Sappi Southern Africa Commences Consultations Regarding Cost Reduction and Efficiency Improvement Initiatives at Its Kraft and Fine Paper Mills in South Africa

• Press Release
• Source: Sappi Southern Africa
• On 10:32 am EDT, Monday August 31, 2009

JOHANNESBURG, Aug. 31 /PRNewswire-FirstCall/ -- Sappi Southern Africa (NYSE: SPP - News) today began a process of consultations with employees and trade unions at its Kraft and Fine Paper mills regarding cost reduction and efficiency improvement initiatives to ensure that the company is well positioned to take full advantage of the expected improvement in operating conditions and markets.

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"We will begin consultations with our employees at our Tugela, Ngodwana and Enstra mills regarding proposals for cost reduction and efficiency improvement initiatives to ensure that we meet our stated objectives of improved profitability and delivering acceptable returns," commented Jan Labuschagne, Chief Executive Officer of Sappi Southern Africa. "The proposed actions are required to successfully meet the challenges of the depressed economic conditions we are experiencing in the domestic and export markets for Fine Paper and Kraft products. These actions will not impact on our ability to meet customer demand or current commitments." he continued.

"Any decision which may lead to retrenchments remains difficult and one we only consider as a last resort. We do not expect this to affect more than 400 employees across the three mills. These initiatives will ensure that we are strongly positioned to take full advantage of any improvements in our markets and in economic conditions in general," he concluded.

About Sappi Limited

A global leader in the pulp and paper industry, Sappi Limited (NYSE, JSE, LSE) conducts its business through two business units, Sappi Fine Paper and Sappi Forest Products. Sappi Fine Paper, operating in Europe, North America and South Africa, produces a wide range of coated fine paper brands with an international reputation for quality and innovation. The company also produces a range of uncoated graphic and business papers, coated and uncoated specialty papers, as well as casting release papers. Sappi Forest Products owns or manages approximately 540,000 hectares of plantations through Sappi Forests; is a leading Southern African fully integrated pulp, packaging paper and newsprint business through Sappi Kraft ; and is the world's leading producer of chemical cellulose used in the manufacture of viscose fibre through Sappi Saiccor; Sappi Trading, based in Hong Kong, operates a trading network for the international sales and distribution of the products of the two divisions outside their core operation regions. For more information, visit: www.sappi.com.

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