Social and relationship capital

Our business activities impact many aspects of society and our relationships with our employees, investors, suppliers, customers, industry and government are important for our success. Helping uplift the communities in which we operate is fundamental to our business sustainability. Building partnerships with trade unions and engaging in other structured forums assists us in effectively managing the risks associated with industrial action.

KEY INPUTS

  • Strong employee relations, positive relationships with trade unions
  • Constructive engagements with government and tax authorities
  • Solid partnerships with our customers and suppliers
  • The confidence of our shareholders
  • The trust of the communities in which we operate
  • A well-established schools’ partnering programme, with a Nampak champion appointed for each of the seven schools

  OUTCOMES

           
      2017   2016  
Taxes paid to governments R million   1 251.3   889.7  
Long-term agreements with key customers        
Economic value added R billion   5.60   6.73  
Corporate social investment R million   9.7   8.5  
B-BBEE contributor status Level   6   3  
Strike action     None   None  
Black management %   58   55  

HOW WE ACHIEVED THESE OUTPUTS AND OUTCOMES

  • Initiated work on our B-BBEE efforts including a new ownership scheme
  • Refreshed our values, updated our code of ethics
  • Held joint consultative discussions with all trade unions
  • Extended our participation with industry partners on waste management and recycling initiatives
  • Provided comment to government on proposed waste management legislation
  • Informed investors on performance and strategy progress
  • Funded upgrades to our partner schools; offered teachers opportunities to enhance their skills
  • Supported various enterprise development initiatives

 

   

THE KEY RELATIONSHIPS ON WHICH WE RELY TO CREATE VALUE

   
 

We considered the following to be the key issues of each of our stakeholder groups in 2017. The icons show the links to our material issues.

 
  SHAREHOLDERS AND OTHER FUNDERS
 

Key issues

  • Changing competitive environment
  • Repatriation of funds from Angola and Nigeria
  • Cash generation
  • Resumption of dividend payments
  • Nampak’s B-BBEE contributor status

Our actions

  • Focused on operations excellence to improve competitiveness, rationalised product offering
  • Secured US$79 million cash repatriation from Nigeria and US$48 million from Angola
  • Implemented tighter financial disciplines on working capital and capex
  • Appointed group corporate finance and treasury manager
  • Improved hedging of cash balances in Angola from 61% to 89%
     
   
 
  EMPLOYEES
 

Key issues

  • Safety in the workplace
  • Drive for high-performance culture requiring shift in skills and attitude
  • Impact of cost-reduction initiatives on job security
  • Performance management

Our actions

  • Continued focus on workplace safety; reduced LTIFR to 0.41 from 0.48 in 2016 and 0.89 in 2015
  • 129 employees completed various training programmes across all levels
  • Engaged with employees affected by line closure to minimise retrenchments
   
 
  TRADE UNIONS
 

Key issues

  • Establishment of Nampak Enterprise Bargaining Forum
  • Conclusion of strike-free wage negotiations
  • Wage demands higher than inflation
  • Partnership and cooperation

Our actions

  • Established Nampak Enterprise Bargaining Forum in consultation with unions
  • Concluded successful wage negotiations in all divisions
  • Agreed wage increases marginally ahead of inflation over three years
  • Strengthened our partnerships with labour
   
 
  CUSTOMERS
 

Key issues

  • Retaining key customers
  • Changes to the purchasing strategies of large customers in the Rest of Africa
  • Ensuring constructive customer relationships
  • Offering quality and innovation
  • Rationalising product offering (SKUs)

Our actions

  • Concluded supply contracts with major customers
  • Formalised plans to rationalise our paper facilities in southern and east Africa
  • Engaged with customers to ensure that we understand their needs
  • Provided quality products in full on time
  • Assured customers that any reduction in SKUs would be managed responsibly
   
 
  SUPPLIERS
 

Key issues

  • Benefits of “buy better” initiative
  • B-BBEE procurement targets
  • Consistent supply of quality raw materials

Our actions

  • Centralised procurement to generate savings
  • Negotiated long-term contracts for the supply of essential raw materials
  • Secured by way of contract all glass raw materials
  • Increased purchases from accredited B-BBEE suppliers
   
 
  INDUSTRY BODIES
 

Key issues

  • Waste management; impact of post-consumer packaging
  • Proposed new taxes on sugar-sweetened beverages and carbon emissions
  • Weak manufacturing activity in South Africa

Our actions

  • Engaged with forums on waste management plans
  • Provided submissions to government on policy changes
  • Participated in the Manufacturing Circle’s Map to a Million new jobs initiative
   
 
  GOVERNMENT AND REGULATORS
 

Key issues

  • Good governance and compliance
  • Sound relations with local authorities
  • Liquidity issues in Angola, Nigeria and Zimbabwe
  • Plastic bottle deposit in the UK
  • Proposed taxes on carbon emissions and sugar-sweetened beverages

Our actions

  • Upheld comprehensive governance policies and practices; complied with JSE Listings Requirements and revenue authorities
  • Engaged constructively with municipalities
  • Maintained close contact with banking sectors in Angola and Nigeria
  • Continued engagement with government on potential negative impact of proposed taxes
  • Engaged authorities on proposed health promotion levy (sugar tax)
   
 
  CIVIL SOCIETY
 

Key issues

  • Supporting the communities in which we operate
  • Contributing to secondary and tertiary education
  • Our long-term initiative of providing environmental education

Our actions

  • Contributed R9.7 million to social investment
  • Extended our support to partnered schools for 15th year; provided bursaries
  • Renewed support for eco-schools initiative