Sappi has started consulting labour about closing down its Adamas Mill in Port Elizabeth, the paper and packaging company said on Monday.
” … The mill’s size, technical age and high costs of energy and fibre have made it necessary to initiate a review,” Sappi Southern Africa CEO Alex Thiel said in a statement.
“A final decision will only be made once the consultation process is completed towards the end of July.”
Sappi said Adamas, which it acquired in 1964, had high manufacturing costs associated with a small mill. It produces about 40 000 tons of paper per annum, out of a total regional capacity of over one million tons per year.
It originally produced board for the motor industry and subsequently uncoated writing and printing papers with a significant percentage of recycled fibre, Sappi said.
“The potential closure of Adamas Mill would have no impact on customers as production will be moved to Sappi’s Enstra and Tugela Mills.”
Sappi said it would thus improve its variable costs by shifting production closer to its main South African markets and raw material sources.
Sappi would still have marketing and sales functions in the Eastern Cape, and still collect and buy fibre used for recycled paper through Sappi ReFibre.
It also planned to create jobs through a partnership with AsgiSA-EC to establish 30 000ha of commercial tree plantations by 2020 in the Eastern Cape.
Sappi Southern Africa is a part of Sappi Limited, a global company headquartered in Johannesburg, with over 15 500 employees and manufacturing operations on four continents. — Sapa