View
222
Download
3
Category
Preview:
Citation preview
Mpact Investor and Analyst Site Visit
25 May 2016
Welcome - Bruce Strong
Mpact Plastics Wadeville - Neelin Naidoo
Mpact Polymers - John Hunt
Mpact Plastics Wadeville Site Visit
Neelin Naidoo 25 May 2016
4
Mpact plastics overview
Styrene and PET trays, fast food containers
and clear plastic films
FMCG bottles, jars and tubs with in mould labelling
Jumbo bins, pallets, wheelie bins and crates.
PET preforms, bottles, jars, and closures
Key product categories
PET preforms, bottles, jars and closures
Jumbo bins, pallets, wheelie bins and crates
Bottles, jars and tubs with in mould labelling
capability
Styrene and PET trays, fast food containers and
clear plastic films
rPET pellets
Key customers
FMCG companies (carbonated soft drinks,
personal care, pharmaceuticals, food producers)
Quick service restaurants
Agricultural producers
Retail chains
Leader in the manufacture of PET preforms,
styrene trays, plastic jumbo bins and wheelie
bins rPET pellets
5
1 778 2 124
2 344 2 533
External revenue
Underlying operating profit
823 969 1 070 1 148
955 1 155
1 274 1 385
0
500
1 000
1 500
2 000
2 500
3 000
2012 2013 2014 2015
R m
illio
n
HY1 HY2
37 34 44
87
80 72
88
112 6.6%
5.0%
5.6%
7.9%
0
50
100
150
200
250
2012 2013 2014 2015
R m
illio
n
HY1 HY2 margin
Revenue up 8.1% to R2.5bn
Selling price and product mix
lower by 4.0%
Volume growth of 12.1%
Underlying operating profit up 50.8%
to R199m
Margin up to 7.9% from 5.6%
Favourable product mix
Lower raw material prices
Benefit of FMCG restructure
27% 20%
117 106
132
199
Plastics business (31 December 2015)
Revenue Operating profit
Harare
Atlantis Paarl
Brits
Pinetown
Wadeville
1,419 EMPLOYEES
10 SITES
FMCG
BINS AND CRATES
PET PREFORMS, BOTTLES, JARS, AND CLOSURES
rPET
TRAYS & FILMS
7
Staff numbers
242 employees
2015 Production
1.4 billion units
Raw materials
PET – Virgin and Recycled
Certifications/Accreditations
ISO 9001: 2008
FSSC 22 000: 2013
Product range
Carbonated soft drink preforms and bottles
Hot fill preforms and bottles
Water bottles
Edible oil bottles
Wide mouth food jars
Personal care bottles
Mpact Wadeville Overview – PET
preforms, bottles and jars
Major competitors
Polyoak, Bowler Metcalf
Nampak, Fontana
Boxmore, QPET
Production equipment
Husky injection moulding machines
Sidel and Sipa stretch blow moulders
Nissei injection stretch blow moulders Key contracts
ABI, Pioneer, Kingsley
8 PAGE 8
Mpact Wadeville: key milestones in
the South African market
First to market with PET Wide Mouth Jars
First to market with Hot Fill preforms and bottles
First to market with 144 cavitation preforms
First to market with 1881 light-weight neck design for carbonated
soft drinks
First to market in Africa for rPET in The Coca-Cola Company
brands
9
What is PET?
Polyethylene terephthalate (PET)
Derived from crude oil
Uses
Fibre (Polyester)
Packaging
Key properties in packaging
Gas barrier
Strength
Clarity
Lightweight
Key suppliers
Hosaf
Mpact Polymers
10
PET market in South Africa
Total consumption was approximately 210,000 tonnes in 2015*
Bottles account for approximately 68%*
Historic annual growth has been between 6-8% from 2004*
Future growth is estimated at 8% per annum*
Total consumption is sourced locally from Hosaf and rPET producers,
supplemented by imports
Import parity pricing based on global indices
*Source: PETCO
11 Source: CYPET Technologies, Delta T Systems, Metal Casting Suppliers
Stretch blow moulding process Injection moulding process
Mould Barrel Screw Heater
PET pellets
PET bottle manufacturing process
12 PAGE 12
In Summary
Invested in state-of-the-art technology
Economies of scale
Capabilities benchmarked globally
Expertise in processing of PET (including recycled PET)
High growth market where opportunities exist to substitute other
packaging substrates
Competitively positioned
Mpact Polymers Site Visit
John Hunt 25 May 2016
14
Why bottle-to-bottle rPET (Savuka PET)?
Approximately 68% (140,000 tonnes) of PET usage in SA is for beverages*
Projected 8% growth rate in PET use*
Recycling rate of PET beverage packaging in 2015 was 52%*
To date rPET has been primarily used for polyester fibre production
Further improvement in recycling rates requires bottle-to-bottle recycling
Technology has progressed to produce rPET of suitable quality for beverage
packaging
Producer responsibility for recycling (helping to reduce bottlers’ carbon
footprint)
*Source: PETCO
15
PET market growth
Source: PETCO
-
50 000
100 000
150 000
200 000
250 000
300 000
350 000
To
nn
es
PET Recycled PET used in bottles Total PET consumption
16
Mpact Plastics integration
17
Project Rationale
Exceeds Mpact’s minimum investment criteria over the period
Leverage Mpact’s recycling network and converting capabilities
Improved environmental performance for Mpact, its customers and the
community
Job creation in the recycling industry
Qualifies for S12i tax incentive
18
Other project benefits
Environmental benefits
29,000 tonnes of used bottles will be diverted from landfill
Estimated saving of 186,000 cubic metres of landfill space
CO2 emissions reduction of approximately 53,000 tonnes per annum
Production of rPET requires less energy than the process of creating virgin PET
Low energy and water consumption
Socio-economic benefits
Approximately 1,000 indirect jobs will be created through the collection of bottles
85 direct jobs created
Benefits Coca-Cola Southern Africa and its bottling partners (ABI & others) and other
users of PET; as they are increasingly interested in recycling the materials they use to
package their products
Greenfield investments in manufacturing capability in South Africa
Innovation
Public-private partnerships
19
Staff numbers
85 employees
Capacity
29 000 tonnes of bottles processed per
annum
21 000 tonnes rPET produced per annum
Raw materials
Used PET bottles
Financial information
Capex cost: R350 million
Shareholding: Mpact: 79%, IDC: 21%
Products
rPET (Savuka PET) and other recyclable
polymers
About Mpact Polymers
Major Customers
ABI
Mpact Plastics
Facility
Krones Metapure Technology
Size: 20,000m2 (9,000 m2 under cover)
Competitor
Extrupet
The project is a result of close collaboration over several years between
Mpact, The Coca-Cola Company, ABI, SABMiller, IDC, DTI, PETCO,
Krones and the City of Ekurhuleni
Certifications and approvals
The Coca-Cola Company
EU Food and Safety Authority (recycling
process)
20
Considerations for technology selection
Coca-Cola approved technology (four approved equipment suppliers)
Final product characteristics
Capital cost and operating cost per kg
Economies of scale
Proven technology supplier capability
Key learnings from international benchmarking
Mpact visited numerous rPET facilities, recyclers and convertors in 8 countries
(Germany, France, Austria, Bangladesh, Mexico, Italy, USA and Peru)
Require secure raw material supply
Require convertor and brand owner commitment
Krones Metapure technology is proven
rPET Technology review
21
Technology - Krones Metapure
Krones is a major filling line supplier to SABMiller and The Coca-Cola
Company globally – revenue in 2015: EUR 3.2 billion
Krones Metapure technology has:
Integrated design and technology developed for rPET
Bottle washing plant experience: low water and chemicals consumption
combined with wash quality
Energy efficiency kWhr/kg of rPET
Limited thermal processing – improved polymer characteristics
22
Progress to date
Commissioned on time and within budget
Proven capability in meeting exacting specifications
Well entrenched quality control protocols
The Coca-Cola Company approval in place
Market acceptance of Savuka PET– 10% rPET in 500ml bottles in Gauteng
Successful unveiling on 10 May, with strong support from Government, IDC,
ABI, TCCC, SABMiller, and others
Healthy raw material supply – Mpact Recycling, Remade
Ongoing Krones support
23
Market approvals
The Coca-Cola Company (TCCC) approvals
Technology – Krones Metapure technology (prior to order)
Chemical analysis of rPET product (November 2015)
Sensory evaluation of Coke in an rPET containing bottle - 10 weeks
(November 2015)
Facilities audit – includes mandatory testing equipment (February 2016)
Supplier Guiding Principles (February 2016)
Savuka PET has been approved in the packaging of TCCC products at 25%
Product converting and bottling trials
Physical trials of product run at the converter or the bottlers premises
Runability, final product quality
Completed for 500ml Coke bottle (March 2016), 2L Coke bottle trial
underway
Completed at other key food packaging customers
24
Key challenges to date
Plant availability
Power interruptions and allocation (partly resolved)
Staff confidence and training (in progress)
Intermittent stoppages (being resolved)
Maintenance higher than planned
Quality
Colour (resolved)
Throughput
Equipment bottlenecks (resolution in progress)
Yield - process stability, purge rates (improving)
Raw material feedstock quality (in progress)
Profitability
25
Current focus
Incoming raw material standards
Plant availability
Root cause analysis
Additional training
Service and maintenance protocols
Throughput optimisation
Yield
De-bottlenecking
Further convertor and bottler approvals
Profitability
26
Mpact Polymers official opening
Recommended