Sappi recently announced that it would be mothballing its PM4 paper machine at the Tugela Mill in Mandeni, KwaZulu-Natal, from 1 January 2013. Just over 400 employees received section 189 notices from Sappi indicating that retrenchment consultations would begin. However, Sappi said that it expected the final number of positions affected by the mothballing process to be substantially lower.
“Despite ongoing corrective actions and interventions to address increased energy, labour and raw material costs, the Tugela Mill has not delivered acceptable financial returns for the past number of years, said Sappi Southern Africa spokesperson, Zelda Schwalbach.
‘‘More recently, the mill’s competitiveness has been further challenged by overcapacity in the local paper market, an influx of imported products, weak demand for certain paper and depressed selling prices,” she said. Solidarity said it felt that Sappi’s reasons for implementing the retrenchment consultations at Tugela Mill were based on sound business principles. However, the union promised to do all in its power to reduce the number of retrenchments, and added that Sappi had indicated a willingness to do so too.
Solidarity spokesperson, Moira-Marie Kloppers, explained that among the actions it would undertake to minimise retrenchments would be negotiations with Sappi to offer voluntary severance packages and early retirement packages to existing mill employees.It would also offer financial counselling and other assistance to those who ultimately lose their jobs.
“Because of our good track record in the past, we are convinced that we will be able to reach an agreement before Christmas. The date of the actual retrenchments is still being negotiated. Our goal is to be able to give employees clarity about their position before Christmas because we know what impact uncertainty about job security can have on people,” said Kloppers.
Sappi has implemented a number of retrenchment processes at various operations in South Africa since the beginning of 2011, citing operational inefficiencies and high production costs as being among the primary reasons.
