2020 Sappi Southern Africa Corporate Citizenship Report

Respond

Responding to this SDG is about the quality, not just the quantity, of jobs created.

What is this about?

Economic growth should be a positive force for the whole planet. This is why we must ensure that financial progress creates decent and fulfilling jobs without harming the environment. We must protect labour rights and promote job creation to uplift people, alleviate poverty and promote growth.

Why is this a priority goal and why does it matter?

Gender equality

For South Africa: In 2019, men occupied 75.6% of top management positions in South Africa compared with women at 26.4%5. Ending all discrimination against women and girls is not only a basic human right, it’s crucial for a sustainable future and promoting economic growth.

For Sappi: Ensuring gender diversity enables businesses to tap into a wider talent pool with different types of skills, which contributes to overall enterprise performance. This is highlighted by the International Labour Organization which estimates that gender diversity can increase profitability by  5-20%.

Safety

For South Africa: Globally, the pulp and paper industry, and forestry in particular, is potentially hazardous.

For Sappi: We recognise that accidents can have devastating consequences on people’s lives and families, as well as workplace morale.

Return on average net operating assets (RONOA)

For South Africa: The country wants to advance the South African economy by promoting socio-economic growth and enhancing export competitiveness.

For Sappi: Our viability as a business depends on generating positive returns which benefit our investors and other stakeholders.

We continue to help promote South Africa’s socio-economic growth through ongoing investments, including our ZAR7.7 billion investment in Vulindlela, our expansion project at Saiccor Mill.

5 https://www.thesouthafrican.com/lifestyle/gender-equality-transformation-in-south-africa-workforce/

Workshops focused on gender-based violence were held on our plantations.
What is Sappi doing about it?

Gender equality

In SSA, 73.2% of our people are men, 26.8% are women. We are working to increase the percentage of women in management roles and will be reporting transparently on performance against this target from 2021.

Safety

Tragically, there was one transport-related fatality in the Sappi Forests contractor division. However, on the positive side, our safety performance in FY20 improved, with the lost-time injury frequency rate (LTIFR) at 0.41 – a significant improvement from 0.70 in FY19, with the rate for contractors also improving from 0.37 in FY19 to 0.26 in FY20.

SSA LTIFR

Supporting the health, safety and well-being of our employees and contractor employees is the cornerstone of our business. All our pulp and paper mills are certified to OHSAS 18001 to ensure best practice in health and safety, and we work to entrench the principles of Project Zero across all our operations every day, to encourage a 24/7 safety mindset. In response to the Covid-19 pandemic, all operations and sites established the required sanitising and hygiene protocols, social distancing, temperature checks, self-declaration health check requirements, with ongoing engagement and communications to ensure self-awareness at work and at home.

RONOA

We provide powerful everyday materials built from renewable resources, and we proved our ability to make what we should, not just what we can, during Covid-19. The classification of our operations as essential meant that we could continue to provide the products needed by our customers, from paper labels for canned goods and food packaging, to the dissolving pulp (DP) used in disinfectant wipes and hospital gowns.

The lockdowns and corresponding economic slowdown negatively impacted the demand for graphic paper. Many companies, including retailers and consumer-related businesses, reduced their advertising spend, while printers halted production. We responded to the decline in newsprint demand by enabling the newsprint machine at Ngodwana Mill to produce lightweight liner, and to lower office paper sales by producing white packaging grades at Stanger Mill. We also broadened Lomati Mill’s product offering to include pre-packaged shelving and switched some DP production at Ngodwana Mill to paper pulp for internal consumption and external sales.

Case studies

Unlocking the power of sustainable woodfibre

Boosting the South African economy

Our ZAR7.7 billion investment at Saiccor Mill exemplifies our determination to boost the South African economy and advance the country’s participation in the global value chain. Work was halted due to the Covid-19 lockdown, but is now due for completion in the second half of 2021.

The investment will increase the mill’s capacity by 110,000 tons per annum, create additional future permanent employment for 120 people and result in annual savings of ZAR300 million through improved and more efficient processes.

The project has significant socio-economic and environmental advantages. The KwaZulu-Natal provincial economy will earn an additional ZAR1 billion per annum and the construction phase of the programme, which will conclude towards the end of 2021, will create employment for about 2,000 people. To date, 1,670 employees from the local communities surrounding the mill have already benefited through the Vulindlela onboarding facility.

In terms of environmental benefits, not only will fossil fuel carbon dioxide (CO2) emissions be halved and sulphur dioxide (SO2) emissions reduced by 37%, but water use efficiency will improve by 17% and waste to landfill reduced by 48%.

Demonstrating the power of adaptability

Agility in action

Covid-19 led to the closure of borders, airports and trading ports. And this, in turn, led to the shutting down of almost all the supply chain channels for the sale of printing and writing paper, to a point where Stanger Mill was forced to take commercial downtime.

The SSA sales and marketing team moved swiftly to re-establish local and regional supply chains by expanding the Sappi portfolio of grades. One key grade identified was bleached PrimePak. The PrimePak grade has a strategic advantage in that demand is non-cyclical, due to its end-use applications for packaging food staples such as flour, sugar and maize meal.

Diversifying our portfolio

The Sappi Technology Centre (STC) and sales and marketing teams, together with Stanger Mill, conducted a market competitive analysis to gather insights into the quality and composition of paper required in this market, as well as potential customers and the demand gap left by reduced imports. Stanger Mill uses bagasse pulp (sugar cane waste residue) in the fibre mix. This provides a cost advantage but, at the same time, the short fibre length compromises the much-needed strength properties for PrimePak grades.

A prime solution

To overcome this challenge, the STC evaluated different furnish blends from both a cost and strength perspective and arrived at a suitable market pulp which is now being successfully used for PrimePak.


Looking forward: Our Thrive25 target aligned with this SDG
Achieve zero injuries   Zero injuries
Drive down lost-time injury severity rate (LTISR) Combined own and contractor employees   ≤25
Increase proportion of women in management roles   3.1% pts
Share of procurement spend with declared compliance with Supplier Code of Conduct   80%
Participation in Employee Engagement Survey   > 85%
Percentage of staff fully engaged with our business   > 83%
RONOA   2% pts above WACC
weighted average cost of capital (WACC)
How can I support this goal?

Stop, Think, Before you Act – be safe and don’t hesitate to point out unsafe behaviours to your colleagues, family and friends

Support companies that care for the environment and for their workers

Support international campaigns to end modern-day slavery, forced labour, human trafficking and forced marriages