Slide 1: Investor Site Visit - 07/08 October 2008
Investor Site Visit - 07/08 October 2008 Bob Hunt Forest Operations Manager
Slide 2: Presentation Overview
PRESENTATION OVERVIEW Plantations versus natural forests South African forest industry Mondi’s South African Forest Operations KwaMbonambi Nursery21 Page 2
Slide 3: Plantation versus Natural Forests
PLANTATION VERSUS NATURAL FORESTS Plantation (‘fast wood’ forestry) South Africa, 75,000 Exotic plantations Intensive (capital and management) Short rotations, high yields Southern Sweden, 800,000 Natural (‘old growth’ forestry) Indigenous forests British Columbia, Minimal (capital and 1,600,000 man
Slide 4: FSC and Sustainable Forestry
FSC AND SUSTAINABLE FORESTRY Forests Stewardship Council (FSC) is the gold standard in sustainable forestry practices certification Based on the triple bottom line approach to sustainability Economic Social Environmental Mondi was the 13th company world wide to be certified and the 2nd in South Afri
Slide 5: Example of Environmental Initiative
EXAMPLE OF ENVIRONMENTAL INITIATIVE Mondi Wetlands Programme Mondi, along with the Wildlife Environment Society of South Africa, WWF and Mazda Wildlife Fund support the Mondi Wetlands Programme Wetland rehabilitation Wise use and sustainable use of wetlands Siya Qhubeka – delineation of “eco-boundar
Slide 6: Presentation Overview
PRESENTATION OVERVIEW Plantations versus natural forests South African forest industry Mondi’s South African Forest Operations KwaMbonambi Nursery Page 6
Slide 7: Afforestation
AFFORESTATION AREAS o 1.3 million ha o 1.1 % of area o 721,000 ha pine o 496,000 ha gum o 108,000 ha wattle Richards Bay . ANNUAL HARVEST • Durban o 22 million m3 o 19.5 million tonnes o 5.4 million m3 sawlogs o 11.7 million t pulpwood o 650,000 t mining timber o 500,000 m3 poles Page 7
Slide 8: Fires
FIRES 2007 was worst fire season in recorded history in South Africa but Mondi only lost 13,000 hectares Industry based approach to fire fighting in partnership with government (working on fire) State of the art centrally controlled digital camera fire detection systems developed in South Africa Con
Slide 9: Presentation Overview
PRESENTATION OVERVIEW Plantations versus natural forests South African forest industry Mondi’s South African Forest Operations KwaMbonambi Nursery Page 9
Slide 10: Forestry Area and Outputs - 2008
FORESTRY AREA AND OUTPUTS - 2008 Title Deed 000 (Ha) Plantable Area 000(Ha) Open Area 000(Ha) MSA 299 197 102 SiyaQhubeka 27 21 6 MSN 48 26 22 Total 374 244 130 Annual Harvested Tonnes: (millions) MSA Eucalyptus Pine Wattle Total Own (OLM) 2,48 0,42 0,24 3,14 Procured 0,95 0,20 0,01 1,16 Total 3,43
Slide 11: Conceptual Model
CONCEPTUAL MODEL C 10% B 1 2 3 4 5 6 7 8 D 25% 30% 35% A Page 11
Slide 12: Cost Competitiveness
COST COMPETITIVENESS Average hardwood and soft wood costs (€/m3, Q2 2007)1 47 42 39 37 33 30 30 25 25 26 South Brazil Russia Chile Australia Poland Portugal Sweden Finland France Africa (1) Source: Pöyry Forest Industry Consulting. (2) Excluding Hungary Page 12
Slide 13: RSA Eucalyptus Demand and Supply
RSA EUCALYPTUS DEMAND AND SUPPLY PESTS OVER WATER LAND & FELLING 12 USE CLAIMS 11 DISEASE 10 Tonnes (millions) 9 8 7 6 5 4 3 2 MORE MORE 1 - LAND YIELD 2001 2002 2003 2004 2005 2006 2007 Pulp mills Chip mills Board mills Mining Timber Page 13
Slide 14: More Yield and Lower Cost
MORE YIELD AND LOWER COST Volume yield * Pulp yield * wood density = Kg pulp.ha-1.yr-1 Time Best Operating Procedures; More yield off SILVI- VALUE the same land -CULTURE Tree Breeding TREES & Genetics Land LAND Management Page 14
Slide 15: Higher Fibre Production off a Unit of Land
HIGHER FIBRE PRODUCTION OFF A UNIT OF LAND RA ity 3 W M ST1, CO ns A TE 3 de ic RIA as *B L ld 2 yie ulp e Tim PUL T2 *P COS d1 PIN iel ey G lum Vo Page 15
Slide 16: Focus Areas
FOCUS AREAS Tree Improvement Biotechnology Nurseries Silviculture Conservation 55 50 45 40 35 30 25 20 15 10 5 0 0 1 2 3 4 5 6 7 8 9 10 Technology Harvesting Transport Wood quality Planning Biometrics Transfer Technology Transfer Training & Edu Feeding Scheme BCEA; Wages Health Care Living Standards
Slide 17: Safety – Lost Time Injuries (2000-2008)
SAFETY – LOST TIME INJURIES (2000-2008) Major Focus Area 350 286 300 250 203 200 134 150 103 100 46 50 10 13 13 5 0 ) 00 01 02 03 04 05 06 07 ug 20 20 20 20 20 20 20 20 A D (YT 08 20 The target for 2009 is zero LTIs Page 17
Slide 18: Presentation Overview
PRESENTATION OVERVIEW Plantations versus natural forests South African forest industry Mondi’s South African Forest Operations KwaMbonambi Nursery Page 18
Slide 19: KwaMbonambi Nursery – Key Statistics
KWAMBONAMBI NURSERY – KEY STATISTICS Latitude: 280 35’ 51” Longitude: 320 10’ 53” Altitude: 40 m above sea level Mean Annual Precipitation: 1200 mm Propagation method: Cuttings Production Type: Sub tropical clones Hybrids: E. grandis x E. urophylla E. grandis x E. camaldulensis Capacity: 10 million
Slide 20: KwaMbonambi Nursery – Process
KWAMBONAMBI NURSERY – PROCESS Parent material of a particular clone is established in hedges or clone banks These plants become the source of all cuttings Cuttings taken from the same clone have an identical genetic base and will exhibit the same traits of disease resistance, stem straightness and g
Slide 21: Forward-Looking Statements
FORWARD - LOOKING STATEMENTS It should be noted that certain statements herein which are not historical facts, including, without limitation those regarding expectations of market growth and developments; expectations of growth and profitability; and statements preceded by “believes”, “expects”, “an
Slide 22: © mondi
© mondi