Sappi said in the last few years the paper industry has faced "significant cost increases", which it has covered by implementing several cost reductions and efficiency programmes across its operations in Europe.
Marco Eikelenboom, sales and marketing director of graphic papers, Europe, said: "Despite the policies we have implemented, unfortunately profitability has remained on an unsustainable level.
"Prices have eroded and our input costs have escalated, and we can't see that changing during 2009."
Earlier this year, the EU competition authorities cleared Sappi's proposed acquisition of M-real's coated graphic paper business.
As a result, Sappi has expanded its woodfree coated products and increased its European graphic paper capacity from 2.6m tonnes per annum to 4.5m tonnes per annum.
'Unsustainable' profit levels sees Sappi raise prices
Paper manufacturer Sappi has said it will increase the price of its coated fine and mechanical coated grade papers by 8-10% as of 1 January.
