Fueling the Next Generation of Employees, Customers and Communities: Sappi’s Mark Gardner Reflects on Strategic Investments

As I look back on the past year, I am gratified to see that the investments we have made in our mills are already paying dividends. These investments have enabled us to expand our product lines and capabilities across all of our businesses—whether through the rebuild of PM 3 at Somerset, the coater at Westbrook, or the series of investments at Cloquet—all while reducing costs and driving productivity. We can now more effectively respond to changing customer needs and have created the platform for building a more diverse, sustainable business.   Our continuing investments in our people have been instrumental to this success, with our focus on safety, training, and job development at the core of everything we do. We believe that no business can win in the marketplace without motivated, engaged and well trained people making it happen every day; on the mill floor or with customers, solving business problems collaboratively and creatively. In this year’s report, we highlight our world class employees and the value they create, for it is our people that will enable Sappi North America to rise to the challenges faced by our industry.   Growth Strategy This past November, we successfully completed the final phase of a natural gas pipeline project at our Somerset Mill. This major capital project has an estimated three year return on investment and helps secure Somerset as a globally competitive mill, able to grow profitably in the most attractive direct mail, publishing and packaging markets for generations to come. Using natural gas instead of fuel oil has the added benefit of reducing our greenhouse gas emissions. We have also maintained the flexibility to use oil as needed if spot prices of natural gas exceed the price of oil which has historically occurred in winter months. Investments such as this are just one example how we manage our business to respond to the industry’s evolving landscape and needs.   In 2014, we refreshed our plans for growth in our coated, release and specialized cellulose businesses and are pleased to see momentum building. We also announced the formation of our new Specialty Packaging business unit. We are excited about the prospects for growth in packaging, and have recently launched LusterCote, a coated one-side paper for labeling and converting applications. Looking ahead, new product development is a cornerstone to growth in all four businesses units.   Our Customers and Products Sappi recognizes that understanding customer needs is paramount to achieving sustained business success. Each year, we endeavor to learn as much as we can about the ever-changing needs of our customers, and then to develop concrete actions to respond. By understanding the needs of our customers we are able to align our business practices, our product offerings and the production of those products to satisfy and meet their needs.   This is no more evident than in our move to chemical cellulose at our Cloquet Mill over the last two years. We approached this change with the mindset that we would make the very best product for our international customer base—a product consistently high in quality each and every time it is produced. As we move forward into 2015, we will continue to enact business practices that will allow us to become a more dependable supplier across each of our business segments, including our coated paper and release product lines.   Safety Performance One constant in our business strategy is our commitment to safety and risk management. In 2014 we continued to have strong performance as measured by lost time and injury severity metrics. Our Lost Time Injury Frequency Rate (LTIFR) was second only to the outstanding record achieved in 2013 and our injury severity rate remains among the lowest in company history. This strong performance is a reflection of our continued vigilance and safety-focused culture. Our commitment to safety excellence and strict standards of risk management has been acknowledged by our peers. We were winners in two categories of the paper industry’s prestigious 2014 Pulp & Paper International (PPI) Awards—Managing Risk and Safety and Mill Manager of the Year. These awards serve as reminders of our dedication to building a safe, sustainable work environment with a strong culture of committed, highly skilled employees. We continue to devote ourselves to maintain our leadership standing in safety performance for the next generation of employees.   Our Employees
As always, the continued investment in our employees remains at the forefront of our business. As thought leaders in the industry, it is imperative that we continue to collaborate with academic institutions in order to help shape the incoming workforce. We provide our employees at all levels with opportunities to actively participate on school committees and engage with local community colleges and trade schools to make sure the training of the world’s future manufacturers and engineers is current and meets the needs of future employers in these fields. Similarly, we are proud to say that we support lifelong learning among our current employees.   Investing in the Next GenerationWe believe that integrating sustainability practices into our business strategy is critical. Improving the environment where we live and work, demonstrating personal commitment to local communities and enhancing profitability to insure our sustained future are the goals we strive for everyday. We know with hard work and determination, we will continue to meet and even exceed the goals we have established for our company. That is the promise we make to our employees, our customers, our investors, our communities and the future generation.   by Mark Gardner
President & CEO
Sappi North America  

Read the full Sappi North America Sustainability Report 2014 by downloading an online PDF version directly from our website here or for more on sustainability, check out our eQ microsite at: http://www.na.sappi.com/eQ/index.html.