DATE: 28/04/06 CARTON CONVERTING PLANT 4 external boxes with 3x15m 2” hoses and 3”>2” fittings. 3. Further measures will be contemplated depending on results. 4. Purchase 2x

DAN ARBEL RISK ENGINEERING Ltd., 27 Al. Schweizer, Haifa, ISRAEL 34995

Email: [email protected] Tel. 972-4-8243337, Fax. 972-4-8243278

Plastic Plant U/W information Pg. 1 of 18 Re: Carton-Convt-090406 D: 28/04/06

DATE: 28/04/06 Ref: Carton-Convt-090406

CCAARRTTOONN CCOONNVVEERRTTIINNGG PPLLAANNTT

I. REPORT DETAILS

INSURED : Carton Converting Plant

DATE : Visits: 12-03-06, 29-03-06, 17-04-06.

SCOPE : Property Damage and Business Interruption Fire Survey.

REFERENTS :

II. MAIN BUSINESS HIGHLIGHTS

Business : Design and Production of Carton Packages and printing thereof.

Premises :

History: :

Operation Regime : 3 shifts, 5 days a week. Work at weekend is exceptional.

Employees : 200: 130 employees in 1st Shift, 40 in 2nd , 30 in 3rd shift. There are 6 maintenance workers.

Turnover (2005) :

Gross Profits :

MFL Fire, MD/BI : PD-75% , BI-100%

NEL Fire, MD/BI : PD-15% , BI-15%




III. SUMS INSURED

Coverage : All Risks & Machinery Breakdown

Property : “Buildings and Equipment” US $ 23,200,000

Stocks : Stock US $ 2,200,000

Gross Profits : Indemnity Period- 12 months. US 4,900,000 $

Wages : 100% -8 Weeks, 50%-Rest, or

100%- 28 weeks. US $ 1,800,000

Suppliers/

Customers Extensions

: Full extension for AIPM group

Unilever 35% (Customer)

Meadwestvaco- 35% on T/O (Supplier)

Deductible : PD-$10,000, BI- first 7 working days.

IV. SUMMARY

This Survey is in respect of the “Plastic Plant”

NOTE: We had very good cooperation throughout this survey.

Well protected one risk area.

Layout: This is basically one building block comprising of several adjoining buildings.

Buildings: from west to east: Raw Materials Building, Production Building, High rack-storage building. The office building is closed to this block at the north-west side.

The total area: Site area: 20,000 m2, Total Buildings Floor Area: 7,046 m2.

The Construction is non-combustible, but is fire-resistant. There are no insulated panels.

Separation: The production building is separated from the storage buildings on both sides with fire partitions that are not MFL walls. The openings are protected by fire rated shutters.

Fire Loads: Ordinary in the production hall, heavy in the storage areas. Basically, carton based commodity. There are small quantities of flammable liquids.




SUMMARY (Cont-ed),

Fire Protection: Automatic sprinklers are installed throughout the premises as per NFPA-13 approved by the authorized lab. Except for the Public water Supply, the plant has its own supply incorporating a water reservoir and an approved diesel fire pump. Systems installed in 1997 are compatible with current standards.

Maintenance of Fire Protection systems: The water based and the detection systems are inspected semi-annually by an approved contractor.

Potential Loss 1: NLE or PML – PD-15% of sums insured. BI – 15% of Sums Insured.

MFL: – PD-75% of sums insured. BI – 100% of Sums Insured.

Expansion Plan: There is a plan to extend the production building to the north to accommodate equipment transferred from Migdal Ha’Emek. A new raw material storage will be constructed on the east side next to the finished goods high building. In the existing raw material building, a new gallery will be constructed for the storage of dies and printing plates. The building’s floor will be used for finished goods storage.

V. RECOMMENDATIONS

No. Location Condition Improvement Time

1. Hazardous Materials Room

Exposes finished goods in delivery shed and Elec cables feeding production.

1. Install containment arrangement.

2. Convert Sprinkler to Deluge AR-AFFF.

3. Install a metal plate below cable trays and sprinklers below, 2.0 on center.

4. Install steel plates to protect the cables from adjacent storage.

5. Remove the bulk of the materials to a remote safety container.

6 months

2. Electrical rooms

Outside storage of idle pallets next to the southern side of the electrical room.

1. Best to remove this storage from this location.

2. Or, install barriers to protect electrical room.

3. Install sprinklers within generator room.

4. Seal Cable tunnels and penetrations.

3- 9 months.

1 PML is the maximum expected loss, expressed as a percentage of the building's value, when critical

protection systems are functioning as expected.

Normal Loss Expectancy: The Normal Loss Expectancy (NLE) is an estimate of the largest loss – excluding a catastrophe loss – which is to be expected at a given site, assuming that all available protective systems and measures function properly.

The Maximum Foreseeable Loss (MFL) is an estimate of the largest fire loss likely to occur if a key loss-reduction system fails.




RECOMMENDATIONS (Cont-ed),


3. Fire Doors Operated by fusible links and often

obstructed2.

1. Create obstruction free zone by installing alarms.

2. Upgrade by the addition of a device that will initiate closure by order from the FACP.

12 months

4. Fire Pump There is a performance deterioration of 7% to 10%

Reservoir and Pump suction basket were cleaned recently. It is necessary to check the impellers and housing.

12 months

5. Water Reservoir

Level too low Raise level to 20 cm below overflow 1 month

6. Yard Hydrants

Service Supply too Small (3”).

1. Test External Hydrants and Internal to determine Capacity inside and outside the premises to determine loss of capacity due to small service line.

2. Install 4 external boxes with 3x15m 2” hoses and 3”>2” fittings.

3. Further measures will be contemplated depending on results.

4. Purchase 2x Jet/Fog nozzles to be used with the high pressure hydrants.

5. All hydrants must be accessible.

2 months.

7. Sprinkler Valves

Securing valves Apparently, there are “unaccounted for” valves. They should be chained.

8. Smoke Removal

Production and Raw Material systems

1. Beam detectors initiation in the raw material hall should trip the fans.

2. Manual operation (overriding) by push buttons, separately for each hall.

1 month.

9. Computer Room

Disconnected Sprinkler

Reconnect sprinkler (replace head with a Concealed fast response version. Gas Extinguishing system is insufficient and unreliable. It should be upgraded as per NFPA-2001.

2 months.

10. Electrical room

Storage at Electrical Boards room

Electrical rooms should be free of storage. 6 months.

11. Waste Cartons

Closed Conveyor just outside the production hall.

Install sprinklers inside the conveyor, concealed sprinklers on 2m center are advised.

6 months

2 In some openings the conveyors were installed without regard for the required emergency separation. Fire

Shutters will thus not achieve full closure.




SUMMARY (Cont-ed),


12. Charging Batteries

Loading and unloading Hall

No charging should be allowed in this area. Immediate

13. Training Significance of Alarms.

1. Definitions in FACP should be checked by both Detection and Sprinkler Contactors.

2. Train plant personnel regarding the significance of various alarms.

3. Install clear signs near sprinkler risers

6 months.

VI. RISK DESCRIPTION

1. Construction: Unprotected steel frame walls and roofs, steel panels covering. There are walls sections with fire resistant construction (C.B.)., particularly between the main halls. Roof insulation and wall insulation where applicable, is made of vinyl faced mineral bats.

2. Separation: The office building is spaced several meters from the raw material building. Fire Resistant partitions separate between the raw material, the production and the high storage buildings.

Different height of adjacent building allows exposure above partition. The production building, 10 m high is between the raw materials 12-13m high on the west side and 21 m high rack storage building on the east side. The walls above the partition are of sheet metal.

Openings in the Partitions: There is one opening between and raw materials and the production building and several openings between the production and the high rack storage buildings.

Fire Doors: The openings are protected by UL listed 3 hours rated fire shutters. Operation is initiated by melted linkages and not by any detection system.

3. Stocks:

a. Raw Materials: Single and double face carton boards and duplex papers in rolls, 200-350 gr/m2.

b. The finished goods: Printed cartoned products as well as built up presentation

c. Packaging Materials: The products, carton made are packed in carton boxes and stored on pallets.

d. Encapsulation: On sides of products (top and bottom not included)

e. Pallets: 4 ways wood pallets.




RISK DESCRIPTION (Cont-ed).,

4. Main Equipment:

a. Bobst Sheet-fed flat-bed die-cutting & embossing: Models 1420, 102, 142.

b. Ronald Offset Printing lines: 6 colors R-806 & 4 Colors R-804, Ultra RZU-6,

c. Heidelberg 6 colors SM-74-6-2P+L, Heidelberg Sorm,

d. Carton Cutters and Sheeter.

e. Diana, Anter and Bobst Baby folding and gluing Machines,

f. Die Machines.

g. Sample Maker,

5. Technical Services:

Electricity: High Voltage supply, 2x 1000KVA dry type transformers. Peak consumption – 1000 KW. Main demand – AC system. Transformers of this type may be replaced within 24 hours.

Emergency Generator: 300 Ampere for emergency lighting, smoke venting.

Air Compressors: Located in the third level of built up construction within the outline of the raw materials building: 40, 30, 20 Hp compressors of various types.

Air Conditioning: Based on 2 Trane Chillers, total capacity – 200TR. Each chiller is equipped with 2 Compressors.

6. Hazardous Materials:

No. Material Total Quantity Production Hall

NFPA Class

Remarks

1 IPA – Iso-Propyl-Alcohol

600 liters in 3 barrels

1 barrel 1C In impounding plastic container

2. Glue with Vinyl Acetate

4x1000 liters Plastic Containers

3. Rotowash 60-1482

Up to 3 barrels 1 barrel Class III, F.P.>600C

4. UV Lacquer 2x 1000 liters, Plastic Containers

No available info.

5. White Gasoline 18 liters containers, total up-to 750 liters

6. Diesel Oil 3,000 liters. In the Hazmat room 6. Various Wastes Up to 30,000 Held in the site

corner farthest than any building.




VII. FIRE HAZARDS

Fire Rated Partitions

The production building is located between the raw materials and the high rack storage buildings. The partitions are fire rated but only to the height of the production building that is lower. Hence, exposure from above is possible. The fire rated shutters are often obstructed and are initiated by fusible links or manually. The partitions could not be considered as MFL walls.

Combustible Materials:

This is a carton handling plant. Thus, accumulated stocked of raw materials and finished goods creates high fire load. Thus, high fire load exists in the raw material storage, the high rack storage building, the loading and unloading hall and in the delivery shed.

Raw Material Storage

Basically there are 2 types of storage that creates high fire load:

1) Heavy paper rolls on end up to 5 m high.

2) Wooden dies and aluminum (?) printing plates in racks.

Production Hall

The fire load in light to medium. There is no accumulation Material in process. There however 1000 liters plastic container located within impounding plastic container next to a printing machine. All other liquids are supposedly non-flammable but there are impounded as well.

Raw materials and Finished Goods Stg.

20 m high, 9 tiers rack storage accommodating 6 pallet loads across. Very high fire load with cartoned carton made finished good. There are 4 tiers of in-rack sprinklers. The pallets are wood made. Plastic pallets are not suitable.

Loading & unloading

Within the production building, the southern hall, next to the production hall, contains material before loading into the High Rack storage building or after unloading there from. About 4 m high of palletized storage.

Flammable Materials:

There are several barrels and containers including IPA and Acetone (NFPA-Class IB) stored in a Hazmat Room. The diesel oil tank is located in the same room.

The hazardous material room is located in sensitive area, right next to the delivery shed and to the electrical room. Thus, there is a mutual exposure here with direct exposure of the electrical cables racks. Although the areas are protected by sprinklers, the cables might be lost. There is also a possibility of overtaxing the sprinkler system in the delivery shed as the hazmat room drains into the finished goods area.

Idle Pallets: There is storage in the open next to the electrical room. Another storage site is in the yard next to the high rack storage.

Waste Materials

Stored in the north-east corner, far from any building, but may be exposed to vegetation beyond the site fence.




FIRE HAZARDS (Cont-ed).,

Fire Protection:

All the buildings are fully protected by automatic sprinklers that were approved by authorized lab and by the authorities. The systems would basically comply with the latest NFPA standards.

Fire detection system monitor the sprinkler system flow switches, valves, fire pump system, projected beam detectors in the raw material & production buildings.

Smoke removal systems backed up by emergency generator are installed in the production and raw materials buildings.

See details of fire protection system in Section VIII.

Egress: Egress arrangements should be inspected versus the local building regulations. There is clearly a lack of directional and exit signage.

Potential Losses

The worst probable loss is an uncontrolled fire (sprinklers operation failure) in the high rack storage that involving the production hall. PD - 75% and BI-100% of Sums-Insured.

NLE Loss potential

Either next to one of the Printing lines or in the high rack storage damaging the rack system or in the delivery shed involving flammable materials and electrical cables racks: PD - 15% and BI-15% of Sums-Insured.

VIII. FIRE FIGHTING ARRANGEMENT

Table 1 below outlines the fire protection arrangements,

Table 2 presents details about the sprinkler systems.

TABLE 1- FIRE PROTECTION ARRANGEMENTS

Fire Department Response time from a major station – 10 min.

Public Supply: 2 x3” public service supplying main loop and water reservoir separately.

Mains and Yard Hydrants:

4” loop supplying yard and indoors hydrants. There are 8x3” hydrants near the perimeter of the site. No fittings and hoses allow usage by the Plant’s emergency team. May be used only by the fire department. There are also external hydrants outside the premises.

Own Tanks: 400m3 concrete reservoir.




FIRE PROTECTION (Cont-ed).,

Diesel Pump Fairbanks Morse, Model 70007; 1500gpm @127psi, 150%@ 101psi, 1750 rpm

Tested by us at 29-March-2006:

1500gpm @118psi; 2250gpm @ 75psi; 1725 rpm;

There is 7% reduction at nominal, 10% at 150% flow.

The pump requires checking of impellers.

Max. Calculated Demand:

Raw Materials Storage: 1200 gpm @ 110 psi. calculated versus

Pump’s tested supply: 1250 gpm @ 128 psi.

Actual Safety Margin: 20 psi.

Area Covered with wet type sprinklers

All buildings. See details in Table 2 below.

Monitoring: System flow switches are wired to the FACP. In the Pump House, Pump in operation, Main Switch not in Automatic, Batteries Charging Problems, valves not fully open, Low Fuel and Low Tank Water level.

Fire Positions: 15 x 2” hydrants + 60x15m hoses + 15x ¾” x25 m Reels.

Portable Extinguishers

34 x 6Kg dry powder, 8 x 6k BCF, 10x5Kg CO2 and some smaller units.

Detection, general:

The FACP (Fire Alarm Control Panel) is Simplex model 4020, addressable. The FACP monitors the sprinkler systems, 7 beam detectors, 82 Ion detectors, 24 manual call points.

Spot type detectors are installed in electrical boards.

Large Spaces Smoke Detection

Production Hall: 3 Beam Detectors are also installed.

Raw Materials Hall: 4 Beam detectors are installed in the raw materials building with two roles:

(1) Normal role of detection in relatively high ceiling (13.5 m).

(2) Tripping roof ventilators to facilitate sprinkler activation.

Automatic Extinguishing

Installed in the main Electrical Boards with NAF-S3 gas. No automatic tripping is available. There is also such installation in the main computer room.

Smoke Removal: The raw material building and the production building are provided with smoke removal fans. The system capacity in the production hall is about 100,000 m3/h




FIRE PROTECTION (Cont-ed).,

Maintenance Sprinkler System:

Using NFPA-25 like forms, Orad-Lehavot carries out system inspection of the sprinklers and the pump house.

Periodic Inspection:

Maintenance of fire detection system

Afcon Ltd., the original installer, carries out inspections twice a year.

Last reported inspection – 06-09/10/05.

Inspection is carried out - 09-11/04/06

TABLE 2- AUTOMATIC SPRINKLER DETAILS

No. Description Area

(m2) Height (m)

Storage Height (m)

Sprinkler Information GPM/sqft x sqst

1. Production 2,090 8.5-10 Ceiling 6.0 m

N/R 0.3x2500

2. Loading and unloading & Maintenance halls

538 4 m 0.3x2500

3. Raw Materials Storage, heavy paper rolls, up to 5 m high

1,872 11.5-13.5 m

5 m Large Drop, 1410C Calc: 15x11.2 heads x 50psi

4. High Rack Storage 941 21.5 m 19 Ceiling: 0.30x2000, Racks: 2x6x30gpm In-Racks: 4 levels, each 2nd bay, staggered, 560 heads. K8 heads, 1000C in-ceiling K8 heads, 740C in-racks.

5. Various Rooms OH2. 6. Chemical Storage 2.5 m 1.5 m K8, 1410C 7. Delivery Shed 675 7 m 4.5 m Not available, part of the

raw materials building system.

8. Office Building, Ground Floor

1,032

Light Hazard

1st Floor 750 9. Electrical Rooms No sprinklers, Just detectors

and Aut. Extinguishing in Electrical Boards.

9. Pump Room K5.6; 740C heads.




IX. ELECTRICAL MAINTENANCE

1. Inspection of High Voltage System: maintenance was carried out on 20/04/2006 by Shneider Electric. The Main C.B., HV disconnect, protection relays and transformers were treated. There are couple of items that have to be attended to.

2. Thermographic Inspection: Last inpection was carried out on 03/05/05. 28 electrical boards were inspected. In 2 boards excessive temperatures were detected (70, 750C). These boards were taken care of by the Plant’s electrician.

X. SECURITY

The Security is largely based on round the clock attendance. A watchman employed by a security company mans the guardhouse during the day. After the first shift, the shift manager controls the gate. During the weekend there is an employee on duty in the premises.

The site is fenced, but it is easy to mount it.

There is no monitoring of the fence.

Encl. 1. Plant Layout with the new expansion plan. 2. Photos with explanations.




Management

Bldg.

Newly Planned Production Extension

Raw Material Storage planned to be converted to finished goods, Dies and Printing Plates Storage

Production Hall High Rack Storage

Newly Planned Raw Materials bldg.

Fire Pump House

Loading & unloading

Delivery Shed

Parking Area

Electrical Bldg

North




Electrical Bldg

Raw Material Storage planned to be converted to finished goods, Dies and Printing Plates Storage

Hazmat Room Delivery Shed

Management Bldg.




Production Hall

High Rack Storage

Newly Planned Raw Materials bldg.

Newly Planned Production Extension




New

ly Plan

ned

Raw

M

aterials bld

g. H

igh R

ack

Storage

Prod

uction

Hall




View from N.E: High Rack Stg. and production Hall

View from N: Production Hall

View from S.W: Electrical Building, Idle Pallets & Delivery Shed

Delivery Shed, Loading & Unloading and High Rack Stg in the background

Electrical Building, Idle Pallets

View from S.W: Electrical Building, Idle Pallets & Delivery Shed




View from S.W: Electrical Building, Idle Pallets & Delivery Shed. Exposure to Electrical cables, coupling between flammable liquids and combustible finished goods.




Storage in Electrical Room

Example of Gas Extinguishing

Opening between High Rack Storage and Loading & Unloading Hall Fire Shutter is obstructed

Opening between High Rack Storage and production Hall

Hazardous exposure from Charging in Loading and Unloading Hall.

Documents

DATE: 28/04/06 CARTON CONVERTING PLANT 4 external boxes with 3x15m 2” hoses and 3”>2” fittings. 3. Further measures will be contemplated depending on results. 4. Purchase 2x