Sappi Ltd., the world’s biggest producer of dissolving wood pulp, promoted Chief Financial Officer Steve Binnie to chief executive officer to lead a strategy shift to higher-margin products.
“The board believes that Steve has all the necessary skills and attributes to take Sappi forward and to deliver strong growth into the future,” Sappi Chairman Danie Cronje said in a statement today. A new CFO will be appointed before the end of June, he said.
Binnie, 46, became chief financial officer of Sappi in September 2012, the Johannesburg-based company said. He was previously CFO at Edcon Holdings (Pty) Ltd., South Africa’s biggest clothing retailer, and a financial manager at Investec Bank Ltd. He will replace CEO Ralph Boettger, who is retiring due to ill health.
“I view Steve Binnie as a very competent individual,” Jean Pierre Verster, who helps to oversee the equivalent of more than $1.1 billion at 36ONE Asset Management in Johannesburg, said in an e-mail response to questions today. “The benefit of an internal appointment includes the positive aspect that the person can hit the ground running, since they already know the organization from the inside.”
Binnie will oversee the implementation of a new strategy at the world’s biggest maker of glossy paper, which is increasingly focused on cellulose products used in sportswear and luxury clothes and is moving away from less profitable paper. The company has plans to cut debt to $2 billion from $2.3 billion over the next 12 months with a view to resuming dividend payments.
“Investors would be pleased that the succession has been filled quickly by a person who is familiar with the group’s current strategy and has a good understanding of the financial implications and imperatives of the group,” Verster said.
Sappi said Feb. 5 its net income rose 50 percent to $18 million in the three months through December, helped by Europe, its main market, returning to operating profit. The business is expected to improve during the year, Boettger said on Feb. 5.
Sappi fell 2.6 percent to 33.60 rand at the market close in Johannesburg, trimming this year’s gain to 2.6 percent.