Monday, May 14, 2007

Sappi’s new CEO, at last

Sappi’s new CEO, at last
Sappi captures Ralph Boëttger, a passionate aviator, and executive director at Imperial Holdings.

Barry Sergeant
14 May 2007

Sappi, the world's leading maker of fine paper and dissolving pulp, has announced the appointment of Roeloff Jacobus "Ralph" Boëttger as its new CEO, following 13 months when Sappi stalwart Eugene van As reverted to executive from non-executive chairman to fill the interregnum after the sudden, and shock, departure of previous CEO Jonathan Leslie.

On Monday Sappi also announced that Van As would retire from the board of Sappi at its annual general meeting in March 2008. Boëttger, 45, a chartered accountant by training, was at age 34 appointed CEO of Safair, and appointed the next year to the executive committee of SAFREN Limited. Since 1998 he has been with Imperial Holdings, following the acquisition of Safair; since 2002, he has been an executive director of Imperial Holdings.

The new moves at Sappi should not only resolve a period of executive instability at the group, but should also see the group continuing to capitalise on recent evidence that fortunes may at least have changed in the global forest products sector.

The sector has recorded a rotten century to date, but in the divisions, fine paper has suffered the most. In Europe, prices for coated fine paper may at last be turning around, after six years of decline. In North America, the fine paper sector has been hurt by Asian imports, but these have recently been hit by a levy, and may soon be subject to a further one.

Against this background, on March 6 last year Sappi made the shock announcement that Leslie tendered his resignation from the group with immediate effect. Leslie had joined Sappi in April 2003 from a senior position at Rio Tinto, a senior global diversified resources stock. Subsequent to leaving Sappi, Leslie re-emerged as the CEO of London-listed Nikanor, which is involved in rehabilitation of a number of material copper cobalt mines in the Democratic Republic of the Congo.

For some time, investors have been anticipating a change in Johannesburg-based Sappi's fortunes. Its latest quarterly results, released last week, appear to have justified the move in the stock's price to record highs of $18,65 a share on the New York Stock Exchange, from a low of $10,67 over the past twelve months.

Sappi reported adjusted quarterly operating income (which attempts to show like-on-like figures) for the three months to March 31 2007 (the second quarter of Sappi's 2007 financial year) of $74m, the best in four years. Sappi's results were significantly boosted by sharp increases in the price of pulp, the material derived from trees and used as the essential ingredient in papermaking.

Sappi is long of pulp in southern Africa and North America, but short of pulp in Europe. Sappi manufactures 46% of its product in Europe, 29% in North America, and 25% in southern Africa.
Given the group's global operations and exposure, Boëttger's experience in that field clearly boosted his chances of selection as new Sappi CEO, a process that was both drawn out and meticulous. At Imperial Holdings, Boëttger has been responsible for the local and international logistics operations, the aviation division and the heavy commercial vehicle distribution operations. His field of responsibility encompasses businesses operating in southern Africa, numerous European countries, the Middle East and Asia.

No comments: