Sappi Limited · JSE:SAP
Sappi — Investor Day (December 2019)
56 slides from Sappi's investor day presentation, Dec 5, 2019
Slide 1: Sappi Dissolving Wood Pulp
Sappi Dissolving Wood Pulp sappi| Verve
Slide 2: Sustainable fibre for a thriving world
Sustainable fibre for a thriving world
Slide 3: Dissolving Wood Pulp operations
Dissolving Wood Pulp operations 3
Slide 4: Sappi Dissolving Wood Pulp Locations
Sappi Dissolving Wood Pulp Locations Ngodwana Cloquet Saiccor 4
Slide 5: Cloquet
Cloquet Sappi Cloquet • Location: Duluth, Minnesota USA • 370ktpa Prehydrolysed Kraft dissolving pulp • 100% Hardwood – Aspen/Maple mix • Bleach sequence OO-ZMC/D-EOP-D • DWP and paper 5
Slide 6: Ngodwana
Ngodwana Sappi Ngodwana • Location: Nelspruit, Mapumalanga, South Africa • 250ktpa Prehydrolysed Kraft dissolving pulp • 100% Hardwood – Eucalyptus • Bleach Sequence O-D-ZHC/EOP-D • DWP and paper 6
Slide 7: Ngodwana Project Eagle - Scope
Ngodwana Project Eagle - Scope Project was executed in 2 phases to enable DWP production increase from 190kt/a to 250kt/a Eagle 1(FY16/17) focused on quality and reliability Eagle 2(FY18/19) focused on throughput and sustainability initiatives 7
Slide 8: Ngodwana Project Eagle - Delivery
Ngodwana Project Eagle - Delivery Key project successes include: Project manhours >1million with LTIFR at 0.19 for Eagle 2 Project delivery utilizing in-house project management and incorporating local labour Project on time and within budget with plant ramp up ahead of plan Project curren
Slide 9: Saiccor
Saiccor Sappi Saiccor • Location: Umkomaas, KZN, South Africa • 780ktpa Sulphite dissolving pulp • 100% Hardwood – Eucalyptus and Acacia • Bleach Sequence O-D-EO-D-H • DWP only 9
Slide 10: DWP markets
DWP markets 10
Slide 11: Fibres on the world market
Fibres on the world market Source : Lenzing. 11
Slide 12: Textile Market Fibre Production
Textile Market Fibre Production Source : Textile Exchange Market Insights report 2018. 12
Slide 13: Textile Market Fibre Production
Textile Market Fibre Production Source : Textile Exchange Market Insights report 2018. 13
Slide 14: Dissolving Pulp and its Uses
Dissolving Pulp and its Uses DISSOLVING PULP DISSOLVING WOOD PULP COTTON LINTER PULP 2019 Mostly China Rayon – 6,233ktpa Specialities – 1,404ktpa CMC/ethers, Cellophane, Filament, Tyre cord, VSF Lyocell MCC Acetate Others Nitrocellulose, Plastics, Sponges Wear Heal Eat/Drink Wash/Wipe Mend Communica
Slide 15: Viscose Staple Fibre Value Chain
Viscose Staple Fibre Value Chain Value (Price) multiplies more than tenfold Wood Pulp Cellulosic Fibers Textiles Fabrics End-use Products Retail Nonwovens End-use Products Retail • Beech • Dissolving Wood • Viscose • Woven • Apparel • Eucalyptus pulp Producers • Lyocell • Knitted • Home Textiles • W
Slide 16: DWP global Market
DWP global Market Source : Sappi estimates.
Slide 17: Textile Value Chain Sustainability
Textile Value Chain Sustainability 17
Slide 18: Technical Value Proposition
Technical Value Proposition Krelyne Andrew 1
Slide 19: Product Innovation – on a Global Scale
Product Innovation – on a Global Scale Intellectual capital : Our technology centres and research and development (R&D) initiatives promote a culture of innovation to support the development of commercially and environmentally sustainable solutions for the company. Forestry Research Centre Sappi Fin
Slide 20: DWP R&D Through the Value Chain
DWP R&D Through the Value Chain Dissolving Pulp Value Chain Forests Pup Mill Fibre Producer Sappi R&D Value Chain Forestry R&D Fibre Processing R&D Applications R&D Intentional evolution 3
Slide 21: Process & Product Complexity
Process & Product Complexity bales are fed to steeping tank Alkali cellulose (Alkcell) slurry 1000’s of viscose filaments are regenerated The tow is stretched between heated rollers to orient the cellulose molecules
Slide 22: Global Coordination of Technical Initiatives
Global Coordination of Technical Initiatives Quarterly DWP Cluster Meetings Weekly Quality Meetings Quality Benchmarking Quality Review Best Practice Process Deviations/Trials Knowledge Sharing Customer Complaints R&D Review & Coordination (biannual) R&D Projects 5
Slide 23: 6
6
Slide 24: Sustainability Trends
Sustainability Trends 1 Krelyne Andrew
Slide 25: Influencers & Sappi Response
Influencers & Sappi Response Textile exchange MMCF 2
Slide 26: Textile Value Chain
Textile Value Chain Complex supply chain Lack of visibility over Dirty, Fast & Unethical Fashion supply chain has often Most resource-intensive resulted in toxic pollution, industries Civil Society– ‘Doughnut Economics’ unethical labour practices and in the world escalating waste,. 150 million
Slide 27: Sustainable Fashion and Fibre
Sustainable Fashion and Fibre 4
Slide 28: Preferred Supplier Status
Preferred Supplier Status Transparent and Traceable Supply Chains Collaboration with NGO’s &, brand owners Greening the value chain Certified Pulp Water Stewardship Low Carbon Economy Circular Economy Life Cycle Analysis Conservation and Biodiversity 5
Slide 29: Sustainable Fashion
Sustainable Fashion mconscoys Re UTA More’ sustainable fashi doing the right thing because We've only got one world and time is runni =f A.story of Sustainable Viseosé es
Slide 30: Sustainable Fibre
Sustainable Fibre ® Lenzing™ EcoVero™ fibers are the innovative and unique answer to the increasing demand a for sustainable products along the textile = value chain ; © Worldwide highest environmental standards 30 in the viscose production relying on three major : srwaracacyontoea pillars a8 Water
Slide 31: Sustainable Forests
Sustainable Forests 8
Slide 32: Sustainable Forests
Sustainable Forests MAIN INFLUENCERS Leaders Group (H&M, Zara, Stella, Eileen Fischer) 210 Members across 25 countries Support of 150 Global Brands CanopyStyle Audits KEY FOCUS Fibre producer pulp sourcing Fibre producer sourcing practices Preferred Fibres Report Hot Button Report
Slide 33: Sappi Dissolving Wood Pulp
# Sappi Dissolving Wood Pulp Sappi DWP operations were recently given a green rating by Canopy Member of Textile Exchange (2019) Participated in the MMCF roundtables in Berlin and Vancouver Sponsor at the annual Textile Exchange Conference Visibility with Fashion Brands created 10
Slide 34: Sappi Dissolving Wood Pulp
# Sappi Dissolving Wood Pulp Pulp to Forests Traceability project in progress o Customer Portal o Blockchain integration 11
Slide 35: Sustainable DWP Operations
Sustainable DWP Operations 12
Slide 36: Sustainable Operations
Sustainable Operations MAIN INFLUENCER 250 members 35 Countries $500 billion in revenue 13
Slide 37: Sappi Dissolving Wood Pulp
# Sappi Dissolving Wood Pulp Member of Sustainable Apparel Coalition - 2019 Completed a self assessment of the Higg FEM Module for all DWP operations 14
Slide 38: Air Emissions
Air Emissions MAIN INFLUENCERS UNFCCC: - Fashion Charter for Climate Action KEY FOCUS GHG Emissions Science Based Target (SBTi) KEY TARGETS 30% reduction by 2030 Carbon neutral by 2050 No new coal fired boiler capacity 15
Slide 39: Water Stewardship
Water Stewardship MAIN INFLUENCERS KEY TARGETS Zero Discharge of Hazardous Chemicals (ZDHC) EU BAT compliance Cradle 2 Cradle (C2C) EU Ecolabel compliance Total Chlorine Free (TCF) Changing Markets Foundation Zero release of hazardous chemicals Bluesign Microplastics FOCUS AREAS
Slide 40: Sappi Dissolving Wood Pulp
# Sappi Dissolving Wood Pulp Water Risk Forecasting Specialist Study (External consultants) Water availability identified as significant risk for SA Identify Saiccor key water risk areas and significance in the short, medium and long term Enhance existing water strategy 17
Slide 41: Sappi – WWF Partnership
# Sappi Dissolving Wood Pulp Sappi – WWF Partnership Established in 2019 uMkhomazi catchment water resources assessment Partnering for Water Security Proposal 18
Slide 42: Sappi | Verve
appi| Verve *
Slide 43: Vulindlela Opening the way
Vulindlela Opening the way ….for future investment 1
Slide 44: Project Overview
Project Overview “This investment will secure the mill’s future by increasing its global cost competitiveness and significantly reducing its environmental footprint.” Alex Thiel, CEO – Sappi Southern Africa To decrease production costs, introduce new technology, optimise processes and future-proof m
Slide 45: Investment & Government Support
Investment & Government Support • Production increase from 780 000 to 890 000 t/y with investment in Phase 1 • Additional increase to 1 000 000 t/y with investment in Phase 2. Vulindlela was the first project showcased at President Cyril Ramaphosa’s Investment Conference last year. 3
Slide 46: Major Capital Equipment
Major Capital Equipment • Production increase to 890 000 t/y to be achieved via: • New chip feeding system • 8 new Digesters • 1 new LD storage Tank • 1 new deknotting, washing and screening plant • Upgrades to Bleach Plant #3 and Continua #4 New Wash Presses in position C4 Screening Upgrade in posi
Slide 47: Major Capital Equipment
Major Capital Equipment • Increased chemical recovery and Energy via: • 1 new evaporation plant • 1 new Recovery Boiler • Improved emissions via: • 1 new low SO2 emission SRP system • S3 stage addition to MgO3 • Water Savings via: • Wash press installation • New pulp chests and pulp blending Evap Ef
Slide 48: Energy Benefits
Energy Benefits • Energy efficiency will be improved by 10% • Renewable energy usage will increase by 20%. 6
Slide 49: Air Emissions
Air Emissions • SO2 emissions will be reduced by 35% • CO2 emissions will be halved, from reduced Coal usage • Coal consumption will be reduced by >130 000 t/y 7
Slide 50: Waste Reduction
Waste Reduction • Waste to landfill will be reduced by 50% • Realised through less coal ash to landfill 8
Slide 51: Water Reduction
Water Reduction • Water consumption will be reduced by 5% • Water efficiency increasing by 17% 9
Slide 52: People
People • Skills Centre for Artisan accreditation • Short term employment peak at 2200 people • 40% local • 40% KZN • 15% RSA • Full-time employment 10
Slide 53: Variable Costs
Variable Costs • 6.8% reduction in variable costs • Realised through reduced chemicals and cheaper green energy 11
Slide 54: New Woodyard
New Woodyard To cater for Vulindlela and beyond… 12
Slide 55: New Woodyard
New Woodyard BS | “ss © BR cn sappi
Slide 56: Project Vulindlela - Progress to Date
Project Vulindlela - Progress to Date As at 24/11/2019: • Total Manhours Worked – 1 669 062 • Project Completion - 49.7% • Local training and employment count – 1035 14