2007 Annual Report - Sappi

Overview
Description
The main product line is coated fine paper, which represents
62% of group sales by value, and is used mainly in the
production of catalogues, brochures, books, premium magazines,
direct mailings and annual reports. Sappi Fine Paper also
produces a range of uncoated graphic and business paper,
coated and uncoated speciality paper – such as that used in
flexible packaging – and casting release paper, used in the
manufacture of artificial leather and textured polyurethane
applications. The geographic spread of its operations provides
an ability to optimise global knowledge of market developments,
operational best practices and technology. The business has
customers in over 100 countries. The division is approximately
65% self-sufficient in pulp.
In 2007 the Fine Paper division accounted for 80% of group
sales. Divisional operating profit excluding special items*
was US$87 million which, although far from an acceptable
level, was a significant improvement on the operating loss
excluding special items of US$23 million last year. This
represents a return on net operating assets of 2.8%.
Key issues impacting the business during the year have varied
across the regions with one consistent factor which is high and
in some cases rising raw material and energy input costs and
other inflationary pressures.
We have a strong focus on improving our operating profit
and the generation of cash by attending to the basics in our
business, including further developing customer relationships,
cost reduction, margin management, marketing and innovation
to grow the revenue line. Price increases are crucial in Europe.
* See note on segmental results for details of special items.
sappi limited | 07 | annual report 23