Brussels, Belgium, 19 May 2011 -- Sappi Fine Paper Europe will cease production of coated graphic paper at its Biberist paper mill in Switzerland. After due and thorough consideration during the consultation process with local employees ending on 16 May 2011, the definitive decision was made to discontinue the coated graphic paper production. Production is expected to end by the end of July. The consultation was conducted with good cooperation between all parties involved, complying with the applicable Swiss legal framework.

Sappi continues to investigate possibilities for the sale and alternative industrial use of the site. Promising leads are being followed, with a clear emphasis on those that might generate the maximum employment opportunities. To give potential acquirers interested to convert the mill to alternative products the opportunity to complete a transaction, a decision regarding the future of paper machines No. 6 and No. 9, and associated support departments, has been postponed. However, those employees working on paper machine No. 8, and associated persons in finishing and supporting departments, will be served notice of redundancy by the end of May. A social plan will specify redundancy terms, including provisions for outplacement and training support for all affected employees. The social plan will ensure that the affected employees are provided the best possible opportunities to secure new jobs.

In consultation with and supported by the Cantonal government of Solothurn, a decision concerning the remaining employees will be made by the end of July. The Biberist mill employs around 550 employees in total.

"We recognize this is a very difficult and unfortunate outcome for those employees concerned, their families, and the communities surrounding the mill," said Berry Wiersum, CEO of Sappi Fine Paper Europe. “Unfortunately, this action was unavoidable and essential given the continued overcapacity and sustained increases in input costs.”

Volumes produced at the mill will be transferred to other Sappi sites. Production of uncoated paper will continue unless a suitable new owner for the mill is not found by the end of July. There will be no supply interruption of coated paper to customers during the transfer of production.

With the cessation of coated graphic paper production at Biberist mill, Sappi will reduce its coated graphic paper capacity by 500,000 tons per annum.