Report of Foreign Issuer
FORM
6-K
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Report
of
Foreign Private Issuer
Pursuant
to Rule 13a-16 or 15d-16
under
the
Securities Exchange Act of 1934
For
the
month of March, 2007
Commission
file number: 1-14872
SAPPI
LIMITED
(Translation
of registrant’s name into English)
48
Ameshoff Street
Braamfontein
Johannesburg
2001
REPUBLIC
OF SOUTH AFRICA
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
|
Form
20-F
|
X
-------
|
Form
40-F
|
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b) (1):
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b) (7):
Indicate
by check mark whether by furnishing the information contained in this Form,
the
registrant is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
If
“Yes”
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-
INCORPORATION
BY REFERENCE
Sappi
Limited’s Annual General Meeting: Chairman’s Statement, dated March 5,
2007, furnished by the Registrant under this Form 6-K is incorporated by
reference into (i) the Registration Statements on Form S-8 of the
Registrant filed December 23, 1999 and December 15, 2004 in connection with
The
Sappi Limited Share Incentive Scheme, (ii) the Section 10(a) Prospectus
relating to the offer and sale of the Registrant’s shares to Participants under
The Sappi Limited Share Incentive Scheme, (iii) the Registration Statements
on Form S-8 of the Registrant filed December 15, 2004 and December 21, 2005
in
connection with The Sappi Limited 2004 Performance Share Incentive Plan and
(iv)
the Section 10(a) Prospectus relating to the offer and sale of the Registrant’s
shares to Participants under The Sappi Limited 2004 Performance Share Incentive
Plan.
FORWARD-LOOKING
STATEMENTS
In
order
to utilize the “Safe Harbor” provisions of the United States Private Securities
Litigation Reform Act of 1995 (the “Reform Act”), Sappi Limited (the “Company”)
is providing the following cautionary statement. Except for historical
information contained herein, statements contained in this Report on Form 6-K
may constitute “forward-looking statements” within the meaning of the Reform
Act. The words “believe”, “anticipate”, “expect”, “intend”, “estimate “, “plan”,
“assume”, “positioned”, “will”, “may”, “should”, “risk” and other similar
expressions which are predictions of or indicate future events and future trends
which do not relate to historical matters identify forward-looking statements.
In addition, this Report on Form 6-K may include forward-looking statements
relating to the Company’s potential exposure to various types of market risks,
such as interest rate risk, foreign exchange rate risk and commodity price
risk.
Reliance should not be placed on forward-looking statements because they involve
known and unknown risks, uncertainties and other factors which are in some
cases
beyond the control of the Company, together with its subsidiaries (the “Group”),
and may cause the actual results, performance or achievements of the Group
to
differ materially from anticipated future results, performance or achievements
expressed or implied by such forward-looking statements (and from past results,
performance or achievements). Certain factors that may cause such differences
include but are not limited to: the highly cyclical nature of the pulp and
paper
industry; pulp and paper production, production capacity, input costs including
raw material, energy and employee costs, and pricing levels in North America,
Europe, Asia and southern Africa; any major disruption in production at the
Group’s key facilities; changes in environmental, tax and other laws and
regulations; adverse changes in the markets for the Group’s products; any
delays, unexpected costs or other problems experienced with any business
acquired or to be acquired; consequences of the Group’s leverage; adverse
changes in the South African political situation and economy or the effect
of
governmental efforts to address present or future economic or social problems;
and the impact of future investments, acquisitions and dispositions (including
the financing of investments and acquisitions) and any delays, unexpected costs
or other problems experienced in connection with dispositions. These and other
risks, uncertainties and factors are discussed in the Company’s Annual Report on
Form 20-F and other filings with and submissions to the Securities and Exchange
Commission, including this Report on Form 6-K. Shareholders and prospective
investors are cautioned not to place undue reliance on these forward-looking
statements. These forward-looking
statements
are made as of the date of the submission of this Report on Form 6-K and are
not
intended to give any assurance as to future results. The Company undertakes
no
obligation to publicly update or revise any of these forward-looking statements,
whether to reflect new information or future events or circumstances or
otherwise.
AGM
:
CHAIRMAN STATEMENT
We
reported our
results for the December quarter on the 1st of February and it was
pleasing to note the improved operating results for the business and the
reported earnings per share of 13c in the quarter.
We
indicated then
that we expected the underlying earnings in the coming quarter to improve
compared to the December quarter excluding the unpredictable fair value
adjustments. We continue to believe that we will be able to do
this.
Our
Fine Paper
business is experiencing strong demand and industry operating rates for coated
fine paper in Europe and the United States are at very high levels, but margins
are still under pressure.
In
Europe, the key
to our profitability is an increase in paper prices which have been declining
for six years in defiance of substantial cost increases in chemicals, energy
and
fibre. In December we announced price increases in Europe, and as far as we
can
tell, all our major competitors have now announced increases as well, although
some, notably one competitor, have delayed the increase until March. We are
maintaining the higher prices but in the short-term it is having some effect
on
volumes. We are confident that by the end of the first calendar quarter, prices
in Europe will have risen by about €40 a ton, but this is not sufficient to
fully offset cost inflation. Significant progress has been made on achieving
cost reductions which are aimed to reduce our cost on the average of the 2005
cost base by €175-million a year and this is on track for completion by
September. However, most of the cost reductions have been offset by price rises
in wood, energy and fibre; further price increases are therefore essential
to
restore reasonable margins.
In
North America,
we have stabilized the business and we are now back to the excellent customer
service levels which we offered previously. There are significant opportunities
to eliminate costs by streamlining our logistics chain and also by generating
and producing new products in the market and Sappi North America can now focus
on these issues.
Our
South African
business is benefiting from buoyant containerboard and pulp prices, improved
operations at Saiccor, a slow but steady improvement in the operating conditions
in Sappi Kraft and the weaker rand. The expansion of Saiccor is well underway
and is expected to come on stream by the middle of next year which will add
significant new profit opportunities and cost reductions for that business.
Much
improved margins can be expected from this business.
During
the last six
months, there have been significant management changes in the group as various
senior executives have reached retirement age. The new management teams are
beginning to settle down in South Africa and we will benefit from fresh eyes
on
old challenges. We are confident that they will find new opportunities to
improve the business. In Europe, Berry Wiersum joined the group in January
and
will take over from Wolfgang Pfarl as CEO of Europe when Wolfgang
retires at
the end of March. Berry is actively engaged in the transition period and focused
on improving the revenue line of our European business. In the US, the
management team has stabilized and we are focusing in the quarters ahead on
reducing costs and growing our market share back slowly. Finally, the new CEO
of
Sappi Trading, Wayne Rau, will take over that business at the end of March
when
Hugh Martin retires.
We
are positive
about the outlook for the business and expect the changes we have made will
continue to show steady improvement in operating performance.
ENDS
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Date:
March 6, 2007
| |
by
|
|
/s/
D.J. O’Connor |
| |
|
|
Name:
D.J. O’Connor
Title:
Group Secretary
|