Sappi project grow trialogue 23 may 2012

| [Sappi] | Project Grow for Trialogue Conference | [23 May 2012] 1

Sappi Project Grow for

Trialogue conference 23 May

2012

André Oberholzer

When money does grow on trees


Sappi Southern Africa

• #1 in Chemical Cellulose with 14% capacity share

• Wide range of paper, tissue and packaging

• 567,000ha of forests in Southern Africa

• Total paper capacity of 1.08m tons

• Total pulp capacity of 2.02m tons

• 2011 Sales US$1,801m

Enstra

Office paper;

Security paper

Stanger Mill

Coated printing papers

Tissue

Ngodwana

Newsprint;

Packaging papers;

(Chemical Cellulose)

Tugela

Packaging papers

Saiccor

Chemical cellulose

Cape Town

Packaging papers


Diverse end-uses


Theme: A healthy environment supports

prosperous communities

Long-term success of CSI initiatives due to:

•Collaboration and Partnerships

–Creation of contractor businesses and jobs

–Benefits of working within Sappi rules

• Communication

– In 1983 we had to establish trust

–Show Government rural development model that works

• Strategic Alignment

–Provide fibre to Sappi

–Build positive relations with neighbours and communities

•On-going learning

–Almost 30 years of practical experience

–What works and what does not work


Project Grow

• Tree farming – subsistence farmers

• 1983 – 3 growers and 8 hectares

• Today 2,500 growers and 15,000 hectares

• Free seedlings and technical advice

• Guaranteed market price at harvesting (10 years)

• loans (R33 million)

• Annual pre-payments on crops

• Over 10,000 farmers participated over 30 years

• Sappi investment – R305 million

• Benefit to Sappi? 130,000 tons per year (2% of requirement)

• Value to growers? Over R50 million per year

• Value of future harvests? Over R300 million standing

• Payments to farmers? Over R220 million


Community benefits

• Financials from harvest:

• Loan repayment

makes up 11% of

income

• Harvesting costs

make up 21% (to

local business)

• Transport makes up

26% (to local

business)

• Profit to farmer/

community makes

up 42%

• Over 100 SMMEs

created

• Over 1,100 jobs created

• 80% of farmers are

women


Community benefits

• Fencing and building materials

• Firewood

• Other produce

• Transfer of skills

• Entrepreneurial opportunities

• Education (children and adults)

• School and University

• Permanent housing

• One grower built the community

church!

• Integrated development services

• Sappi extension officers help

communities or individuals select

land – environmental issues and

economic issues (soil type)


Benefits

• Adherence to environmental

regulations:

• Illegal logging

• Wetlands

• Plantation management

• Weeding

• Adherence to safety during

harvesting and transporting

• Fire management

• Farmers and communities are able

to enter the formal economy

• Community forestry in

impoverished Eastern Cape

• Sappi assisting to establish 30,000

hectares

• Creation of approx. 1,500 direct

jobs and 4,500 indirect jobs


Forestry

• Some 45 million seedlings cultivated in 4 nurseries annually

• Sappi plants some 36 million trees each year

• Sappi harvests some 35 million trees each year

• Approx. 290 million trees growing at any time

• Produces 8 million tons of oxygen

• Absorbs 13 million tons of CO2

• Biomass allows us to generate 38% renewable energy

• Forestry in SA contributes R10 billion to GDP (net of impact)

• Forestry uses 3% of water (rain)

• 460 (more than half of all bird species in SA) recorded on Sappi plantations

• 52 Red Data species found on Sappi property


Thank You

www.sappi.com

Business

Sappi project grow trialogue 23 may 2012