Jobs under threat as Sappi cuts costs at mills

About 400 jobs are under threat as Sappi Southern Africa consults employees on reducing costs and improving efficiency at its kraft and fine paper mills in South Africa, the company said on Monday.

“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,” said Jan Labuschagne, chief executive officer of Sappi Southern Africa, on Monday.

“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,” he said.

“These actions will not impact on our ability to meet customer demand or current commitments.”

Labuschagne said any decision that might lead to retrenchments remained difficult and one the company would only consider as a last resort.

“We do not expect this to affect more than 400 employees across the three mills,” he said.

He said the initiatives would ensure the company was strongly positioned to take full advantage of any improvements in its markets and in economic conditions in general.—Sapa