Sappi Limited · JSE:SAP
Sappi — Corporate Update (June 2003)
45 slides from Sappi's corporate update, June 2003
Slide 1: Welcome to Stanger Mill
Slide 2: fy ea pA
a, __ Se fy ea pA
Slide 3: Mill mission and values
Preferred Supplier “2s Effective Communication Skilled andl Team OrientatediPeop| Safe\d Healthy Fnirormeli _@ Positive & Innovative Leadership Self Sufficient Local'Community
Slide 4: Brief History of Stanger Mill
BRIEF HISTORY OF STANGER MILL 1973/5 Construction of mill CG Smith (Illovo) and Reed Int 1976 Stanger Pulp & Paper commissioned 1979 Sappi acquired mill from Reed
Slide 5: Brief History of Stanger Mill
BRIEF HISTORY OF STANGER MILL The development of the Mill since then: 1982Finishing winder installation 1984Pith Clarifier commissioned 1988Evaporator expansion - D effect 1991Took over Moist Depith plant from Illovo 1991Efluent Clarifier commissioned 1992Delkor belt filter installation 1993Secondar
Slide 6: PM & Coating Kitchen Upgrade - Impilo Yethu
PM & COATING KITCHEN UPGRADE - IMPILO YETHU Capital investment of R207m with 5.1 year payback. On budget, equipment performing to std, slower than anticipated start-up curve. Major components replaced : Headbox Topformer Reduced draws in press section Filmpress Reel up Coater Kitchen
Slide 7: PM & Coating Kitchen Upgrade - Impilo Yethu
PM & COATING KITCHEN UPGRADE - IMPILO YETHU Automated preparation of coatmixes - greater consistency High degree of flexibility Reduced waste
Slide 8: Upgrade Quality Benefits
UPGRADE QUALITY BENEFITS Double coated Improved sheet profiles (flatness) Reduced mottling tendency Elimination of calender blackening Improved gloss Improved smoothness Reduced two sidedness
Slide 9: Brief History of Stanger Mill
BRIEF HISTORY OF STANGER MILL The development of the Mill Management Systems: 1992 TQM 1993 ISO 9002 1995 TPM process 1996 ISO 9001: 1994 1998 NOSA to CAP 2002 ISO 9001: 2000 2002 ISO 14001 2003 OHS 18001 Safety standard 2003 Integration of systems
Slide 10: Stanger Mill Production Facility
STANGER MILL PRODUCTION FACILITY Pulp 54000 tpa Paper 80000 tpa Tissue 30000 tpa Depithing Plant 5 Pallman Depithers, 1 Peadco Depither Pulp Mill Continuous Digester (Soda) 150 tpd Bleach Plant [CEH], Wet Lap Machine, Copeland Reactor (Soda Ash) Tissue Machine Escher Wyss 3.4m 83 tpd Paper Machine V
Slide 11: Services
SERVICES Steam 4 John Thompson Boilers : 120 TPH Water Mvoti River, Municipal Effluent, 4 Boreholes Average consumption: 20 Ml/day Incoming clarifier, sand filters, demin plant Effluent Primary and secondary clarifiers Aeration and Maturation lagoons Solid effluent : landfill Power Two 30 MVA lines/
Slide 12: Process Flow
PROCESS FLOW MOIST WET PULP SUGAR MILL DEPITHING DEPITHING DIGESTER (soda cook) WET HD LAP TOWERS BLEACHING WASHING (CEH) TISSUE MACHINE PAPER PRE COATER MACHINE WINDER MACHINE WINDER FINISHING VARI ROLL HOUSE WINDER SUPER CALENDAR WAREHOUSE
Slide 13: Tissue Grades
TISSUE GRADES % PROD. 1-PLY TOILET (21 gsm) 44 2-PLY TOILET (16.5/33 -17/34 gsm) 20 FACIAL (16.5/33-17/34 gsm) 2 IND/ WIPE & TOWEL (1 PLY 25-50 gsm) 24 (2 PLY 17.5/35 gsm , 23/46 gsm, 32/64 gsm) SERVIETTE (17 - 23 gsm) 10 100 SALES LOCAL 70% EXPORT 30%
Slide 14: Paper Grades
PAPER GRADES Grade Function Status %Prod SCHOLASTIC STATIONERY UNCOATED 3 AVALON [100 - 250gsm] SFOL HIGH WHITE CORE GRADE NEW DUKUZA (80-230 gsm) SFOL STANDARD WHITE CORE GRADE 31 PLATINUM (89gsm) SFOL STD WHITE LABEL CORE GRADE 9 CRYSTAL (80-135 gsm) HEATSET WEB OFFSET CORE GRADE 43 CRYSTAL GRAVUR
Slide 15: Mission: Stanger Mill
Preferred Supplier | 4 Effective Communication GlledandileamiOnentatedieeane Safed Healthy Environment Positive & Innovative Leadership Self Sufficient Local Community Mission: Stanger Mull
Slide 16: Stanger Mill Manpower Complement
STANGER MILL MANPOWER COMPLIMENT Section Compliment Mill Management 8 Production Pulp & Environment 102 Production Paper & Tissue 220 Technical 35 Administration 87 Human Resources 28 Engineering 164 644
Slide 17: Stanger Mill Head-count
STANGER MILL HEAD-COUNT Sappi - Stanger 90 0 Mill 85 0 80 0 75 0 70 0 Number 65 0 60 0 55 0 50 0 45 0 40 0 19 9 5 19 9 6 19 9 7 19 9 8 19 99 20 0 0 2 0 01 2002 Sep-95 Sep-96 Sep-97 Sep-98 Sep-99 Sep-00 Sep-01 Sep-02 Headcount 847 822 751 742 739 693 668 650
Slide 18: Stanger Mill Manpower Equity
STANGER MILL MANPOWER EQUITY DIVERSITY M F Black 23.29% 0.47% Stanger Mill Compliment Asian 62.89% 4.35% Race & Gender Distribution (Dec 2002) Coloured 0.47 % 0.31% White 7.76 % 0.47% AF 110% AM 100% 90% CF 80% 70% CM 60% BF 50% 40% BM 30% WF 20% 10% WM 0% 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Actua
Slide 19: Stanger Mill Productivity
STANGER MILL PRODUCTIVITY Sappi - Stanger Mill Saleable Production per head 200 Saleable Production tons 150 100 50 0 1995 1996 1997 1998 1999 2000 2001 2002 Sep-95 Sep-96 Sep-97 Sep-98 Sep-99 Sep-00 Sep-01 Sep-02 Saleable Production per head 98 99 123 120 123 121 121 144
Slide 20: Stanger Mill Manpower Costs
STANGER MILL MANPOWER COSTS Sappi - Stanger Mill Manpower cost as a % of net sales 20% 18% 16% 14% 12% % 10% 8% 6% 4% 2% 0% 1995 1996 1997 1998 1999 2000 2001 2002 Sep-95 Sep-96 Sep-97 Sep-98 Sep-99 Sep-00 Sep-01 Sep-02 Manpow er cost as a % of net sales 13% 13% 12% 13% 12% 13% 13% 11%
Slide 21: Manpower Internal Training
STANGER MILL MANPOWER INTERNAL TRAINING TRAINING STATISTICS - 96/97 TRAINING STATISTICS - 97/98 4.00 45 3.50 60 58 3.50 40 2.92 2.98 2.98 2.98 53 3.00 49 50 35 3.00 44 2.50 2.31 2.31 2.31 2.31 2.31 2.31 2.31 2.27 30 39 40 2.50 Hours/man Hours/man 2.00 25 31 30 % 2.00 28 % 20 1.50 1.50 22 20 15 1.00
Slide 22: Manpower Internal Training
STANGER MILL MANPOWER INTERNAL TRAINING TRAINING STATISTICS - 2002/2003 3.50 60 3.01 3.00 2.76 2.75 50 2.64 2.50 40 Hours/man 2.00 30 % 1.50 22 20 1.00 18 15 10 0.50 8 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 0 0 0 0 0 0 0 0 Oct-02 Nov-02 Dec-02 Jan-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03
Slide 23: Manpower Educational Profile
STANGER MILL MANPOWER EDUCATIONAL PROFILE EDUCATION PROFILE - SAPPI STANGER DIP/DEG N3 to N6 N2 N1 STD 10 STD 9 STD 8 <STD 8 0 50 100 150 200 250 2002 2000 1998 1996
Slide 24: Team Problem Solving Structure
STANGER MILL TEAM PROBLEM SOLVING STRUCTURE GM 4 ADMIN MAN. PROD. HR. MAN. PROD. MAN. PULP MAN ENG. MAN. TECH. MAN. OTHER SUPT. 3 PROD SNR. ENG. SUPT QA. SUPT. HR. REP 2 FOCUS ADMIN. PROD. REP FOREMEN ENG. FOREMAN QA. SUPRVISORS . SBU 1 ARTISAN OPERATOR TESTER.
Slide 25: Stanger Mill Leadership
STANGER MILL LEADERSHIP Education & self development Individual assessment via CDC (career development centre) Leadership development Live by values & corporate ethics Application of performance management Goal alignment Exposure to group conferences
Slide 26: Mission: Stanger Mill
Preferred Supplier “a4 Effective Communication Skilled anal Team Orientated Peon! Salers Heath Environment Positive & Innovative Leadership Self Sufficient Local Community
Slide 27: Health and Safety
HEALTH and SAFETY O Moved from a NOSA 5 Star operation to a more encompassing CAP (Common Audit Protocol) evaluation O Addressing employee attitude to safety through a “behaviour based safety”, dealing with “at risk” behaviour O Wellness program - understanding diseases, exposures, lifestyles and fi
Slide 28: Health and Safety: Fundamentals of Observable Compliance
HEALTH and SAFETY Fundamentals of observable compliance BEHAVIOUR = an observable output CULTURE ATTITUDE •Values One’s view,evaluation or approach to a task, moves from •Beliefs positive to passive to apathetic •Norms to negative and finally destructive
Slide 29: Environmental Management
ENVIRONMENTAL MANAGEMENT O Attained ISO 14001 and manage operation by environmental aspects. O Undertaking IWMP - focus on ground water, effluent, storm water and emissions (study @ R1.9m) O Installed continuous emission monitoring on boilers and Copeland recovery system (R1.5m) O Undertaking R10m R
Slide 30: Environmental Focus
ENVIRONMENTAL FOCUS Established Environmental Liaison Committee (SSELC) Support 4 local conservancies Maintain high profile in educational circles on national environmental issues and celebratory days. Support local school’s environmental clubs. Established Bird hide on effluent lagoons for birding
Slide 31: Environment Friendly Bagasse Based Raw Material
ENVIRONMENT FRIENDLY BAGASSE BASED RAW MATERIAL Annual Mill Pulp Consumption 49000 tonnes bagasse 22000 tonnes softwood 1600 tonnes imported softwood Paper fibre composition 23-71% bagasse Tissue fibre composition 55-90% bagasse
Slide 32: Bagasse Pulp
BAGASSE PULP Fibrous residue of sugar cane processing Otherwise burned at the sugar mill or landfilled Extensive treatment to remove pith, sand, other materials which impair pulping efficiency and quality YIELD To produce 1.0 ton of bleached pulp « requires 1.1 tons screened brown stock « which requ
Slide 33: Mission: Stanger Mill
Preferred Supplier | Effective Communication Skilled and Team Orientatedl Peal Safe'd Healthy Environment _ Positive & InnovativelLeadership Self SuiticientbocaliGommunity Mission: Stanger Mull
Slide 34: Social Investment
SOCIAL INVESTMENT PROTEC - raising standards of math's, science and languages Sappi Resource Centre Recruit from the local community employees taken into apprenticeships and trainee programs. Vocational exposure of learners Donation of paper to schools. (34 tons for 2002) Support local libraries. Mi
Slide 35: R2 million Educational Resource Centre
R2 million Educational Resource Centre sappi-resource-centre.co.za
Slide 36: Mission: Stanger Mill
Pretenredjoupplien , _¢ Effective Communication Skilled anal Team Orientated Peon! Safed Healthy Environment Positive & Innovative Leadership Self Sufficient Local Community
Slide 37: Our Journey to World Class
OUR JOURNEY TO WORLD CLASS Protection removed Increased competition Increased quality demands Loss of market share
Slide 38: Our Journey to World Class
OUR JOURNEY TO WORLD CLASS T OT AL P R O D UC T IVE M AN UF AC T UR IN G Total Productive Manufacturing is a holistic approach to productivity and quality improvement which is focused on the elimination of all forms of waste or non value adding activities in the organisation. This is accomplished by
Slide 39: Our Journey to World Class
OUR JOURNEY TO WORLD CLASS BUSINESS STRATEGY MARKETING STRATEGY MANUFACTURING STRATEGY Principles: Eliminating waste, continuous small improvements, respecting employees Lowest cost, quality producer MANUFACTURING KEY SUCCESS FACTORS ORGANISATIONAL FACTORS PLANT PROCESS PERFORMANCE Goal setting Elim
Slide 40: Energise Workplace Quality Keys
ENERG ISE W O RKPLACE Q UALITY KEYS KEYS 1 Cleaning and Organising 7 Zero M onitor M anufacture 2 G oal Alignm ent 9 M aintaining M achines and 3 Sm all Group Activities Equipm ent 10 Tim e and Com m itm ent 11 Quality Assurance 12 Developing Suppliers 15 Skill Versatility and Cross Training CO ST R
Slide 41: TPM Benefits
TPM BENEFITS Improved interaction between disciplines Problem solving Best Operating Practices Ownership through involvement Job enrichment Empowerment Continuous improvements
Slide 42: Paper Machine
STANGER MILL Paper Machine 201 250 30 Net Tons per Day 25 200 190 Shrinkage % 150 20 4.2 15 100 10 5.7 50 Average Base Paper Mass 5 0 0 O N D J F M A M J J A S O N D J F M A M J J A S O N D O N D J F M A M J J A S O N D J F M A M J J A S O N D 01 02 01 02 Actual Budget Actual gsm Budget gsm Actual B
Slide 43: Tissue Machine
STANGER MILL Tissue Machine 110 20 N99 - YANKEE START UP 105 Saleable Tons per day F00 - STRIKE RUNNING 100 Shrinkage % 15 N00+D00 - YANKEE COATING 95 J02 - CUSTOMER RETURNS 90 85 81 10 80 3.7 75 5 70 76 65 5.9 60 0 O N D J F M A M J J A S O N D J F M A M J J A S O N D O N D J F M A M J J A S O N D
Slide 44: Stanger Mill Quality
STANGER MILL Quality PM Shrinkage - YTD Dec 2002 TM Shrinkage - YTD Dec 2002 B 5.7 % ACT 6.3 % LY 9.1 B 5.8 % ACT 5.1 % LY % 5.9 % CURRENT MONTH 4.2 % CURRENT MONTH 3.7spool % Start up Other bottoms 8% 4% 11% Twist Other 6% 29% Skip Level / deckle Coating Creases 25% 0% 22% Holes 6% Trim 29% breaks
Slide 45: Thank you for your interest and visit
Sappi Stanger Mill appreciates your interest in our business and your visit to our Mill