Sappi seeks boost in demand

Sappi hopes growth in ad spend will lead to an increase in coated paper demand and prices in the second half of the year.

"In Europe we have seen quite a lot of recovery in our markets edging toward 1999 levels," said executive chairman Eugene van As.

The forecast came as the South African papermaker reported a 21% fall in sales to 595m, which van As attributed to weak prices and a strong dollar, for the second quarter of its 2002 financial year.

He said margins remained robust despite the weak market for coated fine paper, but pre-tax profits fell 17% to 58m. Van As also said there were signs of an upturn in pulp prices.

During the second quarter Sappi took 150,000 tonnes of pulp and paper production downtime, a strategy it plans to continue.