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, 2006
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.
|
Yes
|
No
|
X
-------
|
If
“Yes”
is marked, indicated below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-
INCORPORATION
BY REFERENCE
Sappi
Limited’s press announcement, dated March 6, 2006, announcing the resignation of
its Chief Executive Officer, Jonathan Leslie, and containing a trading update
regarding the Registrant's market performance, 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.
 |
Sappi
Limited
South
Africa
|
Announcement
06
March
2006
RESIGNATION
OF SAPPI LIMITED CEO AND TRADING UPDATE GIVEN AT ANNUAL GENERAL MEETING,
MONDAY
6 MARCH 2006, JOHANNESBURG.
The
following
announcement was made by the Group’s Chairman, Eugene van As, on behalf of the
Board of Sappi at the Annual General Meeting held on 06 March 2006:
Resignation
of
CEO:
The
Sappi Limited
Board has announced today that Jonathan Leslie, Chief Executive Officer of
Sappi
Limited, has tendered his resignation from the company with immediate effect.
Mr. Leslie joined Sappi in April 2003 and has been Chief Executive of the
business for 3 years. The Board would like to thank Mr. Leslie for the
contribution he has made during his tenure and wishes him well for the
future.
The
Board has asked
the Chairman to assume executive responsibility for the Group until a new
appointment is made. In accordance with the principles of good corporate
governance, the Board has appointed David Brink as the Senior Independent
Non-Executive Director.
Trading
update:
We
have been
positive about the demand outlook for our major products for some time and
shareholders must be wondering why, when international commodity markets
are
booming and the demand for our product is positive, our results continue
to
disappoint.
The
main elements
affecting our performance have been the supply / demand balance and the
extraordinary rise in input costs. However, our own internal performance
has
also been a factor.
The
global supply /
demand balance for coated fine paper is reasonably positive. Significant
new
capacity had been commissioned in the early 2000s at a time when we entered
one
of the sharpest recorded declines in advertising. This had
a
major impact on
the industry; however, conditions have changed. There is no major capacity
now
under construction. The demand outlook continues to be good and we foresee
an
improvement in the supply / demand balance for at least the next two years.
It
is already in excess of 90%, a level at which most industries ought to be
very
profitable.
Most
of the major
producers have announced price increases for coated fine papers in Europe
and
the United States. We believe we are in a much better position to achieve
these
increases than when we failed in Europe last year. The new prices are unlikely
to have a material impact on our second quarter’s performance although we should
see significant benefit towards the end of the quarter and a positive impact
in
the third quarter.
Input
costs
continue to rise. While wood costs have largely levelled off in North America,
they continue to rise in Europe and prices of energy in various forms and
their
spin off effects remain high. The average cost of Brent crude in this quarter
to
date was US$62 compared to US$48 per barrel a year ago. For Sappi, every
dollar
per barrel of oil cost represents an earnings impact of between one and two
cents per share per annum after tax. There is a clear need for price rises
to
enable the industry to restore margins, ensuring it is viable and thus able
to
supply its customers over the long term.
We
have placed a
significant focus on trying to reduce costs across the Group. In November
2005,
we announced a target cost saving of US$100 million run rate by the end of
this
fiscal year and we still aim to achieve that.
While
the
performance of all our business units has room to improve, the key focus
will be
in turning our North American business around. This business has under performed
for some considerable time. We have advanced on the restructuring of the
Muskegon Mill but the benefits have been slower to materialise than anticipated.
We have also had some significant production cost variances at our other
North
American mills.
Our
business
objective remains to earn our cost of capital through the cycle and, while
not
meeting it in every quarter or every year, to meet it on average. There are
many
projects aimed at achieving this objective and we will report more fully
on them
next quarter. In the meantime, the short-term outlook is still not very positive
notwithstanding the good demand. We expect to see some deterioration in the
underlying earnings of our business in the second quarter. If price increases
can be realised and the cost reduction programmes are efficiently executed,
shareholders should begin to see a return to profitability in the latter
half of
the year. The management team is absolutely focused on attaining that
objective.
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 9, 2006
| SAPPI LIMITED, | |||
| by | |||
| /s/ D.J. O'Connor | |||
|
Name: D.J. O'Connor Title: Group Secretary |
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