Adding gloss to Colgate Palmolive's packaging

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A mixed bag on the financial sideThe financial year that ended in February had a couple ofhighlights but these were overshadowed by aspects that didn’tperform to our expectations.4.9%1.9%37.1%3.5%VolumesNon-operationalCostsHeadline EarningsPer ShareTurnoverThe good news first: Group turnoverwas up to R2.71 billion (2010 : R2.61billion), an increase of 3.5% over lastyear, and on the volume side we had animpressive increase of almost 5%. Whenyou consider the general state of theeconomy – a highly competitive market,and slow consumer demand coupledwith declining selling prices – these weretwo very positive developments.And now for the bad news: increasingelectricity, labour, distribution anddepreciation costs all had a majorimpact on operational profitability,and while turnover was up, so were ourmanufacturing expenses. This led to analmost 12% drop in profit. (One positiveaspect was that our non-manufacturingcosts increased by a marginal 1.9%,which represents good control on theselling, administration and distributionoverhead side.)Some of the factors that contributed tothe less-than-stellar results were:• A protracted period of industrialaction during the last financial year atseveral of our operations, including ourbiggest single plant which, in additionto lost operational revenue, cost theGroup an additional R45 million.• A lethal cocktail of increasedcompetition with aggressive sellingprices as competitors strive to keepplants busy in the face of decliningconsumer demand, plus pricingpressure from customers.• An environment that made itextremely difficult to timeously recoupincreased electricity and raw-materialprice increases.• Increased depreciation costs dueto the delay in implementing a line ofequipment that was installed butnot fully operational.In spite of the results, the Group is stillcommitted to its capital expenditureprogramme, because it’s by investingin technology that we’ll secure ourfuture. Plastic packaging is going to bewith us for a long time to come, as itremains one of the most cost-effectiveways of protecting and presentinga wide range of products. We mustensure that we’re able to not onlymeet the needs of the future but beinnovative and set the trends.On the corporate front it was arelatively quiet year. The Groupacquired the remaining shares in thePlastech group, while at head officeGene Lapan resigned from his positionas company secretary and XolisaVabaza was appointed to the post. Seepage 5 for more on Xolisa.What of the future? You only have tolisten to the radio or read a newspaperto know that there are still toughtimes ahead. Astrapak is in it for thelong haul, however. Our commitmentto new plant and equipment istestimony to that, but it will still requirea concerted effort from everyone inthe Group to help it make it happen.A machine is a machine is a machine;it’s the people who make the machineperform its wonders.2ASTRAPAK NEWS
Is this the winterof our discontent?In addition to someextremely cold weather,ongoing global economicuncertainty and tough localtrading conditions, we’vejust come through a spateof industrial action that hasme wondering if labour andbusiness read or hear thesame news.Ifully support the collectivebargaining process, the role thatlabour plays in ensuring equitableworking conditions for theirmembers and the opportunity to strikeas a democratic right. But at the sametime I have to ask if the latest roundsof work stoppages in almost everyindustrial sector are what South Africareally needs.The world is in financial meltdown; theUnited States has come to the brinkof defaulting on its debt, Greece isin a major financial crisis, the UnitedKingdom has introduced stringentausterity measures and economiesaround the globe are losing jobs.In South Africa the PurchasingManagers’ Index – a reliable gaugeof the state of manufacturing – hasdropped to its lowest point in two years,and the Reserve Bank’s most recentbulletin indicates that nominal unitlabour costs have tripled since 2000.Unemployment now stands at 25.7%– the highest in seven years. Yet, inthe face of these unpleasant realities,we’ve just experienced some of themost ill-disciplined industrial actions everon Astrapak property. I’m extremelydisappointed at this.Astrapak has gone through massivechanges over the past two years or so.But every action we’ve taken has beenwith the goal of making our operationsglobally competitive, through newtechnology, world-class manufacturingprocesses, improved quality andcutting-edge innovation. These are theattributes that will lead to not only jobsecurity for our existing workforce butjob creation in the long term. Everysingle staff member has a responsibilityto play his or her part – and thatapplies equally to the shop floor andhead office.Chief Executive Officer Marco Baglione addressed staff at the recent regional conferences held in CapeTown, Durban and Johannesburg.We’ve gone to great lengths to improvethe communication channels withinthe Group. My regular emailer goesto every person who has a companyemail address, Unpacked is distributedto every employee, and staff wereencouraged to attend the regionalconferences held recently in the maincentres. On top of this, every operationhas its own internal communicationchannels. In short, there are lots of waysto make your voice heard.If we are to grow as a Group and acountry, we all need to see the biggerlong-term picture. Sure, double-digitwage increases may be a victory in theshort term, but if these mean job lossesor factory shutdowns because we’reglobally uncompetitive, then what havewe achieved?The business environment is extremelytough: consumers are cutting back,electricity prices have increased morethan 20% per annum for the past threeyears, and we’re under threat from anavalanche of imports. This is not the timeto play hard ball on the labour front. Weneed to pull together, understand whatthe long-term objectives are and throwour full weight and enthusiasm behindmaking Astrapak – and South Africa –successful. This is the time to lead andbuild, not break down and destroy.Join me in leading. I’m excited atmaking Astrapak and every staffmember great.RegardsASTRAPAK NEWS3
Page 4 and 5: It’s a wrap at TristarThe recent
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Page 9 and 10: Renske Snymangetting it right the f
Page 11: Shooting starElliott Gasa has spent

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