PSEE Quarterly meeting 18 September 2014 Presented by Merten Jv Rensburg 1 | [Presentation title] | [Client Name] | 19 September 2014 Have you hugged a tree today ? 2 |EELN Quarterly meeting / Sappi Tech Centre / 18 September 2014 Sappi Group : Our Global Reach • Founded and incorporated in South Africa in 1936, Sappi is today a global company focused on providing dissolving wood pulp, paper pulp and paper base solutions to customers in more than 100 countries. • We are the world’s largest producer of dissolving wood pulp, used primarily in the manufacture of viscose fibre, acetate tow and a wide range of consumer and pharmaceutical products. • Our market leading range of paper products includes coated fine papers, casting release papers, newsprint, uncoated graphic and business papers, premium quality packaging paper and tissue products. 3 | Sappi Southern Africa Sappi Group : At a Glance • Manufacturing operations on three continents • Revenue $5,9 billion • 13,700 employees worldwide • Paper production of 5.88 million tons per annum • Dissolving Wood Pulp production of 1.34 million tons per annum • Paper pulp production of 2.44 million tons per annum Based on 2014 Annual Financial Statements 4 | Sappi Southern Africa Sappi Group : Regions Sappi North America Sappi Europe 23% of group sales 53% of group sales 3 Mills 4 Sales offices 8 Mills 16 Sales offices Sappi Southern Africa 24% of group sales Sappi Paper and Paper Packaging 5 Mills 4 Sales offices Sappi Forests 561,000 ha 1 Sawmill Sappi Specialised Cellulose 1 Mill Based on 2014 Annual Financial Statements 5 | Sappi Southern Africa Sappi Trading Sappi Trading operates a network for the selling and distribution of our products outside our core operating regions of North America, Europe and Southern Africa. Sappi Trading also coordinates our shipping and logistical functions for exports from these regions. Sales offices: Bogotá, Hong Kong, Johannesburg, Mexico City, Nairobi, São Paulo, Singapore, Shanghai, Sydney, Taipei, Vienna, Buenos Aires Logistics offices: Durban, New York Specialised Cellulose • Cellulose is the most abundant natural organic polymer on earth and is found in all plant materials • The plant material (wood from certified forests or plantations) is processed and purified by applying specialised chemistry to extract the cellulose polymers from the wood • The pulp produced that contains these cellulose fibre is called dissolving wood pulp • Sappi is the world’s largest producer of dissolving wood pulp 6 |EELN Quarterly meeting / Sappi Tech Centre / 18 September 2014 Specialised Cellulose • The purified natural wood cellulose fibres are further dissolved by our customers and re-generated or reformed for a host of applications • Diverse range of end use products • Fibres (woven and non-woven textiles) and films • Chemicals and pharmaceuticals • Acetates and plastics • Largest single facility and biggest market share • Good growth rates for most product • Textiles “cellulose gap” 7 EELN Quarterly meeting / STC / 18 September 2014 Sappi Southern Africa Proprietary Limited 8 EELN Quarterly meeting / STC / 18 September 2014 Sappi Southern Africa • 500,000ha of forests in Southern Africa Ngodwana KLB and NP chemical cellulose Enstra Uncoated fine paper Lomati Saw Mill Plantations in Mpumalanga, KwaZulu-Natal Tugela KLB, NSCC pulp Cape Kraft Mill Stanger KLB Coated fine paper , Tissue and pulp Saiccor chemical cellulose (dissolving pulp) 9 EELN Quarterly meeting / STC / 18 September 2014 Sappi Southern Africa : Sales by Product Group Based on BP 2014 Sales Revenue 10 EELN Quarterly meeting / STC / 18 September 2014 Sappi Forests • Own and manage 500 000 ha of plantations in Southern Africa • 383 000 ha owned in South Africa • 96 000 ha supply agreements with small farmers • 50% hardwoods, 50% softwoods • Supply 5 million tons pulpwood annually (more than 70% self sufficient) • FSC certified 11 | Sappi Southern Africa Sappi SA Specialised Cellulose Ngodwana Conversion in 2013 210,000 tons dissolving wood pulp from 2014 Saiccor 800,000 tons Dissolving wood pulp 12 | Sappi Southern Africa Sappi Paper & Paper Packaging • Sappi PPP has a strong market positioning with approx 42% of the local uncoated and 28% of the coated fine paper demand. Ngodwana Enstra 195kton paper pulp 230kton kraft paper 140kton newsprint 200kton uncoated fine paper • Tugela Sappi PPP also supplies approx 40% of SA’s packaging paper requirements and has a strong market position in local newsprint supply (36%) 210kton kraft paper 130kton paper pulp Stanger Cape Kraft 60kton kraft paper 13 | Sappi Southern Africa 110kton coated paper & tissue 60kton pulp Energy Management 14 EELN Quarterly meeting / STC / 18 September 2014 Sappi Energy management – Why? • Managed as part of our Sustainability program that focus on : – Planet – People – Profit • Energy impacts Planet and Profit • Focus on reducing the cost of energy by: – Reducing price – Reducing consumption – Selling power 15 EELN Quarterly meeting / STC / 18 September 2014 Variable cost per ton 16 EELN Quarterly meeting / STC / 18 September 2014 17 EELN Quarterly meeting / STC / 18 September 2014 18 EELN Quarterly meeting / STC / 18 September 2014 19 EELN Quarterly meeting / STC / 18 September 2014 Measurement & Validation 20 EELN Quarterly meeting / STC / 18 September 2014 SA Energy Projects: Current Status – Regional Performance “Liquor power” Closure of pulp mills GoCell Aluminium SPE = 10-15GJ/t before being melted down? 21 EELN Quarterly meeting / STC / 18 September 2014 SA Energy Projects: Current Status – Regional Performance (continued) Generation Closure of pulp mills 22 EELN Quarterly meeting / STC / 18 September 2014 SA Energy Projects: Current Status – Regional Performance (continued) 17.7% improvement Improved liquor burning 23 EELN Quarterly meeting / STC / 18 September 2014 SA Energy Projects: Current Status – Regional Performance (continued) 15.9% improvement Deteriorating coal quality 24 EELN Quarterly meeting / STC / 18 September 2014 Mill specific - Saiccor 25 EELN Quarterly meeting / STC / 18 September 2014 Mill specific - Ngodwana 26 EELN Quarterly meeting / STC / 18 September 2014 Example of information collected ENERGY USE (Compiled by Henry Coppens: [email protected]) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Note GJ/t (= MJ/kg = kJ/kg/1000) All specific energies (GJ/t) based on tonnes saleable product and pulp sold (Cells B52….G52 of Sheet General Info 2001 - 5) FUELS THE DENOMINATOR (Air dry tonnes saleable product) Methanol and other fuels (are they a part of HCLV? ) 492 189 488 070 479 418 491 389 505 676 505 751 463 385 484 110 484 085 397 674 407 901 PURCHASED FUELS • Ngodwana Master.xlsm 1a. Purchased Biomass - e.g. pelletised biomass Calorific Value of biomass (GJ/t) - (dry) Hog fuel burned (t/a) Cost of Pell. wood ($, £, R, Eu/t) Hog fuel CV based energy (GJ/a) CO2/GJ hog fuel (t/GJ) CO2 emission (t/a) 0.00 0 0 0 0.080 0 0 0.00 0 0 0 0.000 0 0.00 0 0 0 0.000 0 0.00 0 0.00 0 0.000 0 0.00 0 0 0 0.000 0 0.00 0 0 0 0.000 0 2006 0 0 0 0 0 0 1b. Purchased Biomass - e.g. other Calorific Value (GJ/t) - (dry) Biomass burned (t/a) Cost of Pell. wood ($, £, R, Eu/t) Biomass CV based energy (GJ/a) CO2/GJ biomass (t/GJ) CO2 emission (t/a) 11.00 0 0 0 0.080 0 0.00 0 0 0 0.000 0 0.00 0 0 0 0.000 0 0.00 0 0.00 0 0.000 0 0.00 0 0 0 0.000 0 0.00 0 0 0 0.000 0 2a. Oil for Combustion (low sulphur) or No 6 Fuel Oil Calorific Value (GJ/t) - (dry) Oil burned (t/a) Cost ($, R Euro/t) CV based energy (GJ/a) CO2/GJ biomass (t/GJ) CO2 emission (t/a) SO2 Emission (kg/a) 42.50 0 0 0 0.074 0 0 42.50 0 0 0 0.074 0 0 42.50 0 0 0 0.074 0 0 42.50 0 0.00 0 0.074 0 0 42.50 0 0 0 0.074 0 0 2b. Oil for combustion (high sulphur) or No 2 Fuel Oil Calorific Value (GJ/t) - (dry) Oil burned (t/a) Cost ($, R Euro/t) CV based energy (GJ/a) CO2/GJ biomass (t/GJ) CO2 emission (t/a) SO2 Emission (kg/a) 42.10 8096 1522 340 842 0.074 25 222 161 920 42.10 6860 1544 288 806 0.074 21 372 137 200 42.10 10120 1598 426 052 0.074 31 528 202 400 42.10 9364 1680 394 224 0.074 29 173 187 280 0.00 0 0 0 0.000 0 0 0.00 0 0 0 0.000 0 0 0.00 0 0 0 0.000 0 0 0.00 0 0 0 0.000 0 0 2c. Reprocessed waste oil OilCalorific Value (GJ/t) Total Oil (t/a) Cost of HFO (R/t) Oil CV based energy (GJ/a) CO2/GJ Oil (t/GJ) CO2 emission (t/a) SO2 Emission (kg/a) 2000 2001 2002 Opportunities for improvement • Simplify system • Automate system Audit of data on a group wide basis at year end 27 EELN Quarterly meeting / STC / 18 September 2014 2003 2004 2005 2007 2008 2009 2010 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0 0 0 0.000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0 0 0 0 0 0 0.00 0 0 0 0 42.10 8887 1896 374 143 0.074 27 687 177 740 42.10 18267 1936 769 039 0.074 56 909 365 339 42.1 35580 2448 1 497 936 0.074 110 847 711 609 42.2 13613 2 741 574 469 0.074 42 511 272 260 42 13963 3 708 586 446 0.074 43 397 279 260 42.2 19 970 3 464 842 718 0.074 62 361 399 392 42.1 12 922 3 472 544 010 0.074 40 257 258 437 0.00 0 0 0 0.000 0 0 0.00 0 0 0 0.000 0 0 0 0 0 0 0.000 0 0 0 0 0 0 0.000 0 0 0 0 0 0 0.000 0 0 0 0 0 0 0.000 0 0 0 0 0 0 0.000 0 0 Way Forward: SA Energy Key issues Current Key Initiatives and Projects • Saiccor Black Liquor recovery – R63m pa savings. • Bark burning at Ngodwana Mill – R10m pa. • Project GoCell energy optimisation (12i and DSM). • Onsite and Forest biomass Power Generation Projects. • Continued Power Sales to Eskom and other 3rd Parties. • Sappi Forests energy projects: Biogas/PV. 29 | Sappi SA| Energy Feedback| 21 August 2014 Be careful out there
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