The company said the “continuing and accelerating structural drop in demand” for coated papers in Europe and elsewhere has made it “impossible” for it to fill its capacities adequately and to be sufficiently profitable in its current form.
“Importantly, the current unfavourable market situation is caused by factors that are beyond Sappi’s control,” it added.
Taking these conditions into account, and with a view to strengthening its position in graphic papers markets “to deliver maximum value”, Sappi said it has undertaken a thorough review of its European production assets and has concluded that “the least disruptive way” to adjust its capacity to match demand in the market would be to operate fewer machines.
Following “exhaustive analysis”, the business said its preferred option to achieve this would be to relocate the entire production output of Paper Machine 2, which equates to around 240,000 tonnes per annum of coated graphic paper, to other Sappi paper machines in Europe.
Sappi Europe chief executive Berry Wiersum said: “We fully recognise and commend the enormous efforts, both past and present, that employees and the management of Stockstadt mill have undertaken to reduce costs in order to earn better margins. Despite these relentless efforts the situation will not improve in the foreseeable future.
“We very much regret that we are confronted with this situation and hope that the consultation period can be used to find jointly socially acceptable solutions. At the same time, it is imperative that we not lose sight of the overall objective of improving the competitiveness of Stockstadt mill and securing its future.”
The mill currently employs 760 people, of which up to 150 positions are threatened by the consultations. Sappi said it “stands ready” to provide the required support and to implement the decisions reached as a result of the consultation process.
Printweek understands that the Stockstadt mill produces uncoated papers alongside some speciality coated grades and the Claro coated paper for litho printing, which is sold in the UK by Antalis.
Separately, Sappi Europe said it is to increase prices for its Woodfree Coated and Woodfree Uncoated paper grades by 5%-8% for all export markets with immediate effect due to “decreasing profitability combined with further cost increases”.
This does not apply in the UK, with the company confirming to Printweek that its definition of export markets refers to all markets outside Europe, excluding the US and Canada, and including Turkey.
Update from Antalis regarding Claro: “Claro Silk papers are made at Stockstadt (as opposed to the whole range) but Sappi have the ability to carousel their production across all group mills, so whilst the grade may move from the Stockstadt mill should the closure go ahead, there would be no anticipated issues with future production of the Claro product or stock supply into the UK market.”