Championing a Culture of Optimism at Sappi North America

Each year I look forward to reporting our progress against the five-year goals we set to ensure that Sappi North America continues as a thriving, sustainable, re-investable company. Whether you are an employee, customer, shareholder or a member of one of our mill communities, you should know how we are doing in terms of employee training and safety, key environmental metrics and, of course, financial returns.

We set hard but achievable goals that challenge us as an organization and keep us focused on coming up with projects to improve results and meet or even exceed our goals. These projects can range from waste reduction and energy-efficiency improvement actions at the mills, to new product launches and sales strategies for current revenue growth, to business diversification plans to tap new sources of growth – and, of course, the employee development plans to make it all happen.

That initiative and vision is what sets Sappi North America apart. At Sappi, we listen to our customers and meet their needs by providing them with our high-quality and innovative products. We employ the best talent and provide them with skill-building opportunities. We invest our capital, ensuring our manufacturing processes stay flexible, safe and efficient. We are in control of our destiny because we have an eye to the future and have made a series of decisions to best position the company in the changing landscape.

Safety: Our First Priority
Safety excellence and risk management are an integral part of Sappi’s operating ethos. We have continued to make the necessary investments to ensure that our manufacturing processes are safe with risk well managed. We continue to invest heavily in safety education and training, ensuring that all of our employees, salaried or hourly, operating our assets have the necessary know-how and equipment to work safely. Compliance with safety standards is rigorous and consistently applied. Our results reflect that focus: The Lost Time Injury Frequency Rate (LTIFR) for the year was 0.48, which is a 14 percent improvement versus FY14 and the second best LTIFR year on record. Within the US paper industry, Sappi NA exceeds the benchmark for the top 25 percent performers set with an LTIFR of 0.6. We are proud of this accomplishment and we remain committed to con­tinuous improvement of our safety standards and processes.

Investing in Customer Solutions
Given our strong record of capital investment to keep our machines modern and flexible, as well as our deep commit­ment to R&D, we are able to bring solutions to the market quickly in all four of our businesses. In our Coated Paper division, recent machine upgrades have provided yield improvements resulting in cost savings for customers using our 7 pt Somerset gloss and satin. We also doubled capacity on our Flo lightweight web products and increased the optics of our Flo and Opus sheet brands. In our new Packaging business, we have introduced LusterCote, a quality C1S label product with excellent printability and performance, complementing our legacy LusterPrint business. We are dedicated to making specialized packaging solutions a larger part of our business and are working on innovative line extensions for launch in 2016. The Release team has several important product changes for this upcoming fiscal year in both its Classics and Ultracast lines to meet evolving customer needs in the fashion apparel, furnishings and auto­motive sectors; we expect exciting growth in this business. Finally, our Specialised Cellulose team continues to meet the highest standards for this highly technical pulp feedstock used in textile, pharmaceutical and food industries and is looking for ways to penetrate adjacent markets.

People: Our Greatest Asset
The engagement of our highly skilled workforce is what makes our business environment special. We’re different because our employees are passionate about what they do, and that shows up in how we make, service and sell all of our products. The key to this dynamic is investing in our employees beyond the education and training we provide. We listen to their great ideas for ways to grow and improve this company, we place confidence in their experienced judgment and we give them a chance to take calculated risks and expand their horizons through job progression or the opportunity to take on new projects. And, since we know our employees are our best ambassadors, we encourage volunteering with local and educational organizations to promote goodwill and ensure a steady stream of future world-class talent. This investment of time and resources in our people and the larger community is a full-circle approach to ensure our sustainable future.

A Final Note
I hope you take the time to read this report in depth, as we have streamlined the content this year to make it even more accessible. You will see that in some cases, we are well ahead of aggressive goals, and in some areas, we will need to dig a little deeper and work harder to achieve our five-year vision, and we share those plans with you. The important thing I want to leave you with is the culture of optimism and passion here at Sappi, and the resolve and resiliency we continue to demonstrate as we meet the exciting challenges and demands of our ever-changing markets.

Mark Gardner
President and CEO,
Sappi North America

Learn more about how Sappi is investing in sustainability initiatives in the 2015 Sappi North America Sustainability Report: http://bit.ly/21KNUHW.