1. PET Bottle Recycling Update & Impacts Felt from California Legislation

2. Presentation Outline State of the PET Bottle Recycling Industry Impacts From RPPCL and SB 332 Issues and Concerns

3. PET Bottle Recycling Flow Chart

4. 19951.95 Billion lbs 19962.2 Billion lbs 19972.55 Billion lbs 19983 Billion lbs 19993.25 Billion lbs U.S. PET Bottles Available for Recycling

5. 1995775 mmlbs 1996697 mmlbs 1997691 mmlbs 1998745 mmlbs 1999771 mmlbs U.S. Post Consumber PET Bottles Gross Pounds Purchased

6. Post Consumer Bottles Gross Weight Purchased (mmlbs) Market Segments 1997 580 111 691 66 646 A. Purchased by U.S. Reclaimers B. Purchased by Exporters C. Total U.S. Material Recycled (A+B) D. Post Consumer Bottles Imported E. Total Bottles Used by U.S. Reclaimers to Producer RPET (A+D) 1996 549 148 697 87 636 1998 656 89 745 101 757 1995 605 170 775 46 651 1999 588 183 771 60 648

7. U.S. PET Reclamation Capacity May 1, 2000 Operating Plants15848 mmlbs Shuttered 3 60 mmlbs Total900 mmlbs 7 Vertically Integrated

8. Vertically Integrated Reclaimers (Gross Weight - mmlbs) * 1997 1998 1999 Number of Plants 4 7 7 Capacity (lbs in)200 405 465 Lbs Consumed150 260 350 Lbs Consumed in Product100 197 288 Total U.S. Bottles Available691 745 767 % Consumed 22% 35% 46% * NAPCOR Estimates

9. RPET Clean Flake Production Summary 19951996199719981999 RPET Produced from U.S. Bottles469438486513457 RPET Produced from Imported Bottles 38 70 55 75 47 Total Post Consumer Production Available for U.S. End Use Products (A + B)507508541588504 RPET Clean Flake Equivalent Exported153134 92 75154 Total U.S. RPET Produced from U.S. Bottles + Exported Clean Flake Equivalent (A + D)622572578588611

10. RPET Product Categories Fiber Sheet & Film Strapping Engineered Resin Food & Beverage Bottles Non-Food Bottles Other Total U.S. Convertor RPET Consumption Source: NAPCOR RPET Used (Millions of Pounds) 19961997 19981999 292 320 415 417 69 71 89 68 66 58 67 80 24 26 30 26 24 41 52 68 71 53 47 50 1 1 7 9 547 570 707718

11. PET Price History Mixed Color Bales - High & Low Pricing

12. Impacts of California Laws on PET and The PET Bottle Recycling Industries

13. Impacts of SB 332 Neutered PRCC as a market mechanism – Closing of only California PET Reclaimer – Created Open/fluid bale specifications Increased access for exporters Created an unlevel playing field for different packaging materials

14. Impacts of RPPCL Not Much

15. Issues and Concerns

16. Issues and Concerns SB 332 Inconsistent message not all packaging materials being treated equally

17. Issues and Concerns SB 332 PET competivity disadvantaged vs other resins – One year processing fee reassessment vs three year “freebie” for other resins – Higher processing fee due to higher recycling rate

18. Recycling Infrastructure Concerns Evolving Bale Specification One Bale or Two? Certified Processor Capability

19. APR and NAPCOR Applauds the DOC Decision to Keep Separate Resin Streams

20. Issues and Concerns - RPPCL Enforcement Inconsistent Doesn’t Achieve Intended Purposes

21. Questions Comments Discussion