Sappi Limited · JSE:SAP
Sappi — Investor Presentation (February 2003)
32 slides from Sappi's investor presentation, Feb 11, 2003
Slide 1: Saiccor Investment Analysts Visit
Saiccor Investment Analysts Visit Saiccor 11 February 2003
Slide 2: Sappi Group Strategy: Why Dissolving Pulp
Sappi Group Strategy Why Dissolving Pulp • Saiccor are the market leader • Global chemical business (cellulose) • Lowest cost producer, thus higher return • Virtual pulp hedge • Generate cash Investment Analysts Visit Saiccor 11 February 2003
Slide 3: Sappi Group Strategy September 2002
Sappi Group Strategy September 2002 Share of Group’s Sales Share of Group’s Operating Income Fine Papers Saiccor Forest Products ex Saiccor Investment Analysts Visit Saiccor 11 February 2003
Slide 4: Saiccor's Business Mission Statement
Saiccor’s Business Mission Statement To be the global leader in innovative and sustainable solutions with chemicals created from trees Investment Analysts Visit Saiccor 11 February 2003
Slide 5: Saiccor's Business: Dissolving vs Paper Pulp
Saiccor’s Business Dissolving vs Paper Pulp Extractives 5% Paper Pulp Lignin 20% ¾ Physical properties Hemi-Cellulose 30% ¾ Lignin undesirable (Branched, short chain molecules, polymer of five different sugars) Dissolving Pulp Cellulose 45% (Long chain, unbranched molecules, ¾ Chemical Properties po
Slide 6: Saiccor's Business: Dissolving Pulp
Saiccor’s Business Dissolving Pulp Trees Pulp Mill Pulp Investment Analysts Visit Saiccor 11 February 2003
Slide 7: Saiccor's Business: Viscose
Saiccor’s Business Viscose VS Fibre Yarn Textiles Investment Analysts Visit Saiccor 11 February 2003
Slide 8: Saiccor's Business: Dissolving Pulp End Uses
Saiccor’s Business Dissolving Pulp End Uses Commodity Grade (92a) z Viscose Staple z Non-wovens Specialities (94a) z Lyocell z Filament z Film z Other Applications Specialities (96a) z Acetate Investment Analysts Visit Saiccor 11 February 2003
Slide 9: Saiccor's Business: DP Capacity
Saiccor’s Business DP Capacity Estimated World DP Capacity 2003 Domsjo 3% Borregaard/Attisholz Kotlas 4% 8% Tembec 0.7 Million 5% 0.6 Million 1.4 Million 6 Mills Rayonier 8 Mills Weyerhauser 8 Mills 0.5 Million 4% 10% 8 Mills *International Buckeye Paper 4% 4% 0.1 Million Bacell 1 Mill 3% 0.6 Millio
Slide 10: Saiccor's Business: DP Consumption
Saiccor’s Business DP Consumption Estimated World DP Consumption 2003 (End Use) Ethers Acetate MP Filament Other Lyocell VSF and Film Integrated VSF Total = 3,5 m tons Investment Analysts Visit Saiccor 11 February 2003
Slide 11: Saiccor's Business: Sales Mix
Saiccor’s Business Sales Mix Total Sales Specialities Speciality Sales Moulding Powder Acetate VSF Others Ethers MCC VFY Cellophane Lyocell Investment Analysts Visit Saiccor 11 February 2003
Slide 12: Saiccor's Business: Sales by Region
Saiccor’s Business Sales by Region Local Americas NE Asia SE Asia Europe Asia Investment Analysts Visit Saiccor 11 February 2003
Slide 13: Saiccor's Business: Strengths
Saiccor’s Business Strengths z Low cost base z Virtually 100% USD based export sales z Highly depreciated, but well maintained, plant z Capacity of a very well run plant z Geographic location z Multi line operation z Benchmark product in VSF z Strong position in Lyocell technology z Profitability to
Slide 14: Saiccor's Business: Opportunities
Saiccor’s Business Opportunities O Diversification into Acetate, Ethers and other end uses O Exploitation of the “technology vacuum” O Leverage of technical leadership O Development of Electron Beam technology O Closure of International Paper’s Natchez mill O Current and future growth of LignoTech S
Slide 15: Mill History: Key Milestones
Mill History Key Milestones z Saiccor registered 12 September 1951 ( Courtaulds, Snia Viscosa, IDC ) z First Italians arrived 23 April 1954 z First DP produced 01 December 1955 z Sappi bought Saiccor in 1988 z Mkomanzi expansion in 1995 Investment Analysts Visit Saiccor 11 February 2003
Slide 16: Mill History: Plant Profile
Mill History Plant Profile Wood Logs / Chipping 5 000 t/day Exported to: Asia, Europe 85% Eucalyptus (Gum) and 15% Acacia (Wattle) the America’s Bleaching Oxygen (O) Batch Cooking Chlorine Dioxide (D1) 60% Calcium Caustic Soda (E) and Chlorine Dioxide (D2) 40% Magnesium Washing /Screening Hypochlori
Slide 17: People: Training and Development
People Training and Development z ABET - 134 Registered z Engineering Improvership - 49 Artisans since ‘91 z Apprenticeship - 11 enrolled (10 AM) z Technician Training - 5 enrolled (4 AM) z Pulp & Paper “N” courses - 64 N1 & N2, 41 N3+ z Study assistance - 44 Enrolled Investment Analysts Visit Saicc
Slide 18: People: HIV/Aids
People HIV/Aids z Prevalence survey completed in June 2001 z 77% participation z HIV +ve z Saiccor = 5.7%, Contractor = 19.9 z Saiccor total = 10.6% z Highest prevalence < 30 years old Production staff z Actions z Communicated the “good” news z Peer educators established z Taking awareness to contra
Slide 19: People: Safety Management
People Safety Management z NOSA 5 star history. z Common Audit Process (over last three years). z Compliance from 62% to 77% (Group ave 52%). z Behaviour Based Safety (SHARP). z Peer driven, observations & elimination of “at risk” behaviour z Target ISO 18000 certification by December 2003 Investmen
Slide 20: People: Safety Statistics
People Safety Statistics No. Injuries X 200 00 Lost Time Trend = Manhours Worked 3 2.5 2 1.5 2.6 2.48 1 1.98 0.5 0.87 0.87 0.99 0.89 1 0.67 0.54 0.28 0.31 0.39 0.22 0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Investment Analysts Visit Saiccor 11 February 2003
Slide 21: Environment
Environment Saiccor attained ISO 14000 certification in Dec 2001 Air Emissions – SO2 site limit 12 tpd Liquid Effluent Discharge – LTSA Expansion Investment Analysts Visit Saiccor 11 February 2003
Slide 22: SO2 Normal Emissions
SO2 Normal Emissions 80 70 60 50 TPD 40 30 20 Current site limit 10 0 1986 1988 1990 1993 1995 1996 1997 to 2003 2004 Investment Analysts Visit Saiccor 11 February 2003
Slide 23: Environment: Liquid Effluent
Environment Liquid Effluent 50 FATHOMS (91,5m) NORTH 6.5km 30 FATHOMS (54,9m) ALIWAL SHOAL : 5,5km 20 FATHOMS (36,6m) 3km UMKOMAAS 10 FATHOMS (18,3m) ILLOVO BEACH UMGABABA GREENPOINT HOTEL SCOTTBURGH Investment Analysts Visit Saiccor 11 February 2003
Slide 24: Environment: Liquid Effluent
Environment Liquid Effluent 6.5 Investment Analysts Visit Saiccor 11 February 2003
Slide 25: Vision
Vision To be the Global Leader in Innovative and Sustainable Solutions with Chemical Products Created from Trees Investment Analysts Visit Saiccor 11 February 2003
Slide 26: Technical Excellence in Viscose Technology
Technical Excellence in Viscose Technology Strategic Opportunity • Cellulose, an intractable, difficult to dissolve polymer • processing requires technical competence • decline of technical resource and competence in industry • Saiccor is exploiting this technology vacuum Technical Leadership • inno
Slide 27: Broaden Product Range - Speciality Cellulose
Broaden Product Range - Speciality Cellulose Market Participation is largely based on: • Pulp properties derived from furnish and process • Ability to meet customer demands (quality and consistency) Key factors for success include: • Close customer ties and customer service/application infrastructur
Slide 28: Competence Driven Product Development
Competence Driven Product Development Competency and Knowledge in: • Customer process and raw material influence • Our process and how to influence change properties - ‘tailor-making’ products • Cellulose fundamentals - solvation and structure formation • Emerging technologies and how to exploit the
Slide 29: Saiccor Technology Centre
Saiccor Technology Centre Resources Facilities • Extra staff recruited • Tech Centre building • Industry ‘experts’ • Pilot equipment contracted installed • IP Natchez staff? • Tree to fibre capability by April Investment Analysts Visit Saiccor 11 February 2003
Slide 30: Saiccor Technology Centre
Saiccor Technology Centre Networks/Collaborative Customer Specific Research Development • Local Universities • Viscose • TU Dresden & PIRA • Acetate • CSIR/FFP • Lyocell • Sappi Tech Centres • MCC Investment Analysts Visit Saiccor 11 February 2003
Slide 31: Product Flow Concept
Product Flow Concept Lower density LV Film Grade Lyocell (improved Lyocell 94 LV Lyocell sheet/dissolution) Product Lyocell 92 5 6 7 Launch ‘White’ MP Grade Acetate Grade Technology Scale-up 4 E-beam VSF Higher MCC LODP CCE Grades Fibre Fractionation Viscose Reactivity Enzyme Ethers Fibre Typing Pro
Slide 32: Enjoy the Plant Tour
Enjoy ENJOY theTHE Plant tour PLANT TOUR Investment Analysts Visit Saiccor 11 February 2003