Leadership messages – Chief Executive Officer
The past year was extremely challenging in light of slowing global growth and market volatility, driven by issues like escalating trade wars and Brexit.
Against this uncertain macro-economic backdrop, in terms of Prosperity, we failed to match our 2018 performance. On the positive side, when measured against our 2014 baseline, return on capital employed (ROCE) showed a slight improvement.
There were also some notable achievements: We completed the upgrade to PM8 at Lanaken Mill and made progress with our expansion project at Saiccor Mill which was 40% complete at year-end. The former will allow us to more closely match our coated woodfree and coated mechanical supply with demand, while the latter will enable us to supply additional volumes to our dissolving wood pulp customers. Our acquisition of the Matane high-yield pulp mill in Canada is an important step in ensuring the security and lower cost of woodfibre supply to our growing packaging and speciality papers business.
Our Biotech division continues to make strides, with phase 2 of our sugar demonstration plant under construction and work ongoing to develop markets for our biocomposites, biomaterials and Valida (nanocellulose) products.
However, the area in which the board and I are most concerned is safety. Tragically, there were four fatalities in Sappi Southern Africa (SSA) and while Sappi North America achieved their best ever injury rate, lost-time trends deteriorated in Sappi Europe and SSA.
We do not accept that injuries and accidents are inevitable. We remain committed to Project Zero based on all people at all times making safe choices underpinned by risk assessments, group sharing of all incidents and root cause investigations, enforcement of compliance and leadership engagement.
Our safety programmes in each region are aimed at creating an environment where no one will suffer permanent disability or loss of life. Every disability and each life lost are unacceptable. Our drive for zero harm remains unwavering and we will do everything in our power to ensure all our employees return home safely every day.
We spent approximately US$525 per employee on training and skills development to ensure that our people are well equipped to meet the needs of a rapidly changing world. I was extremely encouraged by the fact that 90% of our people participated in the 2019 employee engagement survey, an increase of 17 percentage points from our our 2014 baseline. Our people spoke and we listened: We have compiled plans to address their issues and concerns the group as a whole and for each region specifically.
In the interests of promoting more transparent supply chains, we rolled out our Supplier Code of Conduct across the group and initiated a supplier assessment process. We also established a working group focused on identifying priority Sustainable Development Goals (SDGs) for Sappi and establishing specific actions to embed these more closely into our business. In addition, work on adopting the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) is ongoing.
I thank all our stakeholders for their trust in our ability to deliver on our 2020Vision and strategy, in particular our people, who have worked tirelessly and with passion to ensure that we continue treading more lightly on the Planet, improving the lives of People and promoting Prosperity for all stakeholders.
Chief Executive Officer