Climate Change Data

Sephaku Holdings Limited

Climate Impact & Sustainability Data (2022-04 to 2023-03)

Reporting Period: 2022-04 to 2023-03

Environmental Metrics

ESG Focus Areas

  • Safety
  • Employee development
  • Environment
  • Supplier development
  • Decarbonisation
  • Community engagement
  • Broad-Based Black Economic Empowerment (BBBEE)

Environmental Achievements

  • Dust emissions maintained below the regulatory limit of 1200 mg/m² per day
  • Waste water recycled at all operations
  • SepCem's CO2 emissions between 0.72 and 0.77 tCO2e per tonne of clinker produced (below industry mean)
  • SepCem increased use of alternative fuels to reduce carbon footprint and input costs
  • SepCem halved nitrous oxide emissions to between 600 and 700 mg/Nm³

Social Achievements

  • Métier invested R0.4 million in training for 31% of workforce, 21% of whom are HDSAs
  • SepCem invested R3 million in training
  • SepCem spent R105 million with 22 black-owned community SMMEs
  • Métier maintained BBBEE level 4 accreditation
  • SepCem maintained BBBEE level 5 accreditation
  • Implementation of infrastructure and job creation projects to benefit communities in the North West Province in collaboration with the Ditsobotla Cement Manufacturers Forum (DCMF)

Governance Achievements

  • SepHold complies with the JSE Limited (JSE) Listings Requirements and the Companies Act of South Africa
  • BBBEE performances of Métier and SepCem were verified by South African National Accreditation System agencies
  • SepHold’s annual financial statements were independently audited by BDO South Africa Incorporated

Climate Goals & Targets

Long-term Goals:
  • Reduce carbon footprint through alternative fuel projects
Medium-term Goals:
  • Increase the use of alternative fuels for SepCem (target of 5.7% in CY 2023 and 8.4% in CY 2024)
  • Implement phase 1 of ISO14001 for SepCem
Short-term Goals:
  • Grow plant footprint in Western Cape for Métier
  • Maximise capital expenditure and implement tight cost control for Métier
  • Continue to reduce bank debt for Métier
  • Tightly manage customer credit risk for Métier
  • Convert residual project bank debt to a revolving facility with improved terms for SepCem
  • Maintain sales volumes for SepCem
  • Improve cost efficiencies for SepCem
  • Implement initiatives to improve risk management for SepCem

Environmental Challenges

  • Persistent challenges in the cement industry impacted the Group’s financial performance
  • Oversupply and declining demand in the cement and concrete industry
  • Stagnant economic growth, lack of public sector infrastructure investment, declining investor confidence
  • COVID-19 restrictions, flooding in KwaZulu-Natal, energy crisis
  • Global supply chain constraints, rising inflation, higher interest rates
  • Increased competition from new entrants and imports
  • Heightened social and community tension in communities adjacent to SepCem's Aganang plant
  • Shortage of technical skills
  • Concentrated investment portfolio
Mitigation Strategies
  • Reduced and restructured debt
  • Controlled costs, including executive remuneration
  • Implemented sales strategies to sustain or grow market share
  • Improved cost efficiencies
  • Focused on achieving optimal product mix
  • Secured alternative sources of lower cost coal
  • Introduced alternative fuel to reduce dependence on coal
  • Increased community engagement
  • Accelerated implementation of infrastructure and job creation projects
  • Obtained an interdict to prevent disruption from community protests
  • Targeted recruitment, talent retention, and internal skills training
  • Strengthened the operating entities’ balance sheets

Supply Chain Management

Responsible Procurement
  • Preferential procurement from local SMMEs
  • Enterprise and supplier development (ESD) plan

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IR Framework), King Report on Corporate Governance™ for South Africa, 2016 (King IV)

Third-party Assurance: BDO South Africa Incorporated