Chief executive Jonathan Leslie said the South African paper manufacturers fine paper businesses were being hit by weak pricing in Europe and North America and by more competitive imports.

Sales for its fine paper division in Europe fell 9.1% to 1.1bn for the year ending September 2003, while operating profits halved to 67m.

Although 150 European jobs will go, Leslie stressed the group would not close any European production operations.

Sappi will also cut 100 jobs in the US, where it will close its most expensive coated fine paper machine at Westbrook and transfer production to other mills.

Sappi Fine Paper Europe chief executive Wolfgang Pfarl and North American chief executive Kathy Walters will now report directly to Leslie.

Sheffields position as Sappi Fine Paper chief executive will no longer exist, and as he did not wish to stay at the company if it meant taking a lower position, Leslie said Sheffield would leave on 14 November.

Sappis total sales rose 15% to 2.5bn ($4.2bn), although a large portion of the rise was related to currency translation.

Operating profits fell 26% to 171m, reflecting the reduction in paper prices in Sappis major markets. EBITDA was 392m, down 10% on the previous year.

Net profit for the full year fell 32% to 89m after Sappi took an 11m charge relating to the machine closure at Westbrook mill.