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‘SAPPI to close down’

Business Section

By SIBONGILE SUKATI - TIMES OF SWAZILAND -21-Jun-2009

MBABANE—The country’s only pulp mill SAPPI Usutu will shut down on September 30, 2009, the Prime Minister, Sibusiso Dlamini, was informed on Friday.

Just before the prime minister and several of his ministers attended the official opening of the Public Service Pension Fund building, some members of the Swaziland Federation of Trade Unions (SFTU) gave the head of government a briefing of what was happening at Sappi, according to employees. If this is true, about 600 Swazis will lose their jobs in three months’ time.

Present during the meeting with the PM was Minister of Commerce, Trade and Industry Jabulile Mashwama and Minister of Information, Communi-cations and Technology Nelsiwe Shongwe who represented Minister of Labour and Social Security Patrick Mamba.

A reliable source told this publication that the workers’ representatives informed the PM that there was no communication from SAPPI Usutu management about what was really going on with the company. The comp-any currently faces major financial constraints which were caused mainly by last year’s devastating fires where Usutu lost over 20 000 hectares (about 40 per cent of their major raw material) and the global economic downturn. “The head of government was also asked that government intervenes because the closure of such a large company would have detrimental effects on not just the country’s economy, but also a large number of Swazis would find themselves jobless,” said the source.

The industry offers about four per cent of the country’s Gross Domestic Product. The workers fear that there would be retrenchments and pleaded with government to do all it can to help. Government Spokesperson Macan-jana Motsa confirmed that the PM had met with the workers’ representatives. “The PM and the ministers met with some SFTU officials, who gave them a bird’s eye view of what was happening at SAPPI,” said Motsa.

She would not divulge any other details on the meeting. One of the workers’ representatives confirmed to this publication that they told the PM that they had information that the company would stop operating the mill on September 30, 2009. “We have information sourced from some of the management from the main Sappi board that they were seriously considering to stop operations on September 30,” said the union official, who wished to remain anonymous due to the sensitivity of the matter. Motsa added that Ministers Mashwama and Mamba were given the mandate to look into the issue and treat it with the urgency it deserved. A Cabinet minister also informed this publication that the SAPPI matter had also been brought to the attention of the Head of State, His Majesty King Mswati III.

blame However, Sappi management was not to blame as it was reported that they did approach government officials and told them of the current situation. “The Finance, Commerce and Trade and Labour and Social Security ministers had also been looking into the Sappi issue,” said the source.

The PM was also informed that management had been given increments in January, whereas they staff did not. Sappi management is said to have asked government for a tax cut during these trying times, and also brought another option of continuing to operate, but also finishing the product that is to now make the paper in country instead of exporting the pulp. “If the company would shut down, it could take about 16 years for it to re-open as this would mean replanting and the trees take very long to grow,” said the source.

The situation at the company has been uneasy for a few months now and towards the end of April, Sappi General Manager Shane Perrow issued a memo which partly read that “we must, however, emphasise that any new business model for Usutu may have an impact on the current manning levels of the company, but the overriding intent-ion by SAPPI is to keep the reduction to the lowest possible level”.

Reports are to the effect that should the company change from its pulping operation to another business model, there is a risk that a number of jobs could be lost. Since the fires, Usutu has been utilising 100 per cent burnt timber and it is presently doing that. The financial problems faced by the company have resulted in the staff not receiving their annual salary increments in April.

launched On another note, management has launched a programme whereby some staff members who are interested in buying the company’s houses can do so. Sappi General Manager Perrow did not wish to comment on the matter. He said he was aware of the meeting between the PM and some members of the union, but would only have a briefing probably tomorrow.


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