Sappi concludes consultation process at Stockstadt and starts consultation at Lanaken

The persistent global economic downturn is proving to be much tougher than anticipated with depressed markets, geopolitical instability and weak economic growth combining to put significant pressure on Sappi, particularly in Europe.

In response, Sappi announced on 6 July 2023 the start of a consultation process on the possible closure of Stockstadt Mill. The company says it has completed this process and agreed on the social plan for the employees. In addition, an agreement has been signed for the sale of the site. The closure of the site should be completed during the Q1 2024. Once all closure elements are taken into account, the impact is expected to be cash neutral.

The company said in a release that it continues to be faced with significant overcapacity in graphic paper, forcing them to take extended periods of costly commercial downtime. “As the recent over-stocking by customers reduces it has become clear that demand will not return to previous levels. Combined with input cost pressure, we do not see this situation, caused by factors beyond our control improving in the foreseeable future,” said the statement.

Steve Binnie, CEO, Sappi Ltd, commented, “Sappi continues to position itself for growth and increased profitability in line with our group Thrive25 strategic focus. This includes reducing exposure to the graphic paper segment while expanding Sappi’s presence in  packaging, speciality papers, pulp and biomaterials. Recent investments across our South African, American and European operating businesses demonstrate this priority. We will therefore continue to review the viability of all our operations and make changes when necessary.”

Marco Eikelenboom, CEO, Sappi Europe, stated, “These are globally challenging times and Sappi Europe is faced with overcapacity in graphic paper forcing us to take extended periods of costly commercial downtime. We have therefore decided to inform both the Mill Management and the Works Council that we are today starting the consultation process on the potential closure of the Lanaken Mill. In parallel we are reviewing how best to reduce overall fixed and other overhead costs.”

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