Can a 5% newsprint tariff save SA’s print industry?

South Africa’s trade authorities have imposed a 5% tariff on imports of newsprint, in rolls or sheets, to save the domestic print industry from extinction.

The decision follows a request by JSE-listed multinational paper and pulp producer Sappi, whose margins and those of its peers were being eroded by cheaper imports.

The International Trade Administration Commission of South Africa (Itac) on Tuesday said it had, after an investigation, decided to raise the duty on imports from free of duty to 5% and will review it after three years so it can weigh the effectiveness of the duty on industry, downstream users and the broader value chain.

“The applicant submitted, among others, that sustained financial losses arising from declining global newsprint demand, global overcapacity and increasing low-priced imports threaten the viability of Sappi’s Ngodwana Mill (PM2), necessitating tariff protection to safeguard employment and preserve domestic newsprint manufacturing capacity,” Itac said.

“During its deliberations the commission found that declining global newsprint demand, persistent excess capacity and increased low-priced imports had weakened the domestic newsprint industry’s operational and financial performance.

“This was reflected in declining production and sales volumes, capacity utilisation and market share, alongside a significant price disadvantage against imports and consistently declining profitability over the investigation period.”

Sappi’s newsprint primarily serves the media and publishing industry, as well as the advertising and retail industries.

In retail and commercial advertising, Sappi’s newsprint products are used extensively to produce high-volume advertising inserts, circulars and promotional flyers distributed alongside newspapers or directly to consumers.

Itac said in the report that the domestic newsprint industry’s input and operational costs showed a sustained upward trend, driven by rising production-related expenses, particularly pulp and energy cost pressures.

The report notes that import volumes increased on average by 13% in 2021-25, with Canada emerging as the leading source of imports at 47.2% in 2024/25, followed by Brazil at 19.8% and Norway at 18.3%.

“The domestic industry’s production decreased by about 11.7% over the period, while the capacity utilisation declined from 68.5% in 2021/22 to 46.1% in 2024/25, reflecting sustained underutilisation of installed capacity,” the report says.

“The domestic industry’s market share for the domestic producer declined from 60.8% in 2021/22 to 51.1% in 2024/25, indicating a significant increase in import penetration and substitution of domestic output.

“A significant price disadvantage emerged in the domestic newsprint relative to comparable imported newsprint, reflecting intensified import competition and declining import prices.”

Sappi told Itac its Ngodwana Mill is the only operational newsprint facility in South Africa and across the Southern African Customs Union, the world’s oldest customs union.

The newsprint market has been in prolonged decline, driven primarily by digital migration, which has reduced demand for paper publications.

Despite this trend, newsprint remains an important medium in developing countries such as South Africa, where electronic connectivity is not universal.

Manufactured using virgin wood fibre, Sappi newsprint is a preferred grade among local newspaper printers. It has the required strength and runnability for demanding cold- and heat-set converting used in the manufacture of newspapers and advertising inserts.

South Africa’s print industry has been battered by a migration to digital platforms and rising costs of print, which has seen numerous magazines and newspapers shut down or move online.

Sappi’s Ngodwana Mill has an annual production capacity of more than 570,000 tonnes, comprising product categories including dissolving wood pulp, kraft linerboard, newsprint and uncoated flexible packaging.

The mill’s newsprint capacity is 110,000 tonnes, representing about 20% of the mill’s overall capacity.

The annual contribution of Ngodwana Mill to Mpumalanga’s GDP was R9.9bn in 2025, supporting 1,500 direct and 5,000 indirect jobs.

Sappi said that without appropriate tariff intervention, the continued influx of low-priced imports will further erode the viability of locally produced newsprint.

Beyond the newsprint industry, the influx of cheaper imports has also hurt the carton board industry.

Packaging manufacturer Mpact earlier this year issued retrenchment notices to workers at its carton board business, which has been overwhelmed by cheaper imports and the strengthening rand, with nearly 400 jobs on the line.

Trade, industry & competition minister Parks Tau last month instructed Itac to undertake a sector-wide paper and paper products industry investigation and recommend appropriate trade policy instruments that can drive the industry towards sustainability and resilience.

The reason advanced by the minister was that the South African pulp and paper industry is under tremendous strain, particularly in the uncoated paper, newsprint, packaging and tissue segments.

In the past seven years, the broader industry has invested R33bn in the economy.