Sappi to Close, Mothball Swaziland Pulp Mill at the End of this Month

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Sappi, Johannesburg, South Africa, this week reported it will close its Usutu pulp mill in Bhunya, Swaziland, but has not been able to come to an agreement with the labor union regarding exit packages for mill employees. The Usutu mill has a production capacity of 190,000 metric tpy of unbleached, flash dried softwood kraft market pulp. It employs some 600 full-time people.

Sappi noted in several news reports that the mill had suffered operating losses for the past two years, and has made what it considers to be "a fair and reasonable offer "for the payment of exit packages, considering its current financial position. Reportedly, the labor union is trying to have the mill liquidated, which Sappi said is "not an ideal option" since it would affect other critical processes such as finding a suitable investor for Usutu Pulp Company's remaining operations.

Sappi added that it will close the pulp mill January 31, and mothball it during the next couple of months. All employees who received formal notice of the closure of the mill will be terminated on January 31, and all employees affected by the termination will receive exit packages on January 29. Sappi said it will allow employees to stay in the company villages until the end of May.