2020 GROUP SUSTAINABILITY REPORT



Creating value

Adding value to daily life

With a burgeoning global population that's becoming increasingly urbanised, with climate change and resource scarcity top of mind for many consumers, the world's demands for sustainable products based on renewable resources like woodfibre are set to grow. Our products play an integral part in the everyday lives of people across the country and around the world. We play an important role in society, offering efficiently manufactured, recyclable products, made from renewable raw materials:

  • Our Verve dissolving pulp is used world-wide by converters to create viscose fibre for fashionable clothing and textiles, pharmaceutical products as well as a wide range of consumer and household products.
  • Quality packaging and speciality and papers are used in the manufacture of products such as soup sachets, luxury carry bags, cosmetic and confectionery packaging, boxes for agricultural products for export, tissue wadding for household tissue products, and casting and release papers used by suppliers to the fashion, textiles, automobile and household industries.
  • Our market-leading range of graphic paper products are used by printers to produce books, brochures, magazines, catalogues, direct mail and many other print applications.
  • Our bioproducts offer a viable alternative to fossil-fuel based products.

Contributing to society

We contribute to society through payments to governments, suppliers and employees, as well as returns to shareholders.

Value added over the last three years


Facilitating economic well-being

Direct impact

We facilitate social and economic well-being by using labour from local communities, and the services of small and medium enterprises in areas around plantations and our production facilities in areas around production facilities and plantations in South Africa.

Indirect impact

The indirect economic benefits of our operations impact on sectors including technical, construction and engineering services that are outsourced to a variety of contractors. The chemicals industry, in particular, is one of our major suppliers. In addition, the provision of services including collection of waste paper for the industry and outsourcing non-core activities such as maintenance, medical services, transportation, cleaning and security creates opportunities for small, medium and micro enterprises.

In 2020, we added value to the prosperity of the regions where we operate by:

  • Providing work opportunities for the 9,250 people are employed by contractors working for Sappi Forests in South Africa.
  • By creating millions of dollars' worth of goods each year. In 2020, in volume terms (metric tons '000), sales per region were:
    – SEU: 2,698
    – SNA: 1,516
    – SSA: 2,574
  • Contributing to domestic growth and the balance of payments in each region where we operate by exporting products to over 150 countries around the world.

Playing a strategic role

The forestry industry is one of the strategic economic sectors in each region where we operate, and makes a significant contribution to economic growth and job creation, particularly in rural areas, where employment and income generation opportunities are more limited than in cities.

Europe

In 2019, the pulp and paper industry provides more than 180,000 jobs in Europe directly, and 1.5 million jobs in the value chain. It has a turnover of EUR90 billion and adds EUR20 billion to the European gross domestic product (GDP). It is strong in export markets, with an export rate of 22% of its paper and board production.1

North America

The forest products industry accounts for approximately 4% of US manufacturing GDP, manufactures nearly US$300 billion in products annually and employs approximately 950,000 men and women. The industry meets a payroll of approximately US$55 billion annually and is among the top 10 manufacturing sector employers in 45 states2. In Canada, paper mills contributed CAD$6.7 billion to the national economy in 20203.

South Africa

The forest products sector in South Africa employs approximately 157,500 people (59,800 directly and 97,700 in indirect jobs). Overall, forestry provides livelihood support to 688,000 people. The forest sector (forestry and forest products) contributes about 1% to national GDP and makes a significant contribution to the balance of payments.4

South Africa's pulp and paper sector contributed ZAR7.3 billion to the country's balance of trade, with ZAR4.9 billion of papers being imported and ZAR12.2 billion worth of pulp being exported in 2018.5

1 https://www.cepi.org/wp-content/uploads/2020/07/Final-Key-Statistics-2019.pdf
2 https://www.afandpa.org/advocacy/economic-impact
3 https://www.ibisworld.com/canada/market-size/paper-mills/
4 Forestry South Africa, latest statistics as at September 2019
5 https://www.thepaperstory.co.za/wp-content/uploads/2020/04/PAMSA-2018-Industry-Statistics-Summary-edited.pdf

Promoting prosperity outside our own operations

In South Africa we promote prosperity through our Sappi Khulisa enterprise development programme that encompasses community tree farming and that, albeit in a different form (Project Grow), has been in operation since 1983. Whereas Project Grow focused solely on the growers, Sappi Khulisa focuses on the whole value chain including growers and the contractors who service them. The total area managed currently is 32,660 hectares. In 2020, under this programme, 284,038 tons of timber (2019: 425,001 tons) worth some ZAR232 million (2019: ZAR382 million) was delivered to our operations. Since 1995, a total volume of 4,505,979 tons to the value of ZAR2.7 billion has been purchased from small growers under this programme.

Currently, the programme involves over 3,644 growers and approximately 103 small, medium and micro enterprises (SMMEs) who are involved in silviculture, harvesting, loading, short- and long-haul activities.

We have established three training centres, Khulisa Ulwazi ('Growing knowledge'), for Khulisa growers. The objective is to develop growers' and contractors' skills so that they can conduct silviculture operations economically and to a good standard. Training material has been developed in conjunction with the Institute of Natural Resources and covers area like entrepreneurship, fire management, harvesting planning, leadership and management development, as well as safety.