Sappi paper plant in Muskegon closing for 6 months
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MUSKEGON, Mich. (AP) — Sappi Fine Paper North America says it will suspend operations at its coated-paper mill in Muskegon for at least six months starting April 1, furloughing about 190 salaried and hourly employees there.
The company said Monday it also will permanently eliminate about 70 salaried positions at other North American locations, effective immediately.
Sappi spokeswoman Amy Olson says a skeleton crew will continue working in Muskegon during the shutdown.
The company issued a news release saying the decisions stem from the economic downturn and slumping demand.
Officials say if the market conditions improve sufficiently, they will resume operations in Muskegon.
Parent company Sappi Ltd. is based in Johannesburg, South Africa.
source: http://www.mlive.com/newsflash/michigan/index.ssf?/base/business-20/123601947676390.xml&storylist=michigannews
Sappi closes North American paper mill, expects operating loss
As global markets continued to deteriorate, paper and pulp producer Sappi on Monday warned that it had experienced lower demand and weaker pricing in some markets post the release of its first-quarter results in February, prompting it to suspend operations at a North American paper mill.
Reporting on the group’s results for the first quarter of the year on February 2, CEO Ralph Boëttger told Engineering News Online that it was very difficult to forecast what future demand for its products would look like.
Sappi nonexecutive chairperson Dr Danie Cronje on Monday told shareholders at the group’s annual general meeting that it had expected some improvement in demand for its products.
However, there had been no improvement in market conditions, so far, in the second quarter, the company reported in a statement to shareholders, adding that it was expecting to make an operating loss before special items in the second quarter of the year.
The group was now certain that the rest of 2009 would remain challenging, saying that it would focus on dealing with the tough market conditions.
“In light of current challenging market conditions and lack of visibility about future market developments we are prioritising cash generation and liquidity,” Cronje told shareholders, adding that each of the group’s operating business was implementing production curtailment.
The demand for coated fine paper in Europe had, to date, deteriorated further, with price increases to be implemented by the end of March.
A curtailment in the production of the European businesses would remain in place for the rest of the year, as demand levels would remain “substantially below” that of the 2008 financial year.
Meanwhile, Sappi would suspend operations at the Muskegon mill, in North America, as demand levels for coated fine paper in the region were weaker than in Europe.
Prices had also weakened further, prompting the suspension of the 170 000-t mill.
Even the Southern African businesses, which had previously seen less deterioration, were now facing lower demand for newsprint and packaging paper, stated Sappi.
Source: http://www.engineeringnews.co.za/article/sappi-closes-north-american-paper-mill-expects-operating-loss-2009-03-02
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