Our performance in 2009 - Sappi

22. Provisions continued
September 2009 restructuring plans
Sappi Fine Paper Europe
2009 annual report
Kangas Mill. During the financial year ended September 2009, the company announced that it had entered into a
consultation process with employees’ representatives with a view to restructuring working models. The consultation process
with employee representatives came to an end in July resulting in nine employees being made redundant. After the term of
notice and remodelling, employment contracts will end in April 2010. A provision of approximately US$1 million relating to
retrenchment costs has been raised.
Kirkniemi Mill. The mill started consultation negotiations with the employee representatives on 06 April 2009 for production
and economical reasons. Negotiations came to an end on 19 May 2009 resulting in 63 employees being made redundant. The
timeframe for the reductions is that 44 employees will leave by the end of calendar year 2009. The remaining 19 employees will
retire or relocate by the end of calendar year 2010. A provision of approximately US$2 million has been raised.
Sappi Fine Paper North America
Muskegon Mill. During the financial year ended September 2009, Sappi Fine Paper North America announced the
decision to permanently close the Muskegon Mill and integrate the mill’s products into the production lines at the Somerset
and Cloquet Mills. A total of 190 employees were affected by the closure of the Muskegon Mill. Muskegon Mill had an annual
capacity of 170,000 tons of coated fine paper. A provision of approximately US$21 million relating to restructuring charges
has been raised.
Sappi Southern Africa
Regional Restructuring. During the financial year ended September 2009, Sappi Southern Africa announced that it had
entered into a process of consultations with employees at Tugela, Ngodwana and Enstra Mills regarding proposals for cost
reduction and efficiency improvement initiatives. The restructuring will affect approximately 227 employees. A total provision
of approximately US$2 million was raised.
September 2008 restructuring plans
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 employees comprised of those 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 at September 2007 and further revised to 347 at the end of fiscal 2008 of which 333 were already impacted. The
total provision relating to the restructuring plan at the end of fiscal 2008 was approximately US$5 million.
Blackburn Mill. During the financial year ended September 2008, Sappi Fine Paper Europe announced that it had entered
into a consultation process with employee representatives with a view to cease production at Blackburn Mill which had an
annual production capacity of 120,000 tons of graphic coated fine paper. Whilst various ancillary production and selling
activities are ongoing, the mill ceased production of paper in October 2008, and on 11 November 2008, the consultation
process with employee representatives came to an end resulting in 95 employees being made redundant. A further 14
employees were made redundant in 2009. A provision of US$23 million relating to severance, retrenchment and other
related closure costs was raised in 2008.
Maastricht Mill. During the financial year ended September 2008, Sappi Fine Paper Europe announced that it had entered
into a consultation process with employee representatives with a view to shutting down one of its coated paper machines with
an annual production capacity of 60,000 tons of graphic coated fine paper at Maastricht Mill. Negotiations with unions and the
Works Council were concluded in October 2008. Production ceased on 19 December 2008 affecting 175 employees. A
provision of US$24 million relating to severance, retrenchment and other related closure costs was raised.
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financials