Cheap imports hurt Sappi's profit
Business / 13 Feb '13, 08:00am
Cheap products from China and South Korea were hurting Sappi’s cash flow and earnings, the biggest producer of glossy paper said yesterday.
Investment in South African production and jobs were under threat if the situation continued, Sappi’s Southern Africa chief executive Alex Thiel said.
There was a “clear trend over a number of years of uncompetitive behaviour from these countries”.
Sappi has submitted an anti-dumping application to the International Trade Administration Commission of South Africa against the two countries.
The company was in discussions with the Department of Trade and Industry and the Department of Economic Development for support, Thiel said.
Sappi’s net income fell 62 percent to $17 million (R152.7m) in its first quarter to December, it said last week.
The company stopped payouts to shareholders in 2008 as it struggled with a high debt burden and weakening paper sales in Europe.
The stock initially advanced in early trade yesterday, before closing 0.18 percent lower at R27.90 on the JSE, valuing the company at about R15.2 billion.
Sappi has declined 9.5 percent this year. – Bloomberg