Laduma April 2015

Quarter 1, 2015

LADUMA

Grand Gold awards – page 2 Talking turbines – page 3 Effluent tank installed – page 5

ONE TEAM - ONE GOAL !

MESSAGE FROM THE MD The year started with the confirmation that the South African sugar industry is facing its worst drought in over 20 years.

As a result, the cane crop is estimated at below 15 million tons and molasses is in extremely short supply.

NCP Alcohols will thus be significantly increasing our imports of molasses and alcohol to ensure that we can meet our sales demand which remains strong. We have concluded contracts for molasses supply through until May 2016 so although this higher price is going to put major pressure on our margins we will be running the distillery at capacity. Sales demand for the year to date is similar to Q1 of 2014, but with a greater focus on the export market which now makes up 60% of our business as opposed to 53% last year.

The drought is an exceptional event which will constrain our growth this year, but NCP Alcohols is a robust business supported by increasing demand in Africa and we should not lose sight of our long-term intention to continually develop

our position in this market due to the distractions of the local sugar crop.

The long-term constraints on molasses supply, highlighted by the current drought, require us to consider alternative raw material and production options and to this end a project team has been established with the mandate to report to the Board with recommendations and a complete project feasibility by the end of the year.

We should remember our values of Passion, Quality, Honesty and Simplicity as during this abnormal year it will be key to focus our energy on those aspects of the business where we can have the greatest impact in order to adjust for those external factors that we cannot control.

Implementation of the various optimisation projects undertaken over the past two years now becomes of critical importance as we ensure we have an effective base on which to continue our African development.

g

lin Peter Star

Two Grand Gold awards HOW or WHAT? The organising committee of the Monde Selection International Quality Institute has awarded NCP Alcohols ‘Grand Gold’ for its Ethanol 96.5% and Light Spirit 43%.

NCPA is well-known for the quality of its potable alcohol both locally and internationally and has received gold or grand gold awards from the International Monde Selection since 1969. This year’s double gold award also marks the 46th year that the company has received accolades from the Monde Selection International Quality Institute.

Says MD Peter Starling, “This is no small feat – and a huge feather in our cap. I am proud of our team, and for their remarkable achievement every year for the past 46 years.”

2

SAFETY is a way of life

It is no secret that communication is considered key in any organisation, that employees are at the very heart of a company, and how they treat each other is vital for the smooth running of operations.

In technical terms, interpersonal communication is sending and receiving information between two or more people. It involves an interaction between coworkers, and between superiors and subordinates.

But in practical terms, it is not as much about WHAT you say, but HOW you say it that moulds your relationships with team members; being mindful when you speak plays a vital role in interpersonal communication between colleagues. Using an ‘automatic’ state of mind that ‘runs off’ in discussion without much thought could lead to dysfunctional communication.

Instead a person should always be aware when talking to co-workers to have an efficient discussion.

Research on the complexity of communication reveals that it takes ‘people skills’, ‘soft skills’ and ‘personal skills’ to work efficiently. It has also identified interpersonal communication skills as critical attributes for employees when seeking promotion.

Some researcher even go as far as to document that speaking skills are more important than writing skills in communication.

We

LOVE our turbines

Why do we love our Turbine #2?

The turbine saves the company around R9 million in electricity costs each year, apart from its reliability.

Plus, as a result of all the improvements made to the turbine over the past five years, the turbine’s 2015 overhaul is now predicted to cost less than R1,7 million, compared to around R3,6 million for a normal major service.

Says Engineering Manager Carl Freyer, “The turbine had its last major service in April 2010, which included a full inspection, non-destructive testing and clearance measurements, followed by high-speed balancing and trip testing in Johannesburg.”

Since then we have: • Installed an electronic Dawson speed control and synchronisation system, resulting in the removal of the very sophisticated (and expensive to maintain) hydraulic speed control system • Replaced the shaft-driven oil pump • Overhauled the inlet emergency stop valve and replaced (the rather expensive) inlet stainless-steel strainer • Replaced all the steam inlet valve components including the five valves and seats “As a result of all the improvements done over the past five years, the 2015 overhaul will be at a much reduced cost. A ‘normal’ major service for a 3MW turbine would be R3.2 to R3.6m, but we estimated a cost of R1.7m (which included some unforeseen repairs) and will probably spend ± R1.0m.”

Carl says that during the next 10 years, he anticipates the following: • The electronic speed control interfaces with the hydraulic governor control and is extremely sensitive; thus, over the next three years we need to convert to full electronic control for accurate, reliable control of the turbine.

• On the inner edges of the 11 stators, there is erosion due to normal wear and tear over the past 37 years.

We need to machine and install inserts between 2018 and 2020 (cost

The Turbine 1 project team are, from left, Robbie Taylor, Mechanical Superintendent; Patrick Dladla, Operations Assistant; Louie Pillay, Utilities Manager; Riolyn Moodley, Utilities Controller; Judy Somers, Electrical Superintendent; Logan Govender, Utilities Controller; Carl Freyer, Engineering Manager; and Shon Roopnarain, Instrument Superintendent.

The overhauling and re-commissioning of the Siemens 2800kV steam turbo alternator, known as Turbine 1, will commence later this year. This will allow NCP Alcohols to become an independent power generation facility and the company will supply excess power to the local authority.

Explains Louie Pillay, Utilities Manager, “Electrical power at NCP Alcohols is presently generated by a Siemens 3000kV steam turbo alternator known as Turbine 2, and should any downtime occur, power from Ethekwini Electricity is used as back-up.

“However, as things stand, if Turbine 2 were to suffer extended downtime, we would incur significant electricity costs from Ethekwini Electricity. In addition, we would not then have any back-up, and we would be exposed to the vagaries of the municipal supply.”

Turbine 1 will thus be used as our back-up supply to Turbine 2 or vice versa, and the city’s power will be treated as a standby in the very unlikely case that both turbines fail at the same time.

The overhaul of Turbine 1 will be done by local turbine specialists.

On the cover

On the way ... During a recent visit to India, Rodgers Niranjan, Procurement Manager, Hartmut Nowak, Consultant, and Franck Maubert, Exports Manager, visited one of our Indian partners’ distilleries where they were invited to open the ribbon-cutting ceremony at the opening of the distillery’s semi-automatic drum-filling line. The ceremony was rich in traditional Indian culture and involved extravagant turbans, coconuts (for prosperity) and sweets. ± R0.75m). Once eroded past a certain point insets are not an option and all stators complete with blades have to be replaced. Cost ± R3.4m) • Should we be able to postpone to 2019 or 2020 and coincide with the next major service and rotor

balancing, total cost will be R3.5 to R5.5m.

• The turbine blades are still in good condition, though from 2022 to 2025 we will need to budget for blade replacement of about R5.0m in today’s money.

Be safe, not sorry

3

Watchdog to protect personal information While many may not know about this pending legislation, the Protection of Personal Information Act (POPI) will let consumers rest a little easier at a time when cyber leaks, spam mail and hacking threats occur.

The Act signed into law 18 months ago aims to safeguard South Africans’ personal information from misuse by other parties. It will radically change the way in which both government and business deal with individuals’ private content.

Companies or direct marketers breaching the privacy law could face a fine of up to R10-million or a decade in jail.

Organisations could also suffer the nightmare of reputational damage if their customers’ information is leaked. The compliance start date is expected to be published this year.

Privacy power It will truly be a two-way street for consumers in two big ways.

Firstly, organisations will now need an individual’s explicit consent to market their products or services to that person.

Without it, they will not be allowed to contact that individual.

If a direct marketer received a list of people’s contact details from a company that collects and sells marketing information, the data vendor would itself have infringed POPI. Secondly, marketers will only be allowed to use their direct customers’ information. What this means is that an organisation can only capture, use and store personal information after getting clear permission.

Anything that can be used to identify an individual in any way, like names, an ID number and address, or even religious affiliation, sexual orientation, medical history or educational and financial history will essentially be that person’s ‘business’ to share or not to share.

Security measures Companies asking for information will be responsible for ensuring that it is kept safe and updated. Financial institutions will be required to consistently check that these details are up to date to, for instance, ensure statements are always sent to their client’s correct address.

They also have to take reasonable security measures to secure that data from the moment it has been captured. When the information is no longer needed, it has to be destroyed.

Exceptions to the rule All public and private organisations will be required to protect personal information, except certain groups such as journalists using the information in the public’s interest; also artists and writers, judges and state bodies involved in crime prevention.

Tips to the everyday consumer Never dump personal documents or old office records without first shredding them or cutting them up.

Employees must be vigilant in protecting their employer’s information as well as their own. Experts have also advised people not to fill out any forms with personal information from strangers in shopping centres and on the street.

4

Safety first, to last

Those involved in audit preparations were, from left, Kelvin Timm, SHEQ Safety Officer; Bala Padayachee, Quality Technician; Lorraine Mudaly, SHEQ Manager; Jacqueline Chetty, In-service Trainee; and Ace Govender, QAQC Laboratory Manager.

Integrated audit success

NCP Alcohols Integrated Management System has been established, designed and maintained to improve the business – it is not just a set of procedures. Some of the benefits that the integrated management system has offered NCPA include ongoing assessment and improvement of the business systems and processes, marketing opportunities, fewer returned products and complaints, and improved quality and service to our customers.

2015 saw the first integrated audit of our ISO 9001 and HACCP systems by the SABS. The benefit that the integrated audits bring to NCP Alcohols is that of time and cost.

With only two minor non-conformances raised from the recent integrated audit, it’s safe to say that the integrated management system has matured significantly and has undoubtedly been well maintained!

Waste reduction focus As part of NCP Alcohols ongoing environmental objectives to progress towards greener production, we’ve approached the National Cleaner Production Centre of South Africa (NCPCSA) to provide guidance towards achieving sustainable waste reduction strategies.

The key objective for 2015 is to conduct a site waste assessment to understand NCPA’s waste generation profile and identify opportunities for improvement.

The NCPC-SA is a national programme supported by the government and promotes the implementation of resource efficiency and cleaner production (RECP) methodologies to assist companies to lower costs through reduced energy, water and materials usage and waste management.

The programme is hosted by the CSIR on behalf of the Department of Trade and Industry with the intention of enhancing manufacturing industry competitiveness through the mechanism of renewable energy, water, materials, energy efficiency and waste management.

Thank you NCPA, for these 40 years – Raj Mothi NCP Alcohols recently received a long letter of thanks from Raj Mothi, who has just completed 40 years with the company.

Below is a shortened version of the letter.

A very big ‘Thank You’ to NCP Alcohols and its staff for grooming a 20-year-old boy into a 60-year-old granddad.

On 18 March 1975 I started as a labourer in the Alcohol Department. At that time we had Resin, Polymers, Mining and Solvents departments on site. Total staff on site was 600.

Working in Packing and Mixing I grew myself to supervisor level but could not get the position because the job was for whites only. My wage was R27.00 per week.

On 11 October 1977 I got my code 11 drivers licence which is equivalent to code 14. At weekends, I helped my friends drive their trucks at night until I had very good knowledge of driving trucks.

Then HR sent me for a week’s driver training – I came second in the class. Eventually, the chief instructor came and tested me on reversing at NCP in front of Mr Naidoo. I passed one shot and started on 27 December 1982 as a Driver.

I then became the Costing and Planning clerk for Transport and achieved a transport diploma studying through RAU, and the CITSA diploma.

Then transport was outscourced. As Transport Coordinator, I tried out several suppliers including Imperial, Freightpak, Tanker Services and United Bulk. I managed to get the rate for a truck to Cape Town down from R45 000 to R26 000.

Whilst I was taking care of Security we were using a breathalyser on all staff; the plastic piece that one blows into, that fitted on to machine, cost us 75 cents a piece and we used about 300 a day.

Once when I was stopped at a road block and the police came to my car, I noticed they were using a better type of breathalyser.

I suggested this type to Mr van der Westhuizen as it would save us money, and it was introduced at NCP Alcohols.

Tanker Services used to deliver to Lusaka for us, and on return collected product from Triangle, but I thought the road taxes on the return loads were being duplicated. I took up this up in meetings with Tanker Services and they insisted it was correctly charged.

Eventually, our Procurement Manager took this up and R1 million was refunded.

I then landed in hospital with chest pains. But I have passed all these hurdles and I hope with God’s grace and your help that I will go through the next few years without any hitches.

To all new staff: if you want to grow, work hard and excel in what you do; you will reach your goals. Again a very big Thank You in guiding and helping me to complete 40 years with you.

Site personnel monitor the lift as the new buffer tank is installed.

New buffer tank for effluent spikes A large new buffer tank has been installed on site to capture and treat high-sulphate effluent streams. The tank will smooth out sulphate spikes in the effluent, reduce overall concentration by 25%, and keep the factory compliant with the ever-tighter municipal requirements.

The 110 m3 tank was lifted into place on 24 March, and will be operational by the end of April.

Explains Project Engineer Stephen Kitching, “Our first step was actually to reduce the rinse volumes in the clean-in-place (CIP) process for our evaporators.

“The problem was we were sometimes getting unacceptably high spikes in the quantity of sulphates in our effluent streams.

Hence the new buffer tank, which was made in Durban. Our main effluent streams will go to the tank; some of the liquids will neutralise each other, and we will do the rest using lime. Of course, settling and precipitation occur, and the sludge which forms in the cone at the bottom of the tank will be removed as solid waste. Our on-spec effluent is then pumped into a municipal pipeline which ends up in South Durban, where it is further treated and pumped out to sea.”

The new tank will also help NCP Alcohols meet the recent new specifications on sulphites, and it opens the way for further experimentation on site to improve the treatment of our effluent.

The project cost was R1,8 million.

Wipe out waste

5

Wellness drive

Employees were able to find out how healthy they are at the NCP Alcohols Wellness Day presented by Discovery Health on 22 April 2015. The annual Wellness Day helps employees to know their health status and identify any changes they need to make to become healthier.

Confidential HIV/Aids counselling and testing was also offered to anyone on site.

Valued customers pay us a visit

Finance Department’s Vigna Naidoo and Mark Norton-Amor support the company’s paperless drive.

Approaching PAPERLESS Paper was great for our grandfathers and even our fathers, but we live in a digital world. A paperless office is created by converting documents and other papers into digital form.

Going paperless saves money, boosts productivity, saves space, makes documentation and information sharing easier, keeps personal information more secure, and helps the environment. Going paperless is not getting rid of all paper but rather it aims at the realistic goal of reducing the amount of paper necessary, and reducing how often paper is handled.

Long-standing ties were reaffirmed during a visit to NCP Alcohols by Artemi of the Canary Islands. Seen in the picture before taking a tour on the plant are: Arthur Ndaba, Process Technician; Peter Starling, MD, NCP Alcohols; Mr Rafael Mendez Martin, Director of Artemi and Mr Jose Luis Morales, Production Manager; with Franck Maubert, Export Manager, NCP Alcohols.

Be a self-starter, get ahead “One should always aspire to become more and excel at the workplace. One sure-fire way of doing that is through studying and training. Not only will it put more accomplishments under your belt, but it will also reignite your passion for your career and make you more confident in your field,” says Lumeshni Govender, Process Technician and former in-service trainee student at NCP Alcohols.

Lumeshni is passionate about further education and says that employees that have not taken advantage of the opportunity to further their studies in a field relevant to what their jobs at the company entail, should do the following; # 1 Take charge of your career and be a self-starter. # 2 Find a course you are interested in relevant to your job

6

Safety by choice, not chance

function and do your research. Is it accredited? What is the duration and cost? # 3 Download and complete an ‘Application for Study Assistance’ from the company’s intranet and discuss with your manager or HoD. It’s that simple! And don’t forget to be responsible, attend lectures, study and pass!

Lumeshni studied for her BTech: Chemical Engineering degree and Specialist Project Management through NCP Alcohols. “Initially I was a bit scared at the prospect of working and studying at the same time, but it turned out that I enjoyed it A WHOLE LOT MORE that when I was just studying on campus. This is because I was getting the practical experience to reinforce my studying and I was able to immediately apply the concepts learned to my job.”

I hope you’re now more inspired and encouraged to study, Good luck!’

l l a r o f n o i t a r i Adm

Passing on the opportunity are tutors Denton Marimutho, Ivanya Gengan and Neloshen Naidoo.

NCP Alcohols is right behind an initiative which is being driven by three in-service trainees who give science and maths lessons to Grade 11 and 12 learners from the neighbouring Sea Cow Lake Secondary School.

Explained Ace Govender, QAQC Laboratory Manager, whom the group have dubbed ‘Mr Science’, “We all know there is a crying need for more science and maths skills in this country, and so we are delighted to be able to facilitate this wonderful effort by the in-service trainees. I have nothing but admiration for both the learners, who have to walk quite a long way to get to NCP Alcohols for their weekly class, and also for their ‘tutors’.”

The tutors are Ivanya Gengan, Denton Marimutho and Neloshen Naidoo. Ivanya said the tutors wanted to make the learners’ dreams come true.

“Most of them are under-privileged, and when they reached out, we realised that we could help them have a fair chance to a better future. We ourselves have been given an opportunity by NCP Alcohols, so we are delighted to be able to give these learners an opportunity too.”

The learners spend about two hours, once a week in a classroom situation at our training room; they are focusing on science for the moment and preparing for their science exam. Before each session they are given lunch and a drink.

In due course they will start doing maths.

We now store more CMS

Going up ... a group of learners from Sea Cow Lake Secondary School, seen here with their teacher, Nash Bagandeen, front, NCP Alcohols’ Ace Govender and Lumeshni Govender, and their tutors, on their way up to the training room for extra maths and science lessons.

Molasses storage tank No. 4 has recently been converted into a storage facility for CMS (concentrated molasses solids) to enable NCP Alcohols to store more CMS and take advantage of market conditions.

Explains Carl Freyer, Engineering Manager, “In the old days, we used to pay a contractor to take our CMS away. Now, we sell it on for use in both the fertiliser and animal feed industries.

“The conversion involved altering some pipework, and thickness-testing of the walls and base of the tank. We now have four tanks that can store our CMS which is really a by-product of the molasses we buy.”

Safety is MY responsibility

7

Happy 14th Birthday NCP Alcohols

Self-training now

SEE some of the BIRTHDAY WISHES ....

SIPHOKAZI MAJOZI Happy Birthday NCP Alcohols. It has certainly been 14 years of doing things better and differently. We are looking for ward to many more years of a successful business.

NOORIE BOBAT Happy birthday NCP!! I’m so humbled to be a part of this extraordinary journey … Keep going from strength to strength.

CARL FREYER Congratulations to NCP on 14 years of continuous growth and improvement! Let’s continue on this path through teamwork and innovation.

LINDELWA ZUNGU Feliz Aniversário NCP Alcohols!

Proudly green & gold Shelly Higgo, above, daughter of Engineering Manager Carl Freyer, was part of the SA Indoor Hockey ladies team which qualified in Namibia to represent the African continent at the 2015 Indoor Hockey World Cup in Germany.

The team of 12 had trained together since February 2014 and with Spar as their main sponsor, they were fortunate enough to travel to Canada in December 2014 to play in an international Four Nations tournament as a warm-up.

At the World Cup, they did well, narrowly losing to Czech in the pool round and later beating Belgium and Canada to finish 9th overall. The girls can be proud of a top 10 finish and have definitely learned a thing or two from some experienced and professional European teams!

8

Stop, think, recycle

A new on-site Microsoft Suite training portal was built into SharePoint to make self-training easier. The portal’s step-bystep learning is a combination of video and written guides, with the option for users to request more help from NCP Alcohols’ own IT application experts. According to IT Engineer Ricardo Peters, seen here with Receptionist Sue Stewart, the company will benefit from this because it will assist in creating a more skilled workforce whilst saving time and money.

Cheerio, Pat

Pat Ewing, seen here with Gary Bregovits.

We said goodbye recently to Pat Ewing, Operations Secretary, who retired after more than 30 years with the company on 31 March.

“I have loved working at NCP Alcohols,” says Pat. “We are in an interesting industry, and things are always changing. Of course, when I started here – fresh out from the UK – there were more than 400 staff, but now because of automation, new technology and for example moving from coal-firing to gasfiring, we are down to about 100. Back then, we were a large family, now we are a smaller family – the main thing is, we are like a family here. I figured out recently Peter Starling is the seventh MD since I started here; I wish him and the company great success.”

Pat has a long ‘bucket list’ which includes renovating her home, followed by either a train trip on the Trans Siberia Express or a ship cruise in the fjords of Scandinavia.