Laduma Q3 2011

3nd Quarter 2011

LADUMA Mechanical – rocking for charity

ELECTRICITY – We supply eThekwini – page 4-5 CUSTOMER is King ... page 6-7

ONE TEAM - ONE GOAL !

MESSAGE FROM THE MD As I write this message it’s pouring with rain, something it seems to have done with far greater regularity during this year than it has over the last five or so. Take a drive up the North Coast and you will note how green the cane fields are, a substantial improvement on last year. As a result the sugar cane crop is showing signs of recovery and the industry appears to have a more positive frame of mind regarding continued improvement into next season. NCP’s local molasses availability has increased by 46% in the 2011/12 season and is expected to improve further next season. While imports of molasses have allowed us to continue operating at capacity, the supply of local molasses is the preferred option.

As forecast, the tight global ethanol supply position has not improved; in fact the poor sugar crop in Brazil’s Centre South region has further reduced availability, and in line with this prices have continued to rise. This has placed pressure on the markets we serve who have suffered from continually increasing prices combined with limited availability. We are working hard to develop alternate supply sources and to simplify logistics related to distribution as the global limitations on availability of high-quality ethanol, while presenting us with attractive opportunities, are also creating significant stress in daily operations.

Our ongoing search for additional value-adding opportunities has been rewarded with the implementation of the first phase of supplying eThekwini Municipality with 0.4 MW of cogen power, utilising available excess generating capacity. Based on this success, we plan on further investment during 2012 with the intention to supply the Municipality with 2.6 MW of power on completion of the investment programme.

The potential for the development of biofuel blending in South Africa has been discussed for a number of years with

an official government policy being issued late 2007.

Relatively little progress has been made in realising this policy due to lack of the necessary legislation within which to implement the policy, so it is interesting to note that a draft mandatory biofuel blending document was issued by the Department of Energy for comment during September. While it is not our intention to apply for a licence as a biofuel manufacturer at the Umgeni plant, the establishment of future plants may yield opportunities for our involvement based on our experience and expertise as ethanol manufacturers and distributors.

With the AX ERP system in place and better access to data and information, one of the key focus areas for analysis and intervention will be the extremely high logistics costs related to supply of product to the rapidly growing African market. An initial assessment undertaken in conjunction with our primary transport provider has highlighted that logistics costs into Africa as a percentage of revenue are approximately double those for the remainder of our markets. The exercise has identified numerous areas in which we need to improve and realign this area of the value chain to reduce these costs.

As we increase our understanding and utilisation of our ERP system to maximise the benefit of its extremely powerful capabilities, we expect to highlight additional areas where improvement can be made.

IT keeps IO simple NCP has adopted a new preventative measures IT system, known to staff as Improvement Opportunities (IO), that provides simple and effective tools for reporting and investigating plant incidents, monitoring corrective actions and communicating learning across the company.

The new IO system, which forms part of the operations performance software system OpSUITE, was rolled out at NCP in February 2011 and provides a single point for capturing, reviewing and reporting on 76 varieties on non-conformances that can occur at the plant.

NCP’s manufacturing processes require

2

Front cover: “Rockin’ Robbie” Taylor as you have never seen him before ..... but still in aid of charity.

Peter Starling

strict conformance with government and industry regulated safety requirements and environmental management processes.

The new IO system will enable staff to report incidents and near misses around product quality, safety or environmental issues so that corrective actions can be taken to prevent the same problems in future.

The new IO system is userfriendly and will allow staff to schedule and monitor tasks and inspections, analyse production patterns and even conduct risk inspections relating to safety, health, environment and quality requirements.

Gopal Sooriah, Shift Manager, uses the new IO System to report incidents and near misses around product quality, safety or environmental issues so that corrective actions are taken to prevent the same problems in future. He is seen here with Lorraine Mudaly, SHEQ Manager, who has driven the development of the system.

Lucky is amped for his job Some might think that Lucky Ntuli was just lucky when he was selected from 60 applicants to train as an Apprentice Electrician at NCP in 2008.

The fact is that Lucky had already done electrical studies at Coastal KZN training college and had some practical experience. He believes this gave him an edge in his application.

But if you talk to Andreas Mazibuko, Acting Electrical Supervisor, who mentored Lucky during his apprenticeship, you will learn that Lucky has exactly the right attitude to his work: he is keen and wants to work, and he wants to work properly; he is not embarrassed to ask questions as he wants to understand everything.

Lucky Ntuli (right) and his former mentor, Andreas Mazibuko.

Or, perhaps we can look to Lucky’s mother who also named him Khulekani when he was born – it means ‘pray’.

Says Lucky, “I have always tried to remember to be patient, and to persevere. This is the secret, combined with a love of challenges. When I was at school I knew my future would be in

electricity, and I even worked for two years as a meter reader – but it wasn’t what I really wanted, and then this opportunity came up.”

Lucky passed his trade test earlier this year, and was appointed Electrician when the position became available.

Technical manuals compiled Four chemical engineering students from the University of KwaZulu-Natal recently spent a month on site compiling technical manuals for our various plants.

Said Arthur Ndaba, Process Technician, “The manuals serve as a starting point when one needs to know a particular plant.

They also serve as the primary source of information, whether generic or technical, and their purpose is to give a clear explanation for each plant.

“We employed the students as it was too big a job for regular staff to do in addition to our normal workloads.

“A large portion of the work involved collecting information from a range of sources and combining it in a neat, easyto-read and accessible way. We chose chemical engineering students as they have sufficient technical understanding for this kind of task.”

The manuals contain: • Background, including the chemistry, the theory behind the plant, and the main unit operation • Basic material and energy balances, generally done for the entire plant on a holistic scale; each unit operation has its separate mass and energy balance

• Utilities requirements • Process description, a basic flow diagram and how the particular plant is operated, including flow rates, temperatures, levels, pressures, etc • Detailed equipment lists; each item has a technical document attached to it.

3

Selling our excess VaVaVooma NCP Alcohols is the first company in Durban to have a contract to sell their excess electricity to the eThekwini Electricity Department. The project, known as COGEN (Co-Generation of Power) will operate under licence of the National Energy Regulator of South Africa (NERSA).

Selling excess electricity called for investing in sophisticated equipment to ensure that the protection systems and the quality of the power sold met with international standards.

To help achieve this, a Dawson Turbine Electronic Speed Control and Synchronisation System plus a Basler Automatic Voltage Regulator was installed.

According to Carl Freyer, Engineering Manager, monitoring vibrations and temperatures in the turbine is crucial and the newly installed B&K 6000 system does this continuously.

Laz Naidoo, Operations Controller

Joe Naidu, Utilities Manager

Robbie Taylor, Mechanical Superintendent

Carl Freyer, Engineering Manager

Rakesh Sookraj, Instrument Superintendent

4

Andreas Mazibuko, Electrician

An RWW 11 000V electronic circuit-breaker was installed and linked to the Dawson control system to ensure quality of synchronized power supply to eThekwini and to “isolate” NCP during external power failures to run uninterrupted by such an outage.

to eThekwini Municipality “This is a particularly rewarding project in which we invested a large amount of time and effort to make it happen and we anticipate earning enough from the electricity we sell to make the COGEN project worthwhile.

A big ‘thank you’ must go to all the staff and contractors who showed so much grit and innovation in making it happen.”

So, how does it work? NCP uses Sasol gas to generate steam in a high-pressure boiler. This high-pressure steam drives the turbine, which in turn drives a generator to produce electricity for our own use. The low-pressure steam at the exit of the turbine is then used as process steam in our distillery, making the whole process highly energy efficient.

By increasing the high-pressure steam and electricity generation to the rated capacity of the turbine we have enough excess power to sell to eThekwini electricity.

Zanele Mbokazi, Instrument Technician

Lucky Ntuli, Electrician

Ronnie Wobben, Instrument Technician

Judy Singh, Electrical Technician

Louie Pillay, Electrical Technician

Shon Roopnarain, Instrument Technician

5

Our customer service

May Khan

renaud bergonzoli In an effort to raise service levels to our esteemed international customers, our Customer Services Controllers have re-allocated the Key Markets / Customers we export to. This has allowed them to spread the workload more evenly – and thus improving Customer Service Levels.

Customer Service is the provision of services to customers before, during and after a purchase. Indeed, our Customer Services Controllers handle the full customer journey from issuance of pro forma to export documentation to ensuring customer orders are dispatched on time and in accordance with customer expectations.

Says Renaud Bergonzoli, Exports Manager, “It can’t be stressed enough that Customer Service is an integral part of our jobs and should not be seen as an extension of them. Our company’s most vital asset is our customers. Without them, we would not and could not exist in business.

When we satisfy our customers, they not only help us grow by continuing to do business with us, but recommend us to the industry. Keep up the good work NCP Customer Services Controllers; you do us proud!”

The five people, above right and with colour-coded frames, service the countries shown with the matching colours.

6

ANGOLA MADAGASCAR NIGERIA PHILIPPINES RWANDA ERITREA BURKINA FASO

reaches global frontiers

Nivash Singh

PremiE Pillay

Romy Strydom

Lee-Ann ramlall

ISRAEL KENYA SRI LANKA

TANZANIA

AUSTRALIA

UGANDA

NEW ZEALAND

ZAMBIA

GHANA

TOGO

YEMEN

UAE

SIERRA LEONE

OMAN

SYRIA

THAILAND

INDIA

CAMEROUN

CANARY ISLANDS

MALAWI

BANGLADESH

DR CONGO

CHINA

BOTSWANA

ZIMBABWE

CONGO

IRELAND

MOZAMBIQUE

BURUNDI

7

Sgt Fortunate Moses, centre, in the garden at SAPS Greenwood Park with some members of the local community.

Feeding their families – thanks to SAPS NCP was able to assist the South African Police Services (SAPS) Greenwood Park police station, when they opened their gates to unemployed residents in the surrounding areas to use some of the station’s vacant land to grow vegetables for themselves.

Under the watchful eye of Sergeant Fortunate Moses, Head of the Victim Friendly Facility (VFF) at the station, these residents have already reaped enough crops to feed their families. NCP supplied the eager gardeners with all the gardening tools they needed and recently removed two truckloads of rubble – freeing up even more space for the gardeners.

The Greenwood Park Police Station is home to a Victim Friendly Facility (VFF), a joint effort by SAPS and the Community Policing Forum. At the VFF, victims of severe crime and assault are counselled and treated in a dignified manner, private and away from the main charge office. NCP is sponsoring the VFF’s logo, their marketing material and refreshments for the volunteers and victims. The new identity, once launched, will enable the VFF to roll out marketing and awareness strategies to the public and prospective business partners.

Worn

to be

SAPS Greenwood Park presented NCP Alcohols with this certificate recognising their outstanding contribution towards the community.

Wild

Friday, 2 September 2011 was Casual Day in South Africa, the theme: Worn to be Wild, and NCP staff had the opportunity to release their inner rock star to show their support for the rights of persons with disabilities. Underlying the fun is NCP’s commitment to the serious business of generating funds and creating awareness for persons with disability on the day. The Casual Day event organisers announced recently that a record amount of R18 million was raised through the campaign.

8