Thousands of jobs at risk as manufacturers in South Africa come under siege
Paper manufacturer Sappi has voiced concerns about rival imports into South Africa, saying they threaten manufacturing jobs in the country.
Sappi is a global company with significant operations in South Africa, including the Ngodwana mill in Mpumalanga and three other plants in KwaZulu-Natal.
The company is a major paper supplier in South Africa, selling over 730 tonnes of paper products in the three months ended June 2026.
Despite these impressive sales, the company reported an overall operating loss of approximately R2.77 billion for the period, excluding special items.
The operating losses come despite its revenue for the three months reaching nearly R5.6 billion, slightly lower than the same period last year.
Sappi said the lower profitability in South Africa is due to several factors, including lower sales volumes and exchange rate movements.
It said that selling prices for its products had decreased 5% year-on-year, due to increased competition in South Africa.
The competition has come from foreign imports entering the country, which has forced Sappi to lower its prices to remain competitive.
“Profitability continued to be impacted by intense competition from low-priced imports, which placed significant pressure on selling prices,” it said.
Trading Economics estimated that South Africa imported approximately R1 billion in paper products in 2025, with the figure holding steady since 2022.
Sappi CEO Steve Binnie commented on the performance of his company’s operations in South Africa, saying that it is a strong market for them.
“South Africa remains a strong business with competitive assets and healthy demand in several of our markets,” he said.
“However, increasing levels of imported products continue to create challenges for local manufacturers and deserve greater policy attention.”
Companies want tariffs
Binnie’s comments likely refer to tariffs on foreign paper imports, to stop them from undercutting South Africa’s existing markets.
Tariffs are commonly used by countries to safeguard their own industries by preventing lower-cost producers from entering and dominating specific sectors.
South Africa launched an investigation into the importation of A3 and A4 paper in June 2026, with support from both Mondi and Sappi.
This investigation aimed to identify solutions to the challenges identified by the two companies, including possible tariffs.
Mondi and Sappi, two of South Africa’s largest paper producers, urged South Africa to investigate foreign imports for several reasons.
The companies said that increased imports would damage domestic operations, threatening the industry and its many employees.
The broader forestry and forestry products industry employs over 150,000 people in South Africa, supporting the lives and livelihoods of hundreds of thousands more.
The paper and pulp industry alone accounts for around 35,000 of these workers, thousands of which are at risk because of the import threat.
The domestic manufacturers alleged that the sharp increase in imports could be due to a lack of global demand for paper products, as digitisation takes over many parts of the world.
This would leave foreign companies with an oversupply of paper products, which would then be diverted to surplus output markets such as South Africa.
It was also alleged that South Africa’s commitments to the World Trade Organisation (WTO) were limiting the country’s ability to respond to market threats.
These commitments include South Africa not imposing tariffs higher than 20% on printing and writing paper imports and eliminating quantitative import restrictions.
When the investigation began, South Africa’s paper manufacturing industry pointed to declines in sales, output, market share, and other key metrics.
This investigation is currently ongoing, with companies such as Sappi waiting to see if tariffs will be imposed in the country.
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