agenda 10h00 - welcome and apologies 10h03 - short new petco dvd 10h10 - chairmans annual report...
TRANSCRIPT
AGENDA
10h00 - Welcome and apologies 10h03 - Short new Petco DVD 10h10 - Chairman’s Annual Report 10h20 - CEO’s Review 10h35 - Financial Statements & Auditors’ Report 10h40 - Appointment of auditors for the coming year 10h45 - Incoming Chairman’s “Road Ahead” 10h55 - Introduction of existing Board of Directors 11h00 - General: any other business Break for refreshments 11h20 - Guest Speaker Claire Janisch:
“Biomimicry – “Innovation beyond sustainability” 12h00 - Light lunch and Networking 13h00 - Discover the World of Beer Tour
Chairman’s Report
IT’S OUR 5TH ANNIVERSARY…
… and we are proud of what has been achieved.
PETCO understands that the whole is greater than the
sum of its parts
The result of hard work by all concerned is a successful network of people involved in PET Plastic Recycling
This network improves economies, lives and the
environment
It grows stronger and benefits all concerned
Petco has become part of the success story of
post-consumer PET recycling around the
world
GROWTH OF PET RESIN MARKET
PETCO TOP 10 ACCOMPLISHMENTS FOR 2009
29,048 tons (957 million bottles) post consumer PET bottles collected & recycled in SA
6311 tons up from 2008 32% of beverage PET in 2009 (local market size:130 000 tons) Achieved despite extremely tough market conditions
Contracted recycler Extrupet upgraded their recycling plant to accommodate 2000MT+ of bottles per month
Extrupet installed & commissioned a new wash plant to produce a quality of flake suitable for Bottle-2-Bottle
Sen li Da Chemical Fibre Company commissioned
integrated Bottle-2-Fibre plant in Newcastle (22 737 ton capacity) to produce fibre for the domestic market
Signed up 16 new Associate Members: part of broadening stakeholder network
PETCO TOP 10 ACCOMPLISHMENTS FOR 2009
Hosted 3 membership workshops in Cape Town & 3 in Johannesburg including one that focused on “Design for Recycling”
Despite economic recession & closure of SANS, collection of recycling levies invoiced to end Dec. 2009 maintained as percentage of market size - largely due to voluntary import declarations
Invited to join the Global Alliance for Recycling and Sustainable Development (GARSD)
PETCO & partners in Recovery Action Group developed a collective recycling brochure (part of a combined communication strategy) Inserted into the Pick 'n Pay Fresh Living Magazine
The new Waste Management Act came into effect 01 July 2009. PETCO has been involved in all public participation processes
CEO’s Review
OPERATIONAL SUMMARY OF THE YEAR:
Even though 2009 was a very difficult year for PET recycling globally, we
still managed to achieve our recycling targets
This was possible through increased voluntary financial support from bottlers, converters, raw material
producer & Coca-Cola South Africa
OPERATIONAL SUMMARY OF THE YEAR: COMMODITY PRICES
During the period of collapsed commodity prices, recycled PET struggled to compete with virgin alternative Crude oil crashed from $150/barrel to $50/barrel in global recession downstream market for PET chip fell sharply to Nov 2008 low (recovered
thereafter) 30% lower cost of virgin polyester versus using recyclate previously viable schemes plunged back to poor economics before 2004 the levels of subsidy required to sustain the buying, collecting & recycling of
post consumer PET bottles, shot up PETCO battled to support its “Category A” projects & maintain PET
recycling targets: had to dig into its reserves. During late 2009 prices recovered: relief, inter alia, for recyclers Strong rand resulted in PET industry struggling to compete with
imported products (cost base US $)
PETCO would like to see price levels stabilise where recycling becomes viable in its own right.
OPERATIONAL SUMMARY OF THE YEAR: LIMITED LEVY INCREASE
Limited financial support acquired from the PET industry - companies tried to cut operating costs
In early 2009, PETCO implemented a limited levy increase of R250/ton for those buying PET resin
Brand owners, notably Coca Cola, have increased their grant in aid
Reduced levels of business volumes: increased competition in all sectors (virgin producers unwilling to relinquish volumes to recyclers)
OPERATIONAL SUMMARY OF THE YEAR:B2B
On the upside, recent advances in PET recycling technology makes it possible to “close the loop” by recycling bottles and containers back into bottles
The “used bottle-to-fibre end-use” market saturated & limits PETCO‘s performance
In future an increasing amount of post-consumer bottles back into PET bottle resin
Extrupet (Pty) Ltd now produces around 24,000 t PET recyclate annually, mostly from post-consumer PET beverage bottles
Extrupet can produce food-safe rPET to North American FDA standards & likely to production material that comply to requirements of European EFSA soon.
We hope Extrupet & possibly Hosaf will invest in more Bottle-2-Bottle capacity in next 1-2 years
PETCO still needs to encourage and improve sorting among the collectors to improve the quality of post consumer PET.
OPERATIONAL SUMMARY OF THE YEARNEW CONTRACTED RECYCLER
PETCO started to engage with a new recycler Sen Li Da Chemical Fibre (Pty) Ltd. (15 000 sq m plant):
Vertically integrated Uses all of its PET flakes for fibre conversion Two collection points (Jhb & Durban) Provides income opportunities for +/- 200 people (120 are local, 80
from overseas)
OPERATIONAL SUMMARY OF THE YEAR: LEGISLATION
New Waste Management Act effectively makes Extended Producer Responsibility a legal requirement going forward
Packaging industry (including PETCO) developing a Paper and Packaging Industry Waste Management Plan (IWMP) as required by Minister
In future there will be a compulsory packaging and paper levy of some kind
A new structure will be needed to manage inter-alia the funding and monitor progress - consistent with current good practice globally
Our challenge at PETCO is to ensure that the levy is as low as possible & that all players in packaging & paper industry share the responsibility
We don’t want to jeopardise existing initiatives such as the current PETCO levy, but to support it & extend it to other packaging sectors
OPERATIONAL SUMMARY OF THE YEAR: PARTNERSHIPS
Our partnership with the Plastics Federation of South Africa (PFSA) in creating awareness continues to be close & mutually beneficial
Our target for 2010 is 30 380 tons or 31% beverage PET
We believe that high rates of recycling can only be achieved through the separation of waste at household level
This year PETCO supported projects (cost: almost R1m) with a strong focus on public & consumer-based education and awareness
programmes
CATEGORY “A” PROJECTS
PETCO spent R26.2m (87%) of its 2009 budget on Category “A” projects from January to December 2009
Three Category “A” projects approved to date:
Extrupet: 5-year agreement with PETCO: 5676 tons of PET recycled in
2005; 12 333 tons in 2007, 14 000 in 2008, 14 295 in 2009 and rising to approx 26 000 tons by 2010 (depends on market conditions)
Hosaf Recycling: 5-year agreement with PETCO; 2164 tons of PET
recycled in 2005; 3901 tons for 2007, 4091 for 2008, 3371 for 2009 and
rising to +6000 by 2010 (depends on market conditions)
Kaytech Engineered Fabrics: 4-year contract with PETCO: 7800 tons of
RPET over the period
Two additional projects due to come on stream in 2010: Extrupet's new Bottle-to-Bottle Recycling Plant ramping up to 9000 tpa through
2010, and State-of-the-art bottle-to-fibre plant by SenLi Da Chemical Fibre (Newcastle,KZN).
Will take approx 12 000 tons of bottles in 2010 (capability of up to 22 000 tons in the periods following)
PET Recovery and Recycling Pet recovery stations Pet recovery projects and events
Information and Communication
Exhibitions and workshops : Petco Specific In conjunction with the Plastics Federation of South Africa
High visiblity events with partners: supported 11 events where PETCO provided branded clean-up bags (up to 8000 per event), T-Shirts, flags and banners, posters at registration & adverts in event programmes
Petco Associate Membership Programme: 16 new associate members 6 PETCO membership workshops
Communication and public relations: Enviromark newsletter; PET ReFresh electronic newsletter; recycling
brochure produced by Recovery Action Group (RAG); PETCO Pulse electronic newsletter aimed at those involved in the technical side of PET recycling.
Clean Up Campaigns and Litter Awareness
PETCO supported 16 clean-ups across South Africa
Education and Training Pet presentations to schools, communities and environmental organisations PET recycling collectors training The Fantastic Plastics School Competition
Joint Venture Projects with Industry and the Private Sector Coca-Cola /PETCO Confederation Cup/Rustenburg School collection
competition - 20 000 PET bottles collected Kruger Park: PETCO, PLASFED, Collect-a-Can, TRGC and Buyisa-e-bag
developed public awareness Recovery Action Group sponsored trailer signage for Mama-She Waste
Recyclers Sasol, in partnership with PETCO launched a drop off site at petrol stations
in Ferndale, Johannesburg
SHAREHOLDING
RELOOK, RETHINK, RECYCLE: COCA-COLA CHAIRS & SHIRTS
Coca-Cola Company and Emeco, a leading furniture manufacturer, have combined their iconic products, the Coca-Cola contour bottle package and the famous Navy® Chair, to create a new chair made from at least 111 recycled plastic bottles
It is estimated that more than 3 million PET plastic bottles will be repurposed annually for the production of 111 Navy Chairs
RELOOK, RETHINK, RECYCLE: NIKE & 2010 FIFA World Cup™
Financial Statements
INCOME & EXPENDITURE
INCOMING CHAIRMAN’S ROAD AHEAD
8 STRATEGIC IMPERATIVES FOR PETCO: 2010/2011
Further bottle-2-bottle recycling
Stakeholders are encouraged to invest in B2B rPET capacity to match rPET growth targets.
PETCO will continue to support new “end use” development for rPET (B2B recycling is an international trend – THE FINAL FRONTIER)
Strive towards inclusion of ALL pet industry role players
We want companies that are still not members of PETCO to become participants in PETCO (Become a member, there are many membership categories)
Re-evaluate collection strategy
The current collection strategy should be re-evaluated. The possibility of direct support of collectors could start new collection initiatives and improve the quality of the collected bottles.
Develop an understand pet bottle end-use economics
The detailed economics of competing end-use solutions to be set out
and assessed.
8 STRATEGIC IMPERATIVES FOR PETCO: 2010/2011
Reaffirm and ensure ongoing stakeholder commitment
Buy-in and continued support from PETCO shareholders, recyclers, suppliers and municipalities is essential: a strategy required
Get the retailers on board
Retailers could support end-use markets & assist in expanding collections, assist with funding & take up their percentage shareholding
Changed financial management practices
Given increased market volatility, we are re-assessing & balancing both income and expenditure more frequently
Increased consumer awareness, marketing and PR
Continue existing education and awareness work
Seek integration with corporate social investment programmes
Develop an improved strategy to communicate with municipalities
4 THREATS TO SUCCESSFUL EXECUTION OF STRATEGIC IMPERATIVES
Funding pressure
Due to the market conditions of 2009, PETCO has used reserves to fund recycling through the recent adverse economic cycle.
Government legislation
Deposit or Levy on NRPET bottles
PET could be labelled a priority waste in terms of the new act
PET converters who do not belong to PETCO may be asked to prepare their own industry waste management plan (IWMP)
Legislation is potentially positive:
DEA is looking to industry to put IWMP together
Legislation could also support PETCO's levy collection efforts
Lack of leverage…
…with some key stakeholders within the PET industry who do not participate in PETCO
Inadequate collection infrastructure: The current method of collection largely from dumpsites may not be
capable of yielding the volumes as targeted Efforts in curb side collection, MRF's & separation at source may be
stalled due to lack of funding
4 THREATS TO SUCCESSFUL EXECUTION OF STRATEGIC IMPERATIVES
WHERE TO FROM HERE?
PETCO is committed to
work with our partners in
government, industry and civil society in South Africa to
diverting plastics from landfill
in order to
reduce climate change impact,
address the
energy deficit,
and achieve a step change in
efficient use of resources
It will be an exciting process to watch, and we hope that you'll be involved
INTRODUCING PETCO’S BOARD OF DIRECTORS FOR 2010 – THANK YOU
Casper Durandt, Chairmanrepresenting the Brand Owners - Technical Manager SA Division, Coca-Cola SA
Bronwen Rohland, Vice-Chairmanrepresenting Retailers - Director Strategy, IS, Supply Chain and Sustainability, Pick 'n Pay
NON-EXECUTIVE DIRECTORSGreg Morse
PETCO Board Appointment - Manufacturing Director, Peninsula Beverage Company
Rob Rodgerrepresenting the Environment - Director, Nampak Polycyclers
EXECUTIVE DIRECTORSCarel Engelbrecht
representing Bottlers - Supply Chain Manager, Coca-Cola Canners
David Taylorrepresenting the Converters - Regional Director Nampak Megapak and Petpak Cape
Peter Whiterepresenting the Resin Producer - Managing Director, Hosaf Fibres
Vimlan Moonsamyrepresenting the Bottlers - Manager Technical Services, SAB Miller (ABI Soft Drinks Div)
ALTERNATE DIRECTORJustin Smith
representing Retailers - Manager, The Good Business Journey, Woolworths
Guest SpeakerClaire Janisch
GUEST SPEAKER: CLAIRE JANISCH
“Biomimicry - Innovation beyond sustainability”
Claire Janisch has an MSc.ChemEng in the field of Environmental Process Engineering
A sustainability and innovation advisor, environmental educator and biomimicry professional. She currently heads up the biomimicry activities and projects in South Africa
She is also a co-creator of the Genius Lab in South Africa, an experiential learning organisation inspiring innovation and future thinking for organisations and individuals
Thank you!
Next: Light Lunch, followed by World of Beer Tour