Polymers

Polymers

We focus on producing high-quality polymers for use in a variety of different sectors, including the infrastructure, telecommunications, agriculture, packaging, manufacturing, and medical sectors. Polymers are used in a broad range of applications, including for piping, multipurpose containers, fibres, films, non-woven fabrics, packaging, and bottling.

Safripol is the only local producer of polyethylene terephthalate (‘PET’) and high-density polyethylene (‘HDPE’), and one of two producers of polypropylene (‘PP’) in South Africa.

Our vision is to create plastics that shape our world in a responsible way. As the global demand for plastics is 350 million tonnes per year, we believe that promoting responsible usage is both a financial and fiduciary responsibility.

We focus on producing high-quality polymers for use in a variety of different sectors, including the infrastructure, telecommunications, agriculture, packaging, manufacturing, and medical sectors. Polymers are used in a broad range of applications, including for piping, multipurpose containers, fibres, films, non-woven fabrics, packaging, and bottling.

Safripol is the only local producer of polyethylene terephthalate (‘PET’) and high-density polyethylene (‘HDPE’), and one of two producers of polypropylene (‘PP’) in South Africa.

Our vision is to create plastics that shape our world in a responsible way. As the global demand for plastics is 350 million tonnes per year, we believe that promoting responsible usage is both a financial and fiduciary responsibility.

Revenue

R7 509 million

up 3%

Operating profit

R428 million

up 168%

Operating margin

5.7%

Customer value proposition

Local manufacture and supply of innovative, high-quality, and responsibly produced polymers for use in a wide range of applications

Revenue

R7 509 million

up 3%

Operating profit

R428 million

up 168%

Operating margin

5.7%

Customer value proposition

Local manufacture and supply of innovative, high-quality, and responsibly produced polymers for use in a wide range of applications

“We are committed to being leaders in a responsible and sustainable industry that produces high-quality, reusable, and recyclable polymers for a wide range of applications.”

Nico van Niekerk

Chief executive officer, Polymers

“We are committed to being leaders in a responsible and sustainable industry that produces high-quality, reusable, and recyclable polymers for a wide range of applications.”

Nico van Niekerk

Chief executive officer, Polymers

Nico van Niekerk, CEO | Polymers

Nico graduated from the University of Stellenbosch in 1986 as a chemical engineer. He has also completed an MBA and a Global Executive Development Programme through GIBS. He started his career at the Atomic Energy Corporation and joined Safripol in 1989. During his 30-year career in polymers he held various positions in engineering, production management and technology management. The Dow Chemical Company, which owned Safripol, appointed Nico to start up and optimise the Dow PP plants in Europe and the USA, where he worked and lived for one and two and a half years respectively. In 2003 Nico returned to South Africa and was part of the MBO of Safripol with majority shareholder Rockwood Capital. KAP acquired Safripol in 2017, at which time Nico was the COO. He was appointed as CEO in July 2019.

Operational review

Operating environment

Revenue increased for the year, despite production interruptions due to Covid-19, utility outages, statutory maintenance, and supply chain disruptions. Our positive performance in all product categories was supported by an increase in polymer prices in the second half of the year as well as by increased demand for locally manufactured polymers.

When one considers the impact that the various levels of lockdown had on the travel, sport, and entertainment industries and, as a result, on the demand for plastics – as well as the unforeseen supply chain issues – we were particularly pleased with our volume performance. This was primarily due to market share gains through import substitution.

Improved efficiencies enabled us to counteract the effects of the various disruptions and to improve profitability. Notably, we retain a sound global competitive positioning, which is supported by the conclusions of an independent competitiveness study commissioned with Nexant, a multi-disciplinary consulting company.

Value added

Safripol is the only producer of PET and HDPE in South Africa and only one of two producers of PP. This is of significant value to our clients as supply is readily available from manufacturing plants that are geographically close to their own facilities, making them less vulnerable to supply chain disruptions and global supply and demand factors.

As the leading South African manufacturer in these product categories, we work with our customers to develop unique solutions to meet their specific needs, giving us a distinct advantage over imports. We have a world-class research and development facility, which enables us to deliver superior products to our customers. Our knowledge and technical abilities also enable us to develop new products for use in new markets.

At production level, we are highly flexible and are able to respond rapidly to evolving trends and resulting customer and consumer needs.

A distinctive added value is our focus on producing higher-specification, higher-value polymers, which can be used in more durable applications. This is supported by our ‘Let’s plastic responsibly’ initiative.

Highlights of 2021

We changed our product strategy to focus on the production of higherspecification and higher-value polymers, which are more suited to non-single-use applications.

We initiated engagement with brand owners and converters to design packaging materials that will more easily facilitate recycling.

We developed and produced recycled PET (‘r-PET’) containing resin with a 15% to 25% post-consumer content.

We commissioned Nexant, a multi-disciplinary consulting company, to provide us with an independent competitiveness review of our business and to assist us in identifying development opportunities. Their report was used to develop the Safripol 2030 roadmap.

We commissioned Phillips Townsend Associates Incorporated to benchmark our HDPE and PP operations against those of global competitors and our operations were found to fall within the first quartile for performance.

Operational review

Operating environment

Revenue increased for the year, despite production interruptions due to Covid-19, utility outages, statutory maintenance, and supply chain disruptions. Our positive performance in all product categories was supported by an increase in polymer prices in the second half of the year as well as by increased demand for locally manufactured polymers.

When one considers the impact that the various levels of lockdown had on the travel, sport, and entertainment industries and, as a result, on the demand for plastics – as well as the unforeseen supply chain issues – we were particularly pleased with our volume performance. This was primarily due to market share gains through import substitution.

Improved efficiencies enabled us to counteract the effects of the various disruptions and to improve profitability. Notably, we retain a sound global competitive positioning, which is supported by the conclusions of an independent competitiveness study commissioned with Nexant, a multi-disciplinary consulting company.

Value added

Safripol is the only producer of PET and HDPE in South Africa and only one of two producers of PP. This is of significant value to our clients as supply is readily available from manufacturing plants that are geographically close to their own facilities, making them less vulnerable to supply chain disruptions and global supply and demand factors.

As the leading South African manufacturer in these product categories, we work with our customers to develop unique solutions to meet their specific needs, giving us a distinct advantage over imports. We have a world-class research and development facility, which enables us to deliver superior products to our customers. Our knowledge and technical abilities also enable us to develop new products for use in new markets.

At production level, we are highly flexible and are able to respond rapidly to evolving trends and resulting customer and consumer needs.

A distinctive added value is our focus on producing higher-specification, higher-value polymers, which can be used in more durable applications. This is supported by our ‘Let’s plastic responsibly’ initiative.

Highlights of 2021

We changed our product strategy to focus on the production of higherspecification and higher-value polymers, which are more suited to non-single-use applications.

We initiated engagement with brand owners and converters to design packaging materials that will more easily facilitate recycling.

We developed and produced recycled PET (‘r-PET’) containing resin with a 15% to 25% post-consumer content.

We commissioned Nexant, a multi-disciplinary consulting company, to provide us with an independent competitiveness review of our business and to assist us in identifying development opportunities. Their report was used to develop the Safripol 2030 roadmap.

We commissioned Phillips Townsend Associates Incorporated to benchmark our HDPE and PP operations against those of global competitors and our operations were found to fall within the first quartile for performance.

Products and services

PET

Used primarily in the manufacture of bottles for water and soft drinks

HDPE

Used in many applications such as in piping, chemical containers, toys, and packaging

PP

Used for applications such as furniture, clothing, textiles, automotive components, and packaging

Products and services

PET

Used primarily in the manufacture of bottles for water and soft drinks

HDPE

Used in many applications such as in piping, chemical containers, toys, and packaging

PP

Used for applications such as furniture, clothing, textiles, automotive components, and packaging

How we add value

  • We manufacture PET, HDPE, and PP polymers in an innovative and responsible way for use in many different sectors and applications.
  • We make use of the latest technologies to guarantee quality and value for money for our customers.
  • Working closely with our customers, we are constantly developing new formulations that are enabling them to improve efficiencies and profitability as well as to reduce their environmental footprint.
  • Our supply chain management ensures that we have a sizeable inventory of raw materials, enabling us to reasonably mitigate global supply chain interruptions and maintain production.
  • We support a wide range of litter reduction and recycling initiatives.

How we add value

  • We manufacture PET, HDPE, and PP polymers in an innovative and responsible way for use in many different sectors and applications.
  • We make use of the latest technologies to guarantee quality and value for money for our customers.
  • Working closely with our customers, we are constantly developing new formulations that are enabling them to improve efficiencies and profitability as well as to reduce their environmental footprint.
  • Our supply chain management ensures that we have a sizeable inventory of raw materials, enabling us to reasonably mitigate global supply chain interruptions and maintain production.
  • We support a wide range of litter reduction and recycling initiatives.

Innovation

Constant innovation is fundamental to our business model. We work with converters, retailers, and brand owners to develop solutions that not only improve efficiency and profitability, but reduce environmental impact. As an example, we recently developed a new PET formulation that maintains the intrinsic qualities of the material, namely its clarity and viscosity, but which reduces the energy needed in the customers’ production process by 15%, thereby reducing their energy costs and carbon emissions.

Working with one of our major customers, we have also developed a new formulation for a returnable soft drink bottle. This will allow for the bottle to be re-used eight to ten times before it is recycled and will significantly reduce plastic wastage and carbon emissions. The bottle has been launched nationally and is being supported with a targeted marketing campaign. We also have the production capacity to produce PET using bio-based feedstock, thereby reducing the use of fossil-fuel-based raw materials.

We consistently re-engineer our products to ensure that they are more recyclable and are suitable for new, more sustainable product applications. As an example, HDPE, which is typically used in the production of milk bottles, was re-designed in the previous period to improve its recyclability. Several large customers are already using the new formulation in their packaging. At present, we are working on a process that is intended to make HDPE suitable for use in vehicle fuel tanks, which is a more durable application.

We are also deeply committed to closing the production and usage cycle. Our ‘Let’s plastic responsibly’ initiative gives the business an important vehicle to tell a positive story about the benefits of plastic, as well as to inform, and educate the public about how to use plastic responsibly. Finally, we are on a journey to reduce our carbon emissions by 50%, which will be a major milestone for us.

Certification and accreditation

  • All operations are ISO 9001 certified.
  • The plant at Sasolburg is ISO 14001 certified for environmental standards and ISO 45001 certified for safety standards.

Looking ahead

We expect demand for all of our products to be strong throughout FY22, with our sales volumes limited only by production capacity. Within this context, we will continue to work with customers to meet specific needs and to differentiate our products across the portfolio. We will also continue to drive inter polymer substitution towards the use of PET wherever possible in order to utilise spare capacity.

We will further remain committed to playing a leading role in developing more reusable and recyclable materials and in promoting a culture of recycling in South Africa. We will actively participate in initiatives to increase the level of recycling in South Africa and will continue to explore the potential to integrate recycling into our existing operations.

We are also scoping a material digitisation project, which will significantly improve controls in all areas of the business, as well as our ability to better manage our supply chain and to respond to changing customer needs. Working closely with our customers is at the heart of the business and we will continue to focus on this as a strategic priority.

We are in the final stages of assessing the viability of installing a 10MW photovoltaic (‘PV’) plant in our Sasolburg operation, which will reduce our energy costs and impact on the environment.

Our commitment to sustainability

Plastics are a source of social and economic value that contributes greatly to quality of life. However, the irresponsible use of plastics could significantly and negatively impact on the environment and ecosystems that sustain us. Our Vision 2030 articulates our responsibility to shape the world we live in through our people, products, and customers in order to create sustainable and holistic value for our stakeholders and a sustainable future for our
company, country, and the natural environment.

As a company, we are aligned with the United Nations Sustainable Development Goals (‘SDGs’) and are also guided by the Paris Agreement’s global target of net zero emissions by 2050. We aim to implement a reduction of at least 50% in our emissions by 2030.

Every employee at Safripol has pledged that, in working to meet our own needs, we will take action to preserve the natural environment; preserve a healthy, inclusive society; and support a thriving economy without compromising the ability of future generations to meet their own needs.

Key facts

180 864 tonnes of PET sold

154 845 tonnes of HDPE sold

107 645 tonnes of PP sold

map-polymers-new2-01
pie-polymers-new-01

Innovation

Constant innovation is fundamental to our business model. We work with converters, retailers, and brand owners to develop solutions that not only improve efficiency and profitability, but reduce environmental impact. As an example, we recently developed a new PET formulation that maintains the intrinsic qualities of the material, namely its clarity and viscosity, but which reduces the energy needed in the customers’ production process by 15%, thereby reducing their energy costs and carbon emissions.

Working with one of our major customers, we have also developed a new formulation for a returnable soft drink bottle. This will allow for the bottle to be re-used eight to ten times before it is recycled and will significantly reduce plastic wastage and carbon emissions. The bottle has been launched nationally and is being supported with a targeted marketing campaign. We also have the production capacity to produce PET using bio-based feedstock, thereby reducing the use of fossil-fuel-based raw materials.

We consistently re-engineer our products to ensure that they are more recyclable and are suitable for new, more sustainable product applications. As an example, HDPE, which is typically used in the production of milk bottles, was re-designed in the previous period to improve its recyclability. Several large customers are already using the new formulation in their packaging. At present, we are working on a process that is intended to make HDPE suitable for use in vehicle fuel tanks, which is a more durable application.

We are also deeply committed to closing the production and usage cycle. Our ‘Let’s plastic responsibly’ initiative gives the business an important vehicle to tell a positive story about the benefits of plastic, as well as to inform, and educate the public about how to use plastic responsibly. Finally, we are on a journey to reduce our carbon emissions by 50%, which will be a major milestone for us.

Certification and accreditation

  • All operations are ISO 9001 certified.
  • The plant at Sasolburg is ISO 14001 certified for environmental standards and ISO 45001 certified for safety standards.

Looking ahead

We expect demand for all of our products to be strong throughout FY22, with our sales volumes limited only by production capacity. Within this context, we will continue to work with customers to meet specific needs and to differentiate our products across the portfolio. We will also continue to drive inter polymer substitution towards the use of PET wherever possible in order to utilise spare capacity.

We will further remain committed to playing a leading role in developing more reusable and recyclable materials and in promoting a culture of recycling in South Africa. We will actively participate in initiatives to increase the level of recycling in South Africa and will continue to explore the potential to integrate recycling into our existing operations.

We are also scoping a material digitisation project, which will significantly improve controls in all areas of the business, as well as our ability to better manage our supply chain and to respond to changing customer needs. Working closely with our customers is at the heart of the business and we will continue to focus on this as a strategic priority.

We are in the final stages of assessing the viability of installing a 10MW photovoltaic (‘PV’) plant in our Sasolburg operation, which will reduce our energy costs and impact on the environment.

Our commitment to sustainability

Plastics are a source of social and economic value that contributes greatly to quality of life. However, the irresponsible use of plastics could significantly and negatively impact on the environment and ecosystems that sustain us. Our Vision 2030 articulates our responsibility to shape the world we live in through our people, products, and customers in order to create sustainable and holistic value for our stakeholders and a sustainable future for our
company, country, and the natural environment.

As a company, we are aligned with the United Nations Sustainable Development Goals (‘SDGs’) and are also guided by the Paris Agreement’s global target of net zero emissions by 2050. We aim to implement a reduction of at least 50% in our emissions by 2030.

Every employee at Safripol has pledged that, in working to meet our own needs, we will take action to preserve the natural environment; preserve a healthy, inclusive society; and support a thriving economy without compromising the ability of future generations to meet their own needs.

Key facts

180 864 tonnes of PET sold

154 845 tonnes of HDPE sold

107 645 tonnes of PP sold

map-polymers-new2-01
pie-polymers-new-01

Sustainability highlights

We successfully launched our ‘Let’s Plastic Responsibly’ initiative, which is aimed at informing consumers about the many applications and benefits of plastics, as well as about how to use plastics responsibly.

We commissioned The Green House to conduct a life cycle assessment (‘LCA’) of all our products based on the ISO 14044:2006 standard.

We committed to the Operation Clean Sweep® (‘OCS’) pledge. OCS is an international environmental stewardship project, which aims to prevent leakage of plastic pellets, flakes, and/or powder into the environment.

We partnered with the PET Recycling Company (‘PETCO’), an industry initiative that promotes post-consumer PET recycling, to establish three waste collection sites – including a river litter-boom – in vulnerable river catchment areas in KwaZulu-Natal.

We partnered with Green Corridors NPC and a black-empowered enterprise, Tri-ecotours, to scale up the implementation of river litter-booms. Six new booms were installed between April 2021 and year-end.

We partnered with Green Corridors NPC to sponsor and establish the KwaMashu Materials Beneficiation Centre (‘KMBC’) in KwaZulu-Natal to serve as a centre for processing difficult-to-recycle plastics and as a product development hub for developing prototypes for the beneficiation of these plastics.

We donated 1 500 bulk bags and 500 colour-coded recycling wheelie-bins to PETCO for distribution to beneficiaries involved in waste collection and recycling across the country.

Sustainability highlights

We successfully launched our ‘Let’s Plastic Responsibly’ initiative, which is aimed at informing consumers about the many applications and benefits of plastics, as well as about how to use plastics responsibly.

We commissioned The Green House to conduct a life cycle assessment (‘LCA’) of all our products based on the ISO 14044:2006 standard.

We committed to the Operation Clean Sweep® (‘OCS’) pledge. OCS is an international environmental stewardship project, which aims to prevent leakage of plastic pellets, flakes, and/or powder into the environment.

We partnered with the PET Recycling Company (‘PETCO’), an industry initiative that promotes post-consumer PET recycling, to establish three waste collection sites – including a river litter-boom – in vulnerable river catchment areas in KwaZulu-Natal.

We partnered with Green Corridors NPC and a black-empowered enterprise, Tri-ecotours, to scale up the implementation of river litter-booms. Six new booms were installed between April 2021 and year-end.

We partnered with Green Corridors NPC to sponsor and establish the KwaMashu Materials Beneficiation Centre (‘KMBC’) in KwaZulu-Natal to serve as a centre for processing difficult-to-recycle plastics and as a product development hub for developing prototypes for the beneficiation of these plastics.

We donated 1 500 bulk bags and 500 colour-coded recycling wheelie-bins to PETCO for distribution to beneficiaries involved in waste collection and recycling across the country.

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