Sappi says that the earthquake in Chile would put added pressure on the group and the European paper industry to raise prices.

Aftershocks rattled south-central Chile on Friday, seven days after one of the strongest earthquakes on record ravaged the area, in a country whose pulp industry accounts for some 8% of world output.

Finnish paper maker M-real said on Friday it would raise some paper prices due to a rise in pulp costs, partly caused by the earthquake as well as other factors, including a port strike in Finland.

Sappi, which has production operations in North America, Europe and Southern Africa and sells its products internationally, said local suppliers of pulp had informed the group that most mills would be out of action for at least one month due to extensive damage to Chile's infrastructure.

"Even prior to the earthquake, pulp supply was proving to be a constraint to the industry in Europe, with global prices moving up in excess of 40% since April last year," said Berry Wiersum, CEO of Sappi Fine Paper Europe. "The industry now faces a severe lack of pulp, which Sappi believes will result in increased pressure for steep rises in dollar-based pulp prices, exacerbated for European paper producers by the weakening Euro."