Pulp and paper producer Sappi on Tuesday celebrated its eightieth year as a JSE-listed company, as well as the fact that it was, once again, part of the bourse’s Top 40 Index, which includes the 40 largest companies by market capitalisation included in the FTSE/JSE All Shares Index.
Sappi has regained its spot in the Top 40 Index after falling off in 2009, when it grappled with losses caused by the economic crisis in Europe.
Speaking at the celebration and during the first market opening for the year, JSE capital markets director Donna Nemer noted that being included in the Top 40 Index would bring about significant benefits for Sappi.
“Firstly, it puts you in a peer group of the most prominent companies; secondly, it provides an enormous boost to liquidity, as it opens it up to a new set of potential investors; and, thirdly, it eases capital raising, as the prominence of the company is so much higher,” she said.
Sappi CEO Steve Binnie noted that the company was now “in a very different place to where we were in 2009. It really has been a remarkable turnaround”.
He attributed the company’s strength to the tenacity and positivity of its staff. “I have no regrets coming on board in 2012,” he stated.
Looking back, Binnie noted that the company had to stay ahead of innovation, as the advent of the digital age had caught paper-producing company unawares. “We were world leaders in a product that was going into decline, along with a heavily indebted balance sheet,” he said.
The company is currently focusing on reducing its dependency on the graphic paper business and looking at other areas for growth, including biorenewable chemicals and packaging. “We can no longer be seen as just a paper business,” he said.
Meanwhile, Nemer said Sappi’s milestone of 80 years as a JSE-listed company was no mean feat, pointing out that the average life span of companies listed on the S&P 500, from research done in the US market, has fallen by more than 50 years, from an average of 67 years to 15 years.
She attributed the long life span to three things, including customer focus, the willingness to chart new territory and forming close relationships with the communities in which the company operates.
Nemer further lauded Sappi for being one of the biggest producers of viscose, which is used in textiles. “I like to think of it as renewable clothing,” Nemer quipped, adding that Sappi being a South African company was also worth celebrating.