IMPROVE BARRIER PROPERTIES AND SIGNIFICANTLY REDUCE YOUR CARBON FOOTPRINT WITH IN-LINE METALLIZING AND TOP-COATING

OUTLINE Two Step vs. One Step Process Barrier Properties of Top-coated Metallized Films WVTR and OTR Reducing Carbon Footprint Energy Material Opportunities for Layer Elimination Summary Conclusions 2

TWO STEPS VS. ONE STEP PROCESS Two Step Process: Unwind the film under vacuum, metallize the film surface, rewind the film under vacuum, vent the chamber to atmosphere. Unwind the film in atmosphere, top-coat the metallized surface, rewind the film in atmosphere. One Step Process: Inline top-coating directly after metallizing 3

BARRIER PROPERTIES OF TOP-COATED METALLIZED FILMS 4

BARRIER PROPERTIES Water Vapour Transmission Rate (WVTR) 37.8°C and 90% RH (ASTM E-398 ) Oxygen Transmission Rate (OTR) 23°C and 50% RH (ASTM D-3985 ) Less scratches Better Barrier Fewer pinholes 5

WVTR VALUES Material Uncoated Coated OD Improvement (%) 70G OPP 0.006 0.002 3.50 66.7 Avg= 69.7% 0.011 0.003 72.7 SD= 4.3% 80G PLA 0.282 0.107 1.40 62.1 Avg= 63.1% 0.240 0.086 2.05 64.2 SD= 1.5% 150G PE 0.031 0.019 2.3 38.7 36G PET 0.081 0.027 2.40 48G PET 0.070 0.007 1.25 90.0 0.060 1.80 88.3 0.050 2.10 88.0 Avg= 85.3% 0.040 2.20 85.0 SD= 6.3% 0.005 2.30 87.5 3.20 Values in g/100in2/24h at 37.8°C and 90%RH 6

OTR VALUES Material Uncoated Coated OD Improvement (%) 70G OPP 1.480 0.273 3.50 81.6 Avg= 84.8% 2.600 0.310 88.1 SD= 4.6% 150G PE 9.645 0.745 2.30 92.3 36G PET* 0.046 0.016 2.40 65.2 48G PET 0.060 0.010 2.00 83.3 0.070 0.008 2.10 88.6 Avg= 85.1% 0.009 2.20 85.0 SD= 2.7% Values in cc/100in2/24h at 23°C and 50%RH *Value measured at 0% RH 7

WVTR vs. OPTICAL DENSITY 90% 86% 73% 8

BARRIER vs. OPTICAL DENSITY The top-coating shows the greatest improvement to barrier at lower optical densities, although it still improves with higher OD It is possible to significantly improve the barrier properties of the films by metallizing and coating in a single step and without having to work at optical densities greater than 2.0-2.3 9

REDUCING CARBON FOOTPRINT As we have spoken about in previous AIMCAL presentations, there is a growing trend among CPG’s to create carbon emission reduction targets and publicly track how they are doing in meeting these targets. In many cases, this is a new spin on the old philosophies of downgauging and layer elimination to save money on their packaging spend. Now the promise of reducing carbon footprint of their packaging is an added benefit that can be marketed to consumers. We believe that the one-pass metallizing & top-coating process as described by Veronica can help CPG’s to meet their dual goals of reducing total packaging spend, as well as reducing the carbon footprint of their products. 10

ONE STEP VS. TWO STEP PROCESSES First, we need to examine the one-step metallizing & top-coating process, and see how it compares to two-step metallizing & EB coating regarding: Energy consumption Material consumption Total carbon footprint Before looking at the impact on carbon footprint of the new potential flexible packaging structures that can be created based on these new barrier levels, we will first look at the impact of the process itself. In order to arrive at a carbon footprint for each process, we need to examine the energy and material consumption taking place in both processes. 11

ONE STEP VS. TWO STEP PROCESS - ENERGY We focus first on the energy consumption in each process. The energy footprint of the metallizing process itself has been measured quite accurately in the past at Celplast, using M&V submetering on the entire metallizing cell. The power consumption to produce a 60,000’ roll of metallized 48 g PET film is shown here to be approximately 660 kW-hr, with the measurement taken on a 60” wide Darly free span metallizer. If we assume an average finished width of 53”, this works out to an energy consumption level of 27 MJ/ream. If we assume this metallizer is being run in Ontario, Canada, the most recent available data from OPG shows that based on Ontario’s existing energy production mix of hydroelectric, natural gas, nuclear power and a tiny bit of coal, the carbon footprint is roughly 5.4 kg CO2 equivalent/ream. Taking data from actual EB production runs and manufacturer’s specs, we have estimated the energy consumption requirement to EB top-coat this material to be 33 MJ/ream. Again, if this EB coater were being run in Ontario, the carbon footprint is roughly 6.5 kg CO2 equivalent/ream. Therefore, the total footprint to combine these two processes is 11.9 kg CO2/ream. If we look at the one-step process, there is a slightly longer cycle time involved currently due to roll change-over and set-up relative to the other processes. However, considering the lower EB power levels required during this period, and the fact the film is only passing through one set of driven rollers, the power consumption is still much less than the other two processes combined. Hence, it has a roughly 30% lower carbon footprint based on the energy balance alone. 12

ONE STEP VS. TWO STEP PROCESS – MATERIAL We have carried over the energy-based carbon footprint from each process at the top of this chart. Now, we can look at the carbon footprint of the materials used in each case. These data come from earlier studies carried out by Franklin Associates and Rohm & Haas. They are based on cradle to plant gate data. We can see that even though we are assuming the exact same raw material carbon footprint in each case, there is less yield loss in the one-step process vs the two-step process. Combining this reduction with the energy reduction at the top of this table, carried over from the previous page, we can achieve a carbon footprint reduction of approximately 24%. Note that this study does not factor in the extra cost of shipping this roll of film from one plant to another to carry out the two different processes in the two-step process, but assumes these are carried out in the same plant. If we take into account the more likely scenario that the two converting operations are in two different locations, we could be looking at a total carbon footprint of 20 kg/ream or more, depending on the distances involved. This would lead to a reduction of 30% or greater moving from the two-pass to the single-pass process. 13

OPPORTUNITIES FOR LAYER ELIMINATION The superior barrier properties that can be achieved with the one-step metallizing & top-coating process allow us to look at eliminating different barrier layers from the process: Metallized PET Aluminum foil Metallized OPP It also allows us to look at eliminating additional plies of material, that are there primarily to protect the metallized layer The previous slides discussed how the carbon footprint of the process could be lowered by moving from a two-step metallizing & top-coating operation to a single step operation. However, an even greater benefit can be achieved if we are able to use the materials produced in the single step process to eliminate layers in the flexible packaging structure itself. As Veronica informed us in the first part of this presentation, superior barrier properties can be achieved with this one-step process. This leads to opportunities for layer elimination of typical barrier layers, such as mPET, foil and mOPP. Furthermore, it allows us to look at eliminating plastic layers that are primarily there to protect the metallized layer and allow the structure to retain its barrier properties. 14

OPPORTUNITIES FOR LAYER ELIMINATION Look at eliminating a layer in each of three different existing flexible packaging structures By examining layer elimination in each we will measure the reduction of each of the following: Amount of material used Converting energy Total carbon footprint of the finished structure We will look at three different examples of what is possible, and the carbon footprint reduction that can be achieved in each case. As with the process studies, we will look at material reduction and process energy reduction first, then calculate the total carbon footprint of each structure before and after the layer elimination exercise based on the total material & energy reductions. Please note these are all practical examples. We have active projects regarding all the structures we will be looking at here. 15

MATERIAL REDUCTION: DRY POWDER OR STICK PACK This is a typical high moisture barrier structure for dry powder pouches. In this example, we are replacing the foil, second adhesive layer and 1.5 mil sealant web with a metallized & top-coated 1.5 mil sealant web. Based on a mass calculation, we are eliminating approximately 25% of the overall weight of the package. 16

MATERIAL REDUCTION: FRAC PACK COFFEE In this example, we are replacing the metallized PET and the adhesive layer with a metallized & top-coated barrier layer. 17

MATERIAL REDUCTION: BAG-IN-BOX SNACK FOOD In this example, we are replacing the LDPE adhesive and both OPP webs with a metallized & top-coated 1.4 mil heat sealable OPP web. 18

CONVERTING OPERATIONS Processing Energy Usage (MJ/Ream) Processing CO2 Equivalent1 (Kg/Ream) Material CO2 Equivalent2 Solvent Based Print or Coat 203* 40.5 11.0 8.5lbs/ream LDPE (15um) 162* 32.3 45.5 Metallizing 27** 5.4 1.2 Metallize & top coat, one pass 43** 8.6 4.5 This table summarizes the carbon footprint generated by each process and material used for all of the converting operations in the structures previously outlined. Note the sources below for each data set in this table. *Life Cycle Inventories for Flexible Packaging Lamination, Rick DiMenna, Rohm & Haas. **Celplast calculations based on equipment manufacturer specifications and internal M & V studies. 1Ontario power carbon footprint of 0.5447 kg CO2 eq./MJ, How it Works: Electricity Generation, OPG, 2009. 2CRADLE-TO-GATE LIFE CYCLE INVENTORY OF NINE PLASTIC RESINS, Franklin Associates, 2008. Also Eco-profiles of the European Plastics Industry, Plastics Europe (2005), I. Boustead, ed. Includes yield losses. 19

CONVERTING ENERGY REDUCTION: DRY POWDER OR STICK PACK First we will compare each structure before and after layer elimination based on the energy reduction achieved. 20

CONVERTING ENERGY REDUCTION: FRAC PACK COFFEE 21

CONVERTING ENERGY REDUCTION: BAG-IN-BOX SNACK FOOD 22

CARBON FOOTPRINT REDUCTION: DRY POWDER OR STICK PACK Now we can combine the effects of material reduction and process energy reduction to get a true picture of the total carbon footprint reduction achieved through layer elimination in each structure. 23

CARBON FOOTPRINT REDUCTION: FRAC PACK COFFEE 24

CARBON FOOTPRINT REDUCTION: BAG-IN-BOX SNACK FOOD 25

SUMMARY: MATERIAL, ENERGY & CARBON FOOTPRINT REDUCTION This table summarizes the data from the previous ten slides, showing the % reduction that can be achieved using the new one-pass top-coated & metallized films in these structures instead of traditional laminations. 26

CONCLUSIONS One Step Process: Provides excellent barrier properties Reduces: Material and energy consumption Carbon footprint It opens the possibilities for new laminated and unlaminated structures to be introduced into the marketplace In conclusion, the one-step metallizing & top-coating process provides excellent barrier properties on a variety of substrates. This gives converters a new set of barrier films to work with to achieve the CPG’s goals of reduced cost and reduced carbon footprint in their flexible packaging structures. 27

E-mail: dante@celplast.com Veronica Ataya Office: 416-644-3512 Contact information: Dante Ferrari Office: 416-644-3507 Mobile: 416-918-8790 E-mail: dante@celplast.com Veronica Ataya Office: 416-644-3512 Mobile: 416-333-6792 E-mail: veronica@celplast.com Website: http://cmp.celplast.com Thank you! 28