2007 Annual Report - Sappi

23. Provisions continued
September 2007 Restructuring Plans
Sappi Fine Paper North America
Muskegon Mill: In 2007 Sappi Fine Paper North America completed its plan of restructuring the Muskegon Mill. The total
number of employees who were expected to be affected by the restructuring plan was 23 at the beginning of fiscal 2007.
All these employees were impacted by the plan by the end of the year. Approximately half of the provision of US$1 million
that remained at the end of fiscal 2006 was utilised to provide severance and related costs and the remainder was reversed.
Regional head office: All the remaining activities of the restructuring plan relating to the regional head office were completed
during fiscal 2007.
Sappi Fine Paper Europe
Regional restructuring. The regional restructuring plan was introduced in fiscal 2006. The original number of employees
expected to be impacted by this plan was 650. From a total of 650, 450 employees were expected to receive termination
benefits. The remaining number of 200 comprised employees who were employed on a contractual basis as well as
employees nearing retirement. The number of employees expected to receive termination benefits was revised from 450 to
357 of which 251 were already impacted by the restucturing plan at the end of September 2007. The total provison relating
to the restructuring plan is approximately US$15 million at the end of fiscal 2007.
September 2006 Restructuring Plans
Sappi Fine Paper North America
Muskegon Mill: During the financial year ended September 2005, Sappi Fine Paper North America announced the shutdown
of one its coated paper machines and closure and mothball of the pulp mill. The restructuring plan was expected to affect
362 Muskegon mill employees and the remaining severance and other exit costs at September 2005 amounted to
approximately US$12 million. During fiscal year 2006, the total number of people expected to be impacted by this plan was
reduced to 345 of which 322 had been impacted by the end of the year. An amount of US$8 million was utilised to provide
for severance and other exit and mothball activities and US$3 million was reversed for provisions no longer required for these
obligations. As a result, the balance remaining in respect of these severance and related costs amounted to approximately
US$1 million.
Regional head office: During the financial year ended September 2005, in conjunction with the announced closure of a paper
machine and the pulp mill at Muskegon Mill Sappi Fine Paper North America announced the restructuring of certain regional
head office activities. This plan was expected to impact 41 employees and the remaining severance and other related costs
at September 2005 amounted to US$1 million. During fiscal year 2006, the total number of people expected to be impacted
by this plan was reduced to 32 of which 31 had been impacted by the end of the year (1 individual expected to retire under
the plan). The remaining balance for severance and other costs was fully utilised.
In conjunction with the announced closure of coated assets at the Westbrook Mill during the fiscal year ended September
2004, Sappi Fine Paper North America announced the restructuring of certain regional head office activities. The total number
of people impacted by this plan at September 2006 was reduced from 85 to 72. At September 2006, all 72 employees have
been separated from Sappi Fine Paper North America and the remaining amounts for severance and related costs utilised.
Sappi Fine Paper Europe
Sappi Fine Paper Europe: During the financial year ended September 2006, Sappi Fine Paper Europe announced a major
restructuring of its European operations. The restructuring plan was expected to affect approximately 650 Sappi Fine Paper
Europe employees and the remaining severance and other exit costs at September 2006 amounted to approximately
US$40 million. The major part of the restructuring is expected to be completed within a period of a year.
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