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Management Side
Sappi to Take Commercial Downtime

Johannesburg, South Africa 15 July 2015 -- Sappi North America is preparing its Cloquet paper mill for an eight-day commercial downtime next week. The company will idle all paper operations beginning with the day shift on 21 July and start them up again on 29 July.

In an e-mail to Cloquet mill employees published on the United Steelworkers Union local 1163 Facebook page, mill manager Mike Schultz explained the reasons for temporary production downtime and layoffs, pointing to currency dynamics and global market conditions, negatively affecting business at Sappi Cloquet mill. "Our order situation for paper has not improved to the point where we are reducing inventory to the levels we need. Much of this is brought on by the strength of the US dollar making it very attractive for global competitors to do business in the US", he wrote.

Cloquet paper mill produces 330,000 t of woodfree coated paper on two paper machines. Local media reports are quoting union leaders as saying that 250 out 730 mills' employees will be affected by the eight-day layoff.

The company apparently does not rule out taking additional action in the future to match fine paper output to demand and restore the inventory levels. "Although this curtailment is expected to bring us back on our inventory curve, we can't project for certain what orders will be going forward. Our current order trend is not following historical references," Schultz said, informing Cloquet mill employees on the potential of additional layoffs.

Besides coated fine paper, the Cloquet mill also produces specialty cellulose, in particular for the textiles industry. Sappi puts the annual production capacity for dissolving wood pulp at 330,000 t.


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