The persistent global economic downturn is proving to be much tougher than anticipated with depressed markets, geopolitical instability and weak economic growth combining to put significant pressure on Sappi, particularly in Europe.
In response we announced on 10 October 2023 the start of a consultation process on the possible closure of Sappi Lanaken Mill. We have completed this process and agreed on the social plan for the employees. Production of paper ended in December 2023. The closure of the site should be completed during the second calendar quarter of 2024. Details regarding the financial impact once all closure elements are taken into account will be provided during the first quarter financial results announcement.
For Sappi, our strategic focus includes reducing exposure to the graphic paper segment while expanding our presence in packaging, speciality papers, pulp and biomaterials. Sappi Europe is focused on building a sustainably resilient company. This requires evaluating the future of all facets of the business based on market dynamics and the market segments Sappi believe will be strongest in the future.
While continuing to serve the graphic paper market through its competitive assets, the overall priority of the European business will be to grow the packaging and specialities segment specifically within flexible packaging, functional papers, self-adhesives including glassine, labels as well as dye-sublimation categories. The transfer of production to other Sappi facilities increasing capacity utilisation has commenced and there will be no disruption to our customers.
Sappi Lanaken Mill is an integrated pulp and paper mill located in Belgium, which employed 581 workers with a production capacity of 165,000 tpa of pulp used to produce 530,000 tpa of coated woodfree paper which was mainly sold into the European print market.
