2007 Annual Report - Sappi

Interview with the
chief executive officer
Ralph Boëttger joined Sappi in July 2007 and after an
intensive induction tour took over the reins in August. He
answers a number of questions about his perceptions of the
group and his priorities, to help our shareholders understand his
plans for the future of the group.
Ralph Boëttger | Chief executive officer
Q: Ralph, what were your early impressions
of Sappi?
A: I had an intensive induction programme which took me to
virtually all the group’s operations in a month and included
in-depth briefings and meetings with many of our large
customers. What really struck me was our peoples’ passion
for the business and a desire to win. There was a high level
of awareness of our challenges and no shortage of plans to
solve them. Our people were very open and frank and I am
enjoying working with them. I would, however, have liked to
see a greater focus on generating returns rather than just
excellent paper and pulp in our operations, and I think that
is already changing.
I formed the impression that our strength is in manufacturing
and technology although some of our operations have scope
to improve. We need to further develop our customer relations
and commercial awareness as a priority.
The long-term improvements in safety statistics across the
group are impressive and we continue to prioritise further
improvements. The number of fatalities of our plantation
contractors in Southern Africa, however, is unacceptable.
A comprehensive programme has been implemented with
our contractors to tackle this, with a clear understanding
that we will not continue to work with contractors who do
not take the well-being of their employees seriously.
Our strong efforts with regard to price increases in recent
years have unfortunately resulted in some loss of market
share. One of the things we will be tackling is re-establishing
clarity in the role of sales and marketing to help us
further develop our customer relationships while improving
management of the margins we achieve for our offerings.
Q: Why are you the right person for the job?
A: I am very much aware that I have a lot to learn and have to
prove myself. However, my previous experience created a
good platform for the challenges I expect to face at Sappi.
What really counts is whether I can provide the catalyst and
the support which the team needs to get things done.
My track record is one of being close to customers and
working with people to get the most out of them and
building successful teams, but also being ready to make
the difficult decisions when necessary.
Q: Where do you see the main challenges?
A: My first priority has been to gain an understanding of
our business, getting to know the Sappi team and the
development of the plan for business year 2008. There, the
most important challenges are to restore returns in Europe
and North America. The cost pressures are enormous and
we have to find innovative ways of overcoming them, but
we also have to use our significant investment in marketing
and technology to improve our margins from the revenue
side. Developing relationships based on trust and a
common goal of profitable business with our customers is
one of the keys to this.
Q: Where are the growth opportunities?
A: Right now we are nearing the completion of the Saiccor
chemical cellulose expansion which will increase capacity
by about a third. We see further growth possibilities for
this business.
We believe we are well located for low cost fibre expansion
and are exploring a number of interesting options to
achieve this.
Our major coated fine paper markets of Europe and
North America are expected to continue growing but not
at the pace seen over the last 15 years. In these markets
there has already been some consolidation and there are
expectations of restructuring among some of the producers.
We would expect there to be some significant consolidation
moves and will look to find value-adding opportunities in
these developments.
Q: Has Sappi got the right strategy?
A: I am not rushing to change the strategy. As I have said, my
first priority is to deliver acceptable returns with what we
have. But having said that, we have a new team and that
provides us with the opportunity to re-evaluate every aspect
of our business.
It has really been delivery of the strategy that has been the
key issue in recent years.
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sappi limited | 07 | annual report