Paper Recycling Ladislav Veres Košice, October 18th 2012

Smurfit Kappa Group general information Paper Recycling – Agenda Smurfit Kappa Group general information Paper Recycling – Recovered Paper as a raw material Global Europe Slovakia Recovered Paper Quality Issues Increased Contamination Decreasing Fiber Quality Closing the Loop in Paper Industry

1. About Smurfit Kappa Group Smurfit Kappa Group is a world leader in paper-based packaging with operations in Europe and Latin America. Smurfit Kappa Group operates in 21 countries in Europe and is the European leader in containerboard, solidboard, corrugated and solidboard packaging and has a key position in several other packaging and paper market segments, including graphicboard and sack paper. Smurfit Kappa Group also has a growing base in Eastern Europe, a bag-in-box facility in Canada and operates in 9 countries in Latin America where it is the only pan regional operator. Employees (FTE) 38,000 Presence European countries 21 Latin American countries 9 Operating Facilities 331 including 1 BIB in Canada

Smurfit Kappa Group Profile Packaging Europe Sales Volumes (million tonnes) Kraftliner 1.4 Recycled Containerboard 2.9 Other Paper and Board 1.1 Corrugated 4.2 Solid Board Packaging 0.3 Latin America Sales Volumes (million tonnes) Containerboard 0.7 Other Paper and Board 0.4 Corrugated 0.7 Full Year 2011 Net Sales (€ billion) 7.4 Containerboard (million tonnes) 5.1 Corrugated Packaging (million tonnes) 5.0 (Full Year 2011 figures)

European Operations Virgin Mills 5 Recycled Containerboard Mills 13 Other Recycled Paper and Board Mills 8 Corrugated 162 Cartons and Solid Board Packaging 9 Recovered Fibre 16 + Joint-Venture depots 8 Other 47 (as at March 2012)

2. Paper Recycling: Recovered Paper as a raw material Global recovered paper consumption (2010): 222 million metric tons Source: RISI Outlook for Global Recovered Paper Markets (2012)

2. Paper Recycling: Recovered Paper as a raw material Historic and forecasted recovered paper consumption Source: RISI Outlook for Global Recovered Paper Markets (2012)

2. Paper Recycling: Recovered Paper as a raw material Recovered paper consumption per region Source: RISI Outlook for Global Recovered Paper Markets (2012)

2. Paper Recycling: Europe European recovered paper utilization and collection overview:

2. Paper Recycling: Europe Germany – Recovered paper collection & utilization development Germany Year RP Collection RP Utilization 1991 7.499 6.420 1992 7.915 6.742 1993 8.564 6.995 1994 9.689 8.160 1995 10.670 8.599 1996 10.912 8.888 1997 11.493 9.457 1998 12.164 9.917 1999 12.825 10.228 2000 13.573 10.992 2001 13.826 11.526 2002 13.696 12.038 2003 13.570 12.449 2004 14.312 13.219 2005 15.077 14.413 2006 15.479 15.254 2007 15.737 15.822 2008 15.600 15.493 2009 15.425 14.795 2010 15.388 16.273 2011 15.262 16.074 Sources: CEPI Annual Statistics 2011 CEPI Historic Statistics 1991-2010

2. Paper Recycling: Europe UK – Recovered paper collection & utilization development UK Year RP Collection RP Utilization 1991 3.088 2.954 1992 3.214 3.055 1993 3.406 3.294 1994 3.921 3.677 1995 4.023 3.997 1996 4.539 4.323 1997 5.005 4.618 1998 5.030 4.654 1999 5.135 4.753 2000 5.280 4.882 2001 5.552 4.612 2002 5.999 4.610 2003 6.386 4.542 2004 7.204 4.625 2005 7.754 4.543 2006 8.016 4.172 2007 8.616 4.047 2008 8.768 3.993 2009 8.158 3.820 2010 8.005 3.763 2011 8.036 3.758 Sources: CEPI Annual Statistics 2011 CEPI Historic Statistics 1991-2010

2. Paper Recycling: Europe European recovered paper utilization and collection development: Sources: CEPI Annual Statistics 2011 CEPI Historic Statistics 1991-2010

2. Paper Recycling: Slovakia Slovakian recovered paper utilization and collection development: Sources: CEPI Annual Statistics 2011 CEPI Historic Statistics 1991-2010

2. Paper Recycling: Slovakia Slovakian recovered paper utilization and collection development: Source: ZCPP statistics 2011

2. Paper Recycling: Slovakia

3. Recovered Paper Quality Issues: Increased Contamination Recovery rates in Europe and North America are already very high and are close to their economic limit: Source: McKinsey

3. Recovered Paper Quality Issues: Increased Contamination The first volumes to be collected are those who are easy to access, cheap and clean Sourcing additional volumes in regions with high recovery rates leads to inferior recovered paper Source: McKinsey

3. Recovered Paper Quality Issues: Increased Contamination Also of importance is how volumes are collected Co-mingled / single-stream collection is a reason for concern Via the waste frame directive Europe politically is against this type of collection Co-mingled collection is still used in several countries Also, there is a risk of increased use of co-mingled collection

3. Recovered Paper Quality Issues: Decreasing Fiber Quality Over the past two decades recovered fiber has replaced wood pulp as the dominant ingredient in paper and board production Source: RISI Outlook for Global Recovered Paper Markets (2012)

4. Smurfit Kappa Recycling: Closing The Loop Closing the loop in Smurfit Kappa Group

4. Smurfit Kappa Recycling: Closing The Loop

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