STRATEGIC CONTEXT

Our strategy – performance and plans

Nampak's strategy is our plan to create value for all our stakeholders by delivering sustainable profitability.

We measure progress against our strategy through the key performance indicators (KPIs) of our executive management team, details of which are in the Remuneration report.

STRATEGIC OBJECTIVE     HOW WE WILL ACHIEVE THIS     HOW WE DID IN 2018     HOW WE RATE OUR PERFORMANCE     WHAT WE WILL DO NEXT
    Actively manage our portfolio    
  • Closed Bevcan Cape Town tinplate line
  • Decided to sell Glass business
  • Implemented first Plastics plant and depot closures
  • Impaired R677 million at our Glass operation
       
  • Dispose of Glass business
  • Dispose of Plastics' crates and drums business
  • Implement further Plastics site consolidation
    Prudently manage cash    
  • Pursued de-risking plan to address unfunded UK pension fund liability
       
  • Continue to engage with UK pensioners to find acceptable solutions under strict guardianship of trustees
    Invest to compete    
  • Substantially completed DivFood recapitalisation
  • Recapitalised Plastics liquids in-plant facility for a key customer
       
  • Complete modernisation of DivFood's two-piece can line in Rosslyn and installation of additional tinplate aerosol can capacity at Vanderbijlpark
  • Invest in seam-to-seam technology for tubes
  • Invest in moulds and injection moulders required to produce closures for motor lubricant bottles
  • Launch new liquid carton designs, with improved appearance and functionality
    Manage cash fixed costs    
  • Reduced head office costs by R29 million
  • Reduced procurement/supply chain costs by R87 million
  • Reduced Plastics headcount by 204, Paper headcount by 88
  • Consolidated the Isando and Industria Plastics Liquid Packaging facilities
  • Reduced finance costs by 30%
  • Reduced overhead costs at Nampak Plastics Europe
       
  • Extract value and savings on total cost of ownership
  • Focus on operations excellence to drive efficiencies
  • Ensure below-inflation cash fixed cost increases
  • Continue to tightly control our capital investment programme
  • Secure annual cost savings of R60 million from closure of Bevcan Cape Town line
    Improve business performance by buying, making and selling better    
  • Generated greater Bevcan efficiencies – including reduced spoilage and cost savings
  • Recorded better DivFood supply chain management and a stronger safety performance
  • Improved profitability of liquid cartons business by focusing on cost containment and operational efficiencies
  • Improved our safety performance with LTIFR of 0.27
  • Reinvigorated maintenance policy and practice
       
  • Leverage Nampak R&D capabilities to further improve manufacturing performance and raw material suitability
  • Drive sales excellence for margin expansion, driven by data
  • Continue to focus on operations excellence and better safety performance
    Grow at a reasonable and sustainable return    
  • Reported lower profitability from Bevcan Nigeria and Angola
  • Grew Bevcan Nigeria's market share
  • Reported strong Zimbabwe Plastics and Paper performances
       
  • Grow at hurdle rate
    Partner with major multinational customers    
  • Increased Bevcan Nigeria sales volumes
  • Reduced Bevcan Angola sales volumes
  • Secured an extension of a contract to supply paper cartons to a key customer in Nigeria
       
  • Continue to leverage strong relationships with multinationals
  • Closely monitor changes in the purchasing strategies of multinationals
  • Extend technology partnerships to sustain market positions
    Sensibly manage and grow our presence in current jurisdictions    
  • Resumed project in Angola to convert tinplate beverage can line to aluminium at cost of approximately US$20 million
  • Reduced complexity of Malawi operations
       
  • Convert Angola tinplate beverage can line to aluminium at cost of US$20 million
  • Invest approximately R100 million in our first food can line in Nigeria, R38 million of which is represented by a foodcan line that was acquired as part of the Botswana acquisition in the prior year
  • Investigate opportunities to add more can sizes to our Bevcan Nigeria offering and debottleneck our line to increase our production capacity
  • Drive exports in select markets where margins are attractive
Good progress made Some progress, more to come Disappointing performance