Sappi reports growth in demand in the 1st quarter of 2006

The paper manufacturer Sappi achieved sales of USD 1,256 million in the first quarter of 2006 (previous year: USD 1,230 million). The operating result of USD 59 million was USD 4 million higher than in 2005. According to Sappi Chairman Eugene van As, the paper group is benefiting from strong growth in demand in its main markets. Capacity utilization is also at its highest level to date. However, the price increases achieved were diminished by the price increases for wood, energy, chemicals and pulp. A price increase of over 3% is required to offset these cost increases. However, Sappi Chairman Eugene van As intends to continue to improve the operating result through cost reductions and operational savings. The first effects should be noticeable towards the end of the financial year. In addition, no more business is to be conducted at an unprofitable level.