The Changing Face of the Corporation

The face of today’s corporation is very different to what it was even a short twenty
years ago. In this time, rapidly-evolving technology has brought about an industrial
and social revolution unprecedented in scope, demanding a change in both public
and business institutions at the most fundamental level.

With the challenges presented by this, corporations around the world have had to re-
look their roles, structures and methods. Companies and groups of companies, if
they are to be successful and sustainable, can no longer regard themselves simply
as economic entities. They also have to acknowledge their social and environmental
roles, and be accountable in all of these areas.

Sappi, the world’s leading producer of coated fine paper and chemical cellulose
(dissolving pulp), has long been committed to playing an integrated role in this
changing socio-economic environment, to re-defining what it means to be a
corporation.

The group’s strategy is founded on three equally important areas of focus: business
success, environmental sustainability, and social responsibility. And, like a three-
legged stool, the whole cannot stand unless all of the legs are equally healthy and
strong.

From a business perspective, Sappi is a South African success story. Established in

1936, the group had, by 1998, become one of the world’s foremost pulp and paper
producers. Today it has operating units on three continents and sales offices across
the world, servicing clients in over 100 countries. Its paper, pulp and packaging
products are at the forefront of innovation, with solutions being developed in
conjunction with clients to meet ever-growing and ever-changing needs for both
specialist and commodity papers.

Sappi is, however, committed to managing this success in a sustainable manner, to

“meeting the needs of this generation without compromising the ability of future
generations to meet their own needs”. In light of this, the group recognises its
obligation to exercise good corporate governance, to ensure the responsible
stewardship of the natural environment, and to contribute to the stability and well-
being of the communities from which it draws its labour force.

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With regard to environmental stewardship, all Sappi tree plantations, which account
for 540 000 hectares under cultivation, are managed in strict accordance with the
standards set by the international Forestry Stewardship Council (FSC), and comply
with ISO 14001 specifications. An independently-audited chain-of-custody process
also ensures that the group can trace the origin of every shipment of timber right
back to its source, and that it uses only cultivated and sustainable wood fibre in its
production processes.

At product level, environmental issues and sustainability are as important as at

cultivation level, and Sappi is constantly researching ways in which it can reduce the
environmental impact of paper and papermaking at all levels. It does this at its state-
of-the-art research and development facility, situated at the Innovation Hub in the
Tshwane metropole.

Recent product innovations developed there include Sappi Fine Paper’s Triple Green
range and Sappi Kraft’s Barricoat range, both of which represent cutting-edge
solutions to contemporary challenges.

Reflecting Sappi’s three-fold strategic focus, Triple Green is a unique world-first

paper that is produced according to three pillars of sustainability. These define an
integrated procurement and production process that makes all Triple Green variants
the most environmentally-sound pulp and paper products currently being produced
anywhere in the world.

In the first instance, 60% of the fibre used in Triple Green production is derived from
sugar cane, a locally-sourced by-product of the sugar industry. Secondly, all wood
fibre is obtained from sustainable and internationally-certified afforestation, using
independently-audited chains of custody for incoming timber. And finally, the
bleaching process used in the production of Triple Green products is elemental
chlorine-free, ensuring that effluent is essentially benign to the environment.

In the packaging sector, another Sappi innovation is drawing great interest from food
manufacturers, retailers and exporters. The Resilio range, which was launched in
early 2007, brings to food packaging a unique paper-based solution that also offers
the same barrier protection as other less environmentally-sound packaging materials.
Moisture-resistant, grease-resistant and scuff-resistant, Resilio papers and boards

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are produced in an environmentally-sustainable way, are fully recyclable and
repulpable, and are food-contact approved. Just as Triple Green is revolutionising the
fine paper market, so Resilio is set to revolutionise food packaging.

Of course, Sappi’s commitment to environmental management and sustainability

extends well beyond business-related growing and production. For example, the
group funds and manages eighteen biodiversity conservation areas situated on Sappi
land, and supports a wide range of independently-run conservation and preservation
projects.

Sappi has, for example, been a supporter of the Worldwide Fund for Nature (WWF)
since 1971, and has been recognised as a Friend of the Earth by this esteemed
organisation. The two have also recently established the ground-breaking
Sappi/WWF TreeRoutes Partnership, and are working together to develop unique
eco-tourism destinations in conjunction with local communities in Kwa-Zulu Natal. In
addition, amongst others, Sappi actively supports the South African Biodiversity
Institute (SANBI), and directly funds a number of Endangered Wildlife Fund (EWT)
conservation projects such as The Blue Swallow Working Group.

On a social and empowerment level, Sappi is equally as active. In this regard, it

focuses on the economic and social empowerment of the communities situated close
to its operating units, and on fostering scientific and technological education. A
founding partner of the Programme for Technological Education (PROTEC), it is still
its key sponsor, as it is of the Penreach educational outreach programme. Also a
founding partner of this initiative, Sappi has since been involved in developing it into
what is today the largest schools-based outreach programme in Africa.

It is in these and many other ways that Sappi is engaging the challenges of the
contemporary world, and developing a corporation that is proud to have an ever-
evolving and developing face.

For further information on Sappi and Sappi products, visit www.sappi.com.

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Word Count (excluding heading): 960

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