe impact of fire damage over the past few years, in particular the fires of August 2008 which destroyed 40% of the Usutu timber crop.
"It has become apparent that the Sappi Usutu Pulp Mill is no longer sustainable," Sappi said in a statement to the JSE.
It said it would begin the process of consulting with staff and all other relevant stakeholders regarding its intention to close the Usutu Pulp Mill on January 31, 2010.
"With the closure of the mill Sappi would also exit the unbleached softwood flash-dried pulp market served by Usutu Pulp Mill," Sappi said.
The mill has a capacity of 190 000 tonnes annually and employs about 600 people directly.
Sappi said it would continue to seek future beneficiation opportunities for the profitable utilisation of the Usutu forests.
This could include the introduction of new investors," it said.
Published courtesy of
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