2012 Integrated report - Sappi

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Sustainability Our process 3 1 sustainable workplace woodfibre One of the greatest benefits of our paper and paper packaging and specialised cellulose solutions is that the woodfibre from which they are derived is a sustainable, renewable resource. recovered fibre plant 2 1 2 3 4 Woodfibre Our woodfibre is grown in sustainably managed forests (North America and Europe) and plantations (South Africa). We use independent, internationally accredited forest certification systems including PEFC*, FSC TM **, and SFI ® ***. These internationally recognised, independent auditing procedures mean that it is possible to trace our virgin fibre from source to end product. Globally, approximately 70.2% of the fibre we procure is certified, with the rest being procured from known and controlled sources. We do not source from old-growth or endangered forests anywhere in the world. Non-certified pulp and fibre In terms of non-certified fibre, wood/pulp is sourced from known and trusted suppliers close to each mill, regularly visited by our buyers. Certification requirements are incorporated into our purchasing specifications and contracts and are in line with our ISO 14001 accredited purchasing policy. Mitigating climate change The sustainably managed forests and plantations from which we source woodfibre, help to mitigate climate change. They do this by absorbing carbon from the atmosphere. Sappi and recovered fibre Sappi specialises in the manufacturing of high quality coated printing papers – something not easily accomplished with high recovered fibre content. There is some confusion in the marketplace as to why uncoated papers can be manufactured with very high levels of post-consumer waste content, yet coated papers, such as those manufactured by Sappi, often cannot. For the same weight of coated paper vs uncoated paper, the coated papers have more clay and less fibre which reduces their strength. Adding recovered fibre reduces the strength even further which can affect the runnability of paper on a printing press. A constant input of virgin fibre into the manufacturing of high quality papers will always be necessary because recycled wood fibres are typically worn out after five to eight cycles, depending on the type of fibre and products recycled. Regional recycling rates Recovered fibre is a locally and globally traded commodity. In Europe, North America and South Africa, the recovery rates of paper consumed are 70.4%, 66.8% and 60% respectively. Sustainable workplace Our pulp, paper and dissolving wood pulp solutions touch the lives of millions of people around the world; create direct employment for approximately 14,000 people and indirect employment for thousands of others; have a positive impact on communities and generate significant economic benefits. Through best practice training programmes, our focus is on equipping our people with the skills that help promote their own development and help us build a worldclass organisation. Safety is a top priority throughout our operations and is driven by our global safety programme Project Zero. Through our corporate social responsibility programme, we invest in the socio-economic development of the communities in which our operations are situated. Lean manufacturing We use the principles of lean manufacturing to reduce energy, re-use resources and minimise waste throughout our mills. Pulp, paper and dissolving woodfibre Some of our paper mills buy in pulp, while others are integrated (make both pulp and paper). The pulping process for paper involves the use of cellulose and hemicellulose in woodfibre for its physical properties. The pulping process for dissolving wood pulp, however, uses only cellulose for its chemical properties, making the process more expensive, but resulting in a highly specialised product with high added value. Energy Energy costs are rising significantly in each area where we operate. So too are concerns about greenhouse gases (GHGs) in the earth’s atmosphere. Against this backdrop it makes sense to aggressively manage our energy usage and promote the use of renewable energy. Globally, 50.3% of energy used in our mills is derived from renewable sources. In addition, over five years our specific purchased (per air dry ton of pulp) energy usage has decreased by 19.6%. 16 * PEFC – Programme for the Endorsement of Forest Certification, ** FSC TM – Forest Stewardship Council TM , *** SFI ® – Sustainable Forestry Initiative.
4 electricity steam black liquor pulp mill white liquor chemical recovery 5 manufacturing operations electricity steam CO 2 by-product (released into atmosphere) pulp and paper products dissolving wood pulp mill landfill 7 6 distribution centre/ converters printers paper collection specialised cellulosic textiles and non-woven fibre products 4 continued 5 6 7 Water Globally, we return approximately 92% of process water to the environment. Over five years our specific water usage has decreased by 10.5%. Transportation Throughout our operations we are focused on streamlining our transport processes. For further information go to our regional sustainability reports or our group online report available at www.sappi.com. Carbon dioxide Our focus is on reducing our carbon footprint by improving energy use efficiency and decreasing our reliance on fossil fuels. We are achieving this by making process changes, installing more efficient equipment, reducing purchased energy (electricity and fossil fuel) and by increasing our use of renewable energy – an approach that ultimately results in a reduction in CO2 emissions. Globally, over five years, Scope 1 (direct) and 2 (indirect) CO2 emissions have dropped by 18.5%. Our customers Paper is transported to regional distribution centres, merchants and printers. Designers specify paper which printers convert into products such as books, magazines, brochures, bags and labels. The dissolving wood pulp we produce at Saiccor Mill accounts for 15% of global demand and is exported from South Africa to markets mostly in Asia and Europe. We will increase capacity by 63% in 2013. Our dissolving wood pulp is used in the manufacture of cellulosic textiles and non-woven fibre products used in the fashion, pharmaceutical and consumer markets. Landfill Decomposition of organic materials in landfills can generate methane, a greenhouse gas with a global warming potential of approximately 25 times higher than CO2. Recovering and recycling paper and board helps to minimise the emissions associated with landfill. Over five years the amount of solid waste we send to landfill offsite has decreased by 31.4%. sappi Integrated Report 2012 17
Page 1 and 2: Sappi Group (Sappi Limited) INTEGRA
Page 4: About this report Introduction Our
Page 7 and 8: 2012 was a year that positioned us
Page 9 and 10: global Sales by source 2012: US$6,3
Page 11 and 12: Non-financial highlights Specific p
Page 13 and 14: performance the region as a whole.
Page 15 and 16: The restructuring of our paper oper
Page 17 and 18: Group overview continued Q&A with R
Page 19: Focus on product development Produc
Page 23 and 24: commitment Europe Our European empl
Page 25 and 26: iodiversity Sustainable fibre suppl
Page 27 and 28: Exciter value delivery was US$23.9
Page 29 and 30: market leaders > Print is particula
Page 31 and 32: Focus on innovation Knowledge, insi
Page 33 and 34: Pulp Share of sales paper pulp + di
Page 35 and 36: governance Deenadayalen (Len) Konar
Page 37 and 38: guidance Executive management Mark
Page 39 and 40: Review of operations Sappi Fine Pap
Page 41 and 42: streamlined The closure of the Bibe
Page 43 and 44: Focus on skills development Sappi c
Page 45 and 46: accelerate Capacity (’000) Divisi
Page 47 and 48: progress The year ahead The demand
Page 49 and 50: US$ million September 2012 Septembe
Page 51 and 52: Share statistics 2012 2011 2010 200
Page 53 and 54: Chief financial officer’s report
Page 55 and 56: positive Section 2 Financial perfor
Page 57 and 58: improvement Operating profit exclud
Page 59 and 60: cost reduction Taxation The tax exp
Page 61 and 62: service Sappi Fine Paper North Amer
Page 63 and 64: priority Section 4 Cash flow In the
Page 65 and 66: Defined benefit liabilities US$ mil
Page 67 and 68: Group debt profile We show the majo
Page 69 and 70: performance Section 6 Share price p
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Governance and compensation Corpora
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encourage Audit committee The audit
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Group IT steering committee The Gro
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During 2012 a board committee was e
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Governance element Principle Summar
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External assurance providers Report
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Principle Chapter 7 - Internal audi
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Stakeholder engagement report Sappi
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Compensation report The two large s
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strategic The primary components of
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Component Purpose Characteristics V
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competitive The policy on fatalitie
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empower Service contracts Mr Boëtt
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The dissolving wood pulp capacity c
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Focus on local communities Our busi
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Directors’ approval The directors
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Audit committee report for the year
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Directors’ report for the year en
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Group income statements for the yea
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Group statements of cash flows for
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Group income statements in Rands (c
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Group statements of cash flows in R
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Notes to the group annual financial
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Annexure A - Investments at Septemb
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Glossary market pulp - pulp produce
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Glossary net operating assets - tot
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Notice to shareholders “Resolved
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Notice to shareholders “Resolved
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Notice to shareholders Annexure to
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Notice to shareholders The MOI prov
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Shareholder’s diary Annual genera
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Notes to proxy The form of proxy mu
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Inspired to co-create We operate wi
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2012 Integrated report - Sappi

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