The new prices will be effective for deliveries as of 1 February 2010.

Sappi said the speciality sector faces a major squeeze on its operational margins because of the continuing rises in cost of raw materials.

It said: "Increased efficiency and cost-reduction measures were proactively implemented, but proved to be insufficient to offset the steep increase in costs."

In March, the company warned of lower-than-expected demand for paper as global markets continued to deteriorate.