Sappi Southern Africa has today announced it will shut down its Adamas paper mill in Port Elizabeth, South Africa. The permanent closure of the mill is expected to be finalised at the end of August. This brings to a conclusion the process announced on 24 May 2011 to investigate the continued operation of the mill.
Sappi Southern Africa has concluded an agreement with its Adamas mill employee representatives and redundancy notices have been issued to staff which specifies redundancy terms and includes provisions for outplacement and training support for all employees, to ensure that people have the best possible opportunity to secure new employment. The Adamas mill employed 213 people.
The mill has operated in Port Elizabeth for 47 years. Alex Thiel, CEO of Sappi Southern Africa commented: “As I mentioned when we began the consultation process, we fully recognise and commend the enormous efforts that employees and mill management have put in to try to make the mill competitive and to find a way to create a future for the mill. Unfortunately these efforts have been unsuccessful. We recognize this is a difficult decision affecting our employees, their families and the local communities and we would like to thank all of them for their hard work and support. Unfortunately this action became necessary to address the severe cost pressure that we are facing and the uncompetitive nature of this old and small mill.”
The volumes produced at the mill have been transferred to Sappi Enstra and Sappi Tugela mills.
Sappi expect to take a charge of approximately US$5 million in respect of these closure costs in the fourth financial quarter ended September 2011.
Sappi will maintain its presence in the Eastern Cape as regards marketing and sales as well as the collection and purchase of collected fibre (used for recycled paper) through Sappi ReFibre.
Adamas Paper Mill Staff in 1956 – Adamas machinery was commissioned by Italian workmen who spent many years in Port Elizabeth.
