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Sappi North America to permanently shut PM9 and major components of energy complex at its mill in Westbrook, ME

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Sappi North America to permanently shut PM9 and major components of energy complex at its mill in Westbrook, ME

July 09, 2020 - 12:18
Posted in:

BOSTON, July 9, 2020 (PRNewswire) -Sappi, a leading producer and supplier of diversified paper, packaging products and dissolving pulp, today announced that it will permanently shut Paper Machine No. 9 (PM9) and major components of the energy complex at its Westbrook, Maine mill, impacting approximately 75 employees. The move is designed to improve the mill's overall cost structure and enable the company to operate more cost effectively in today's global marketplace. The company's product offerings will not change.

Sappi plans to shift all of PM9's base paper production to its mills in Cloquet, Minnesota and Skowhegan, Maine. This carousel of base paper leverages Sappi North America's premium paper making assets and continues to provide an integrated solution to our global Release Paper customer base.

"As a global manufacturer of innovative wood fiber products, a good cost position is important to our long-term success," said Mike Haws, President and CEO of Sappi North America. "Unfortunately, the Westbrook Mill's earnings have been under pressure as a result of widespread commoditization in the marketplace and legacy mill costs. This restructuring will enable Sappi to compete more effectively and allow the Westbrook facility to focus on its core competencies of specialty coating, texture application and customized product designs, restoring the site as a healthy financial contributor."

The mill's remaining assets, which support Sappi's Casting and Release Paper business, will continue to operate and produce a variety of release papers and films to meet the business' full range of customer needs. As a result of these actions, a restructuring charge of approximately US$14 million (US$11 million cash; US$3 million noncash) is expected during Sappi's fourth quarter, in addition to approximately US$8 million of accelerated depreciation to be recorded during the second half of calendar 2020.

The reconfiguration at the Mill will impact approximately 75 employees. The company will work closely with the impacted employees, local unions and various agencies to provide information, support and outplacement services. Sappi will also support all efforts to help affected employees find new employment.

"I want to thank our Westbrook Mill employees for their service to Sappi over the years," said Mike Schultz, Vice President Manufacturing, Sappi North America. "The restructuring at the mill serves to strengthen this business, however these decisions are never easy, and we do not take them lightly. We thank you for your outstanding contributions and we will do everything we can to support our affected employees during this transition."

The impacted assets are expected to close by end of calendar year 2020.

About Sappi North America, Inc.

Sappi North America, Inc., headquartered in Boston, is a market leader in converting wood fiber into superior products that customers demand worldwide. The success of our four diversified businesses – high-quality Coated Printing Papers, Dissolving Pulp, Packaging and Specialty Papers and Casting and Release Papers – is driven by strong customer relationships, best-in-class people and advantaged assets, products and services. Our high-quality Graphic Papers, including McCoy, Opus, Somerset, and Flo, are the key platform for premium magazines, catalogs, books, direct mail and high-end print advertising. We are a leading manufacturer of Dissolving Pulp with our Verve brand, a sustainable fiber, which is used in a wide range of products, including textile fibers and household goods. We deliver sustainable Packaging and Specialty Papers for luxury packaging and folding carton applications with our single-ply packaging brands, Spectro and Proto, and for the food and label industries with our specialty papers, LusterPrint and LusterCote. We are also one of the world's leading suppliers of Casting and Release Papers with our Ultracast, PolyEx and Classics lines for the automotive, fashion and engineered films industries. Customers rely on Sappi for high technical, operational and market expertise; products and services delivered with consistently high quality and reliability; and, state-of-the-art and cost-competitive assets and innovative spirit.

Sappi North America is a subsidiary of Sappi Limited (JSE), a global company headquartered in Johannesburg, South Africa, with more than 12,000 employees and manufacturing operations on three continents in seven countries and customers in over 150 countries.