LEADERSHIP

André Oberholzer

BUILDING CREDIBILITY

Gary Chaplin

IN A TIME OF CRISIS

Industry leaders explain how they not only future-proofed their businesses, but also tackled the challenges of a pandemic head-on. By NIA MAGOULIANITI-MCGREGOR

While there is no good time for a crisis, Sappi found itself inadvertently well prepared. Besides operations being classifi ed as “essential” during lockdown, the company’s corporate strategy from 2015 to 2020 had already shifted in such a way that there were unforeseen benefi ts when the pandemic unfolded, says Sappi’s group head of corporate affairs André Oberholzer. “Our shift in strategy to ‘Thrive25’ – defi ning how we contribute to a thriving, low-carbon world – prepared us. We were already moving towards a more diversifi ed business, including renewable resource-based non-paper products.

“Demand had already decreased for high-quality paper used in high-end catalogues and fashion magazines, so we had adjusted our focus.”

As the immediate needs of customers changed during various lockdown levels, the company pivoted operations. “For example, A4 copy paper demand was down, but specialised paper for e-commerce needs such as food packaging and household wipes increased,” Oberholzer explains. With supply chains disrupted and shops closed, textile demand dropped so that dissolving pulp, usually spun into viscose, was steered instead into the manufacture of medical gowns and disinfectant wipes.

“COVID-19 stress tested our supply chain, relationships with customers and employees and our internal health system,” he continues, “but Sappi absorbed the shock. We kept people working. We reduced the impact.”

PIVOTED MANUFACTURE

National Pride’s business was not heavily compromised by the pandemic, says CEO Mark Russell. “The demand for diapers and wipes, as well as sanitary pads and adult incontinence products remained robust.” This enabled the company to continue employing at full salary.

National Pride was well placed to navigate challenges after a successful management buyout in April 2020, says COO Kugin Muthu. “It meant a smaller, more agile entrepreneurial management team. We pivoted to manufacturing three-ply surgical face masks. We felt this was a key area where we could use our expertise in manufacturing using nonwoven materials,” says Muthu. He describes this as a corporate responsibility initiative that also built staff morale.

The company introduced sanitiser products to its range at the request of a supplier, who had pivoted from paint manufacturing.

Future-proofi ng the business is ever on the agenda, especially now, says CCO Luciano Giovio. However, some challenges remain. “One is the cross-border delays experienced at Beitbridge, which affects export volumes.”

From left: Luciano Giovio, Kugin Muthu, Mark Russell

“COVID-19 GAVE US SPACE TO RE-EVALUATE OUR BUSINESS AND REFINE STRATEGY TO GROW AND ENTER NEW MARKETS.” – GARY CHAPLIN, CEO,

KAP INDUSTRIAL HOLDINGS

He says that the company continues to expand its product range with a particular focus on utilising biodegradable materials. “We have recently installed a new wet wipes machine, enabling us to manufacture our range locally. We are currently developing a range of biodegradable and fl ushable wet wipes for babies.”

LESSONS LEARNED

KAP Industrial Holdings Limited CEO Gary Chaplin says COVID-19 has been just one of three major challenges the company has experienced in the past three years. “Fortunately, we had learned several key lessons post the collapse of our previous major shareholder, Steinhoff, and developed confi dence in the resilience of our business model after the cyclical global collapse of the polymer industry,” says Chaplin.

“Our fi rst response to COVID-19 was to preserve liquidity and credibility,” says Chaplin. “Nonessential expenditure was cut back and all capital expenditure suspended. We forecast forward weekly, plotting possible scenarios and actions.

“We had to make some tough decisions,” says Chaplin of the 20 per cent salary reduction for all non-bargaining unit staff. “In our regular webcasts we explained our risks and how we were mitigating these, and staff responded positively.”

Since lockdown 5 was lifted, says Chaplin, the timber and bedding divisions have benefi tted from home improvement. “Demand for our polymer products is robust due to increased health and hygiene spend, and we are also seeing improving demand across our logistics businesses. While some of the businesses, including automotive, remain sluggish, we’ll trade through it.

“COVID-19 gave us space to re-evaluate our business and refi ne strategy to grow and enter new markets,” adds Chaplin. He says the pharmaceutical, geotechnical and agricultural spaces have since been identifi ed as “opportunities”.

With improving trade and credibility enhanced with banks and shareholders, the company recently paid back last year’s salary cut to staff. “It was a wonderful thing to be able to do,” concludes Chaplin.