'Sawubona' to Sandile

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The financial year in review The financial year ending February 2012 has been one of the toughest in Astrapak’s existence, one that shareholders aren’t particularly happy about and one that we as a Group don’t want to repeat. While turnover was up a marginal 3.4% to R2.518 billion over the previous year, this was mainly on the back of increased selling prices – in fact, volumes through our plants were down 1.1%. Increasing production costs – primarily because of higher raw material, energy and labour charges – were one of the main reasons behind an almost 50% drop in profits. However, I’m pleased to report that costs associated with selling, administration and distribution overheads rose a marginal 0.6%, thanks to everyone who did their bit to keep these costs in check. The main reasons contributing to our less-than-satisfactory financial performance were: • A continuing generally soft economic climate, which kept consumers under pressure and with little extra disposable income. • Decreased volumes in the market, which kept competitive activity at fever pitch, with many sacrificing price just to keep their plants running. • The industry-wide strikes in July 2011, which affected almost all of Astrapak’s operations, and those of many of our customers once we were back at work! • The supply of raw materials was problematic, which led to stock-outs and, in some cases, overstocking at higher prices. • The decision in the second half of the year to reduce the number of Flexible operations, which incurred significant one-off charges through the early termination of leases, close-down trading losses and retrenchment costs. A total of five operations have been reduced in size, merged with others or discontinued. • A thorough assessment of all the Group’s assets was done. The writedown of some assets affected the bottom line. Lower profits, costs associated with the strategy to reduce the Flexibles footprint, the decision to continue with the R265.9-million capital expenditure programme and increasing inventory levels to cope with erratic supply – these had a real impact on our gearing, with our net debt increasing to R500.3 million from R340.2 million in the previous year. This situation was aggravated by customers extending payment terms, and our net working capital increased by 6.3%, which represents a 50-day net working capital cycle compared to our target of 45 days. We’ll continue to focus on cash generation, prudent capital allocation, and treasury and working capital management activities to normalise these aspects over the next few months. Looking forward, there appears to be no short-term fix for the bigger issues facing us: consumers, who’re the end-users of almost every product we manufacture, will continue to be under financial pressure over the next year. Fuel prices are at their highest levels ever recorded, electricity prices are about to go through their fourth yearon-year double-digit increase, and food costs are outstripping published inflation levels. Having said that, there are reasons to be optimistic. • We’ve invested heavily in new technologically advanced equipment in many operations. • There are a number of new projects that should start during this year. • We’ve reduced our operational footprint cost base. • The new equipment should see increased volumes through fewer plants at higher efficiency and with improved quality and reduced waste. • Our roll-out of World Class Manufacturing continues and real positive results are being experienced around the Group. • Transformation, training and staff development are continuing priorities as we strive to ensure that our people are suitably trained and capable of dealing with an increasingly competitive marketplace. It’s been a tough year and there’ll be no free rides in the one to come. But the fundamentals are in place. We need to work as a team to implement our financial 2013 and restore Astrapak as the country’s leading plastic packaging manufacturer. 4 ASTRAPAK NEWS
Consupaq WCM trainer wins award Trust Ndlela, World Class Manufacturing facilitator and trainer at Consupaq, was nominated for an award at this year’s round of conferences for his exceptional talent in communicating WCM principles to all levels of employees within the business, specifically to shopfloor staff. He tells Unpacked a bit more about the challenges. As part of any World Class Manufacturing (WCM) journey, a few people are chosen to become trainers, responsible for upskilling the shopfloor team. Most of these new trainers don’t have any prior training background, so not only do they need to learn all aspects of WCM, they also have to understand how to train adults. Trust Ndlela, WCM trainer and facilitator at Consupaq, says that there’s a lot of hard work that goes into it after hours – preparation of material is a key element. But that’s just the beginning. Trust Ndlela receives his award from KZN regional chief executive Gareth Elcox. a team, self-discipline and drive,’ says Trust, whose own learning curve was hands-on, with exposure to operations and production management skills, and the opportunity to learn at first hand how a successful business operates. Looking back at the progress Consupaq has made since implementing WCM in 2009, Trust says, ‘There’s been a cultural shift. We challenge each other to think and behave in a way that reflects our goal of being a worldclass company. The common vision environment. The business has grown and is set to grow and become even more successful.’ Trust’s biggest challenge as a trainer is ‘interacting with people who have little previous exposure to formal training, and expect little or no benefit from the training’. The reward? ‘Seeing the same people having grown in confidence because they’ve done what they thought wasn’t possible, which is to learn something new that will indeed benefit them.’ ‘A good facilitator must be an inspiring visionary. He must be able to translate and simplify the vision to all in such a way that learners understand and buy into it.’ – Trust Ndlela Good communication skills are vital, and aspects such as body language and vocal skills can make or break a session, he says. ‘The skills required from a facilitator are good communication skills, good listening skills, the ability to work within of World Class Manufacturing has pulled our efforts together as opposed to previous segmented efforts. That shared vision is the fundamental driver of all our endeavours, from the factory to operations and through to human resources. It’s a cleaner, safer, more efficient and pleasing work He believes that the most important ingredient in being a top trainer is passion. ‘When a trainer is excited and passionate about the WCM process, this enthusiasm comes through in everything that’s said and done, and this is a surefire way to ignite the same passion in learners.’ And Trust has clearly been successful. He earned his award for his exceptional talent in communicating WCM principles to all levels of employees within the business, and specifically to shopfloor staff, by adapting textbook knowledge into a format that makes sense to them. The success of his efforts is clearly evident in the overall performance by Consupaq in WCM practices. ASTRAPAK NEWS 5
Page 1 and 2: A world of opportunities June 2012
Page 3: Message from the CEO’s office I
Page 7 and 8: Proud of our people Marcom’s succ
Page 9 and 10: Still in play: Harry Phiri After th
Page 11 and 12: Meet our new people person Mefane M

'Sawubona' to Sandile

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