GLOBAL pulp, paper and cellulose-based solutions group Sappi says the restructuring of its business processes and paper operations in South Africa will lead to a significant additional reduction of jobs during the first half of financial 2012.
"We are restructuring our business processes and paper operations in SA to ensure that we adapt to our customers' changing needs and to match our assets to profitable markets and future growth," read its statement.
It noted that the first step in this regard was the closure of the Adamas Mill, which had already been completed.
"We are well advanced with the implementation of further cost reduction and streamlining at both our administrative and production areas.
'Regrettably, we expect that these measures will lead to a significant additional reduction of jobs during the first half of financial 2012," Sappi said.
The group expected that the changes would result in savings and benefits of about R250-million a year, once fully implemented.
In addition it expected to save about R100-million a year as a result of avoided maintenance capital expenditure.
Sappi said that in dealing with the tough market conditions and the declining trend in demand for graphic paper in its major markets, it had indicated for some time that it was taking decisive action to reposition itself for improved performance.
"As a result of the reviews and actions we have undertaken and planned, the group expects to take impairment and restructuring charges of about R1248-million in the fourth financial quarter ended September 2011, of which R156-million are cash impairment charges.
"The impairment and restructuring charges for the full financial year ended September 2011 will therefore be about R2340-million, of which approximately R640 million are cash charges," it said.
Sappi unpacked its group strategy, which it said involved four key themes, namely: continuing to optimise its better performing businesses; fixing underperforming businesses; investing for future growth in higher margin businesses, including chemical cellulose; and achieving this within the reality of the group's liquidity and balance sheet.
"We aim to generate at least 60 percent of operating profit from these higher margin growth businesses within three to five years, achieving real growth in the revenue line and asset base and exceeding our minimum ROCE target of 12 percent."
The group said its North American business, which it restructured in 2009, continued to perform well.
"We will explore opportunities to enhance the returns and cash generation."
Cost saving and capacity management measures were well advanced in Europe.
Sappi sheds jobs
GLOBAL pulp, paper and cellulose-based solutions group Sappi says the restructuring of its business processes and paper operations in South Africa will lead to a significant additional reduction of jobs during the first half of financial 2012.
"We are restructuring our business processes and paper operations in SA to ensure that we adapt to our customers' changing needs and to match our assets to profitable markets and future growth," read its statement.
It noted that the first step in this regard was the closure of the Adamas Mill, which had already been completed.
"We are well advanced with the implementation of further cost reduction and streamlining at both our administrative and production areas.
'Regrettably, we expect that these measures will lead to a significant additional reduction of jobs during the first half of financial 2012," Sappi said.
The group expected that the changes would result in savings and benefits of about R250-million a year, once fully implemented.
In addition it expected to save about R100-million a year as a result of avoided maintenance capital expenditure.
Sappi said that in dealing with the tough market conditions and the declining trend in demand for graphic paper in its major markets, it had indicated for some time that it was taking decisive action to reposition itself for improved performance.
"As a result of the reviews and actions we have undertaken and planned, the group expects to take impairment and restructuring charges of about R1248-million in the fourth financial quarter ended September 2011, of which R156-million are cash impairment charges.
"The impairment and restructuring charges for the full financial year ended September 2011 will therefore be about R2340-million, of which approximately R640 million are cash charges," it said.
Sappi unpacked its group strategy, which it said involved four key themes, namely: continuing to optimise its better performing businesses; fixing underperforming businesses; investing for future growth in higher margin businesses, including chemical cellulose; and achieving this within the reality of the group's liquidity and balance sheet.
"We aim to generate at least 60 percent of operating profit from these higher margin growth businesses within three to five years, achieving real growth in the revenue line and asset base and exceeding our minimum ROCE target of 12 percent."
The group said its North American business, which it restructured in 2009, continued to perform well.
"We will explore opportunities to enhance the returns and cash generation."
Cost saving and capacity management measures were well advanced in Europe.
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