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RPC – THE ESSENTIAL INGREDIENT

© 2018 RPC Group Plc. All Rights Reserved.

01 February 2018

David Baker – RPC Group Industry Affairs Director

Plastics in the spotlightAn examination of current issues

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40 years in the packaging industry, 34 years in plastic packaging

27 years with RPC

Various senior Operational and Group roles

Chair of INCPEN (The Industry Council for research into Packaging and the Environment)

BPF (British Plastics Federation) Council member

RECOUP (RECycling Of Used Plastics) Board member

Chair of EuPC (European Plastic Converters) packaging group

Vice-President of EuPC (from June 2018)

Packaging Federation Board member

David Baker – RPC Group Industry Affairs Director

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Why do we use plastics?

Plastics are: Lightweight compared to traditional materials, reducing transport costs of packaged goods

Strong and durable – ideal for effective product protection

Versatile and can be moulded or formed into just about any shape – excellent marketing opportunities and transport efficiency

Low carbon – production process uses less energy and produces less carbon emissions than other materials

Recyclable – over 90% of plastic based products currently on the UK market are recyclable. Those non-recyclable products are where plastics are combined with other materials (e.g. foil laminates)

Saving food waste – plastic packaging of food extends the shelf life of both fresh and processed food. For example, a plastic wrapped cucumber has a shelf life of 14 days, compared to just 4 days for an unwrapped one

BUT some of plastics’ strengths become weaknesses if we do not take care Lightweight – they float in water and are highly visible in a marine environment

Strong and durable – they do not naturally break down

Although plastics are recyclable, they are not always recycled

The many benefits of plastics far outweigh their disadvantages. Post use plastic is a valuable resource in a circular economy

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The valuable contribution of plastics is widely recognised

“Plastic packaging not only delivers direct economic benefits, but can also contribute to increased levels of resource productivity — for instance, plastic packaging can reduce food waste by extending shelf life and can reduce fuel consumption for transportation by bringing packaging weight down.” (source: The New Plastics Economy – Ellen McArthur Foundation 2016)

“Plastic is an important and ubiquitous material in our economy and daily lives. It has multiple functions that help tackle a number of the challenges facing our society. Light and innovative materials in cars or planes save fuel and cut CO2 emissions. High-performance insulation materials help us save on energy bills. In packaging, plastics help ensure food safety and reduce food waste. Combined with 3D printing, bio-compatible plastic materials can save human lives by enabling medical innovation.” (source: A European Strategy for Plastics in a Circular Economy 2018)

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Plastics in the spotlight – what happened in the UK

19/11/2017: Blue Planet II (‘BP II’) airs. Includes section on marine litter

22/11/2017: The Budget speech. Mr Hammond references BP II

19/12/2017: Environmental Audit Commission (EAC) publishes its report “Plastic Bottles – Turning Back the Plastic Tide”

01/01/2018: China’s ban in importing mixed plastic waste hits the news

05/01/2018: EAC calls for a 25p “Latte tax” on all disposable coffee cups

11/01/2018: UK Government publishes 25 year Environment plan. • Announces elimination of all “avoidable plastics waste” by end of 2042• The removal of the de minimis on plastic bags • Supermarkets will be encouraged to have “plastic free aisles”

Subsequent announcements from various companies including pledges to:• make all their packaging recyclable• reduce the amount of plastic used • Increase the use of recycled materials

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Plastics in the spotlight - summary

The UK government focus appears to be on plastics in the ocean (marine litter)

Talk of “single-use” plastics but definition yet to be confirmed

All the output from government is about taxes/charges

No mention of “bans”

Media and NGO attention

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Plastics in the spotlight – marine litter

80% of the plastic found in the ocean is estimated to have come from land-based sources.

The remaining 20% is thought to be the result of water-related activities.Source: European Commission. Our Oceans, Seas and Coasts

Current research indicates that the largest source of leakage of plastic items into the oceans is from a small number ofAsian and Pacific Rim countries, which account for over 80% of ocean waste. These include China, Indonesia,Philippines, Vietnam, Sri Lanka, Thailand, Egypt, Malaysia, Nigeria and Bangladesh.Source: Jambeck et al. 'Plastic waste inputs from land into the ocean'. Marine Pollution

98% of the litter in our oceans emanates from countries outside Europe and the United States.Source: Ellen MacArthur Foundation, The New Plastics Economy: Rethinking the future of plastics

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Plastics in the spotlight – marine litter

Items found on beaches Items found underwaterTechnical Report by the Joint Research Centre (JRC), the European Commission’s science and knowledge service. Marine Beach Litter in Europe. 2016

Project Aware – Dive Against Debris. Annual Review 2016.

Nets + ropesPlastic caps and lidsCigarette buttsCrisp and sweet wrappersLolly sticksString and cord < 1 cm diameterCotton bud sticksPlastic drink bottlesPlastic food containers

Fishing linePlastic fragmentsFishing sinkers, lures, hooksPlastic food wrappersBeverage cans (aluminium)Beverage bottles (glass)Glass & ceramic fragmentsPlastic bags (grocery/retail)Plastic spoons, plates, forks, knives

Of the 18 items listed above, RPC Group manufactures just one – plastic caps and lidsFour of the listed items are not plastic

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Marine litter – micro plastics

Source: IUCN (International Union for Conservation of Nature)

There is a lot of press coverage about micro plastics (often referred to as “nurdles” or ”mermaids’ tears”). Less than 1% of micro plastics are plastic pellets from the plastics industry.

Micro fibres from textiles, ”marbles” from car tyres and city dust account for 87% of micro plastics in the ocean

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Plastics in the spotlight – DEFRA (Department for Environment, Food and Rural Affairs)

Industry roundtable discussion with Mr Gove on 01 December. Invitation letter references BP II

Mr Gove challenged industry on a range of issues and specifically asked: “What interventions do we need to have in order that people are incentivised to make the right choices; how can consumers play their part?”

Following the roundtable, DEFRA announced that it wants to work with INCPEN and WRAP as the “voice of the industry”

Individual company responses (including RPC’s) to the challenges were sent via these organisations

Industry response to Mr Gove is to reform the current PRN (Packaging Recovery Note) system to address his questions and as a timely and effective alternative to taxes

Feedback from DEFRA to date is that industry proposals have been positively received

Industry is now working on a more detailed proposal of PRN reform

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Current Packaging Waste Regulations and PRN

The Producer Responsibility Obligations (Packaging Waste) Regulations 2007

Says that all obligated companies (> 50 tonnes, >£2 million t/o p.a.) that handle packaging have an obligation to recover or recycle a % of that packaging (by weight)

Obligations vary depending on the company’s position in the supply chain:• Material suppliers 6%• Converters (e.g. RPC) 9%• Packer/filler 37%• Seller 48%

Obligated companies can prove they have done the recycling themselves, purchase PRNs to cover their obligation or join a compliance scheme (e.g. Valpak) to discharge their obligation

The PRN (Packaging Recovery Note) system is the UK Producer Responsibility scheme

A PRN is issued by an accredited recycler for every tonne of recycled material they take for reprocessing; a PERN (Packaging Recovery Export Note) is issued for waste that is exported for recycling

PRNs are purchased by obligated companies or compliance schemes to prove that the obligations have been met

The PRN system has the lowest cost to industry in Europe

The UK has met all the recycling targets since the system’s introduction 20 years ago

RPC has traditionally used Valpak (compliance scheme) to meet its obligations. The PRNs that bpi issues are used to meet the RPC obligation in the UK

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Plastics in the spotlight – HM Treasury

Roundtable discussion on 04 December with HM Treasury Officials following The Budget announcement re taxes on single use plastics. Invitees: BPF, BRC (British Retail Consortium), FPA (Foodservice Packaging Association), Packaging Federation (DB), CIWM (Certified Institution of Waste Management), DEFRA, ESA (Environmental Services Association), Aldersgate Group, FDF (Food and Drink Federation), BSDA (British Soft Drinks Association)

Key messages/outcomes• Considering a tax on single use plastics (not just packaging)• Want to engage with industry• No definition of single use plastics and none likely prior to the call for evidence• No details on where and how any tax would be levied and collected• Implementation of a tax will take 3 – 5 years• Keen to hear industry ideas on alternatives that will deliver more quickly• Medical plastics will be exempt

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Industry strategy and action - UK

Continue active engagement with DEFRA/HMT Engage with BEIS (Department for Business, Energy and Industrial Strategy) Stress the importance and capabilities of the plastics manufacturing industry in the UK (170,000 jobs, £23.5

billion revenue) Point out the possibility of unintended consequences of initiatives like plastic free aisles, which could

dramatically increase food waste (see cucumber example on slide 3) Target the reduction of ‘single use’ plastics (most littered items):

• Items found on beaches• “On-the-go” items (drinks containers, fast food packaging, plastic cutlery, drinking straws) Encourage the policy makers to adopt PRN reform as the most timely and efficient way to generate more

revenue and increase recycling rates Request government to adopt consistent waste collections in the UK to improve recycling rates Highlight the need for consumer education and make littering unacceptable Keep the debate on track – focus on marine litter and how industry proposals will help to reduce leakage to

the environment Engage the entire supply chain – particularly brand owners and retailers, the majority of whom fully

understand the benefits of plastic Encourage the use of recycled plastics

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Plastics in the spotlight – what happened in the EU

European Commission publishes “Public Consultation on reducing marine litter: actions on single use plastics and fishing gear”. Open until 12 February 2018

16 January: European Commission publishes ”A European Strategy for Plastics in a Circular Economy” Calls for action on:• Product design (Eco design)• Reduction in single use plastics• More recycled content in products• Separate collection of plastic waste• Reduction of marine litter

- Improving the recovery of fishing gear- Working with non-European countries that are the highest generators of marine litter- Curbing micro plastics pollution

• More research into Compostable and biodegradable plastics• A restriction on oxo-degradable plastics• Promotion of investment and innovation in the value chain• Voluntary commitments from industry to support the strategy’s objectives, particularly

as regards the uptake of recycled plastic

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Industry strategy and action - EU

Continue active engagement with the European Commission particularly DG Environment and DG Grow

Respond to all EU consultations

Work with individual country associations to address local issues

Plastics industry Voluntary Commitment published 16 January• 70% recycling and reuse of plastic packaging by 2040• 50% recycling and reuse of all plastic waste by 2040• Work along the supply chain and develop initiatives to move towards a Circular

Economy by 2030- Design for recycling- Improved collection and sorting systems- Increased use of recycled materials

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Other possible initiatives

DRS It is not a tax

Will be very expensive to implement (the German scheme cost €726m to set up and annual running costs are €793m)

Current UK recycling rates of PET drinks bottles is 74%, compared to Germany at 97%. A difficult cost/benefit equation

Scotland is proceeding with a DRS. The rest of the UK will wait and see how this goes

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RPC actions UK and EU

Continue to promote the benefits of plastic and the sustainability credentials of RPC through dialogue with customers, the trade press and at exhibitions

Continue to work closely with industry associations across Europe to ensure the Environment and RPC’s ability to contribute are represented in discussions with governments/legislators

Engage UK MPs who have an RPC factory in their constituency• Stress the skills & importance of RPC’s local workforce• Urge communication with Mr Gove• Visits to RPC Innovation, Design, Training facilities and factories are being

arranged (Over 30 MP’s invited)

Through the RPC network of Design and Innovation Centres, design products that are easily recyclable and have low environmental impact

Have developed a sustainability rating system for new designs that is currently being rolled out across RPC (see Appendix 1)

RPC signed up to “Operation Clean Sweep” (see Appendix 5) in 2010 and has since rolled this out to all UK sites. The programme is currently being developed across Europe

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The opportunity for RPC

RPC is a design led, innovative company We will continue to lightweight packaging, using less plastic to deliver the same

performance We will continue to help our customers to do the right thing and have developed tools to

assist the decision making process at the design stage of a product We already make products incorporating recycled materials and products made from bio-

based polymers We are working with major material suppliers to trial new compounds that incorporate

recycled content RPC (bpi) is the biggest polyethylene film recycler in Europe (c. 70,000 tonnes p.a.);

China’s ban on importing plastic waste is an opportunity for RPC and should lead to lower prices for recycled material in the UK We can use our recycling expertise to expand recycling operations into other parts of the

RPC Group We can today produce coffee capsules from compostable polymer that means that the

used capsule can be put directly into the food waste bin

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Recycling & the responsible disposal of plastic:

Closed loop recycling process:

Europe’s leading polyethylene film recycler with 70,000+ tonnes back into bpi recycled products

Over 60% of ESE’s polymer usage comes from recycled materials (from ESE bins)

Involvement in external activities to increase recycling of plastic e.g. New Plastics Economy Initiative

Currently 10% of the Group’s polymer comes from recyclate

Recently announced Chinese ban on import represents a significant opportunity; increased availability of recycled polymer

Pioneered development of plastics recycling schemes since early 1990’s

RPC manufactures a variety of products incorporating recycled plastics e.g. paint pots, agricultural film, bin liners

RPC recycling initiatives

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Technical performance:On filling lines and inside

coffee machines

Aroma protection:Oxygen barrier comparable to conventional high barrier

materials

Compostable:Within 12 weeks

B2Nature – Compostable coffee capsules

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21S 2 6 8 10 11

“From the results of composting trial carried out it can be concluded that the 90% pass level as prescribed by the standards is easily reached.”

In compliance with standards:European Norm EN 13432

American Standard ASTM D6400 International Standard ISO 17088

B2Nature – Compostable coffee capsules

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In summary

• RPC will continue to work with policy makers and industry bodies to achieve positive outcomes for plastics and the environment

• The majority of the Group’s products are recyclable

• And RPC Group has recycling capabilities

• RPC is and will continue to work with customers to do the right thing…

• ….aided by the Group’s focus on innovation and design

• RPC will continue to actively research bio-based polymers and combustible materials

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Thank you

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Appendix 1: RPC Design and the Circular Economy

We recognised very early that the requirements of the circular economy will effect the way we design our products

RPC Design worked very closely with the Ellen Macarthur Foundation and IDEO to develop a set of tools to enable designers to create products that are more suited to a circular approach

As the design department of one of the largest plastics packaging companies we realised that we had to take the lead in promoting this as many of our customers are unsure of what is going to be required

So we developed two internal tools to help us to consider the requirements and to show our customers the possible impact of any solutions we propose

The aim is to ensure the designers have the CE requirements at hand during the design process and to show our customers how their packs rate against a recognised scale of compliance

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Appendix 2: Sustainability Rating System

BA

BC

DE

F

• Developed as a check sheet to prompt designers at each stage of the process to ensure we have considered CE requirements

• Based on the tools we helped develop with EMF and the requirements of BS8001 (Design for CE)

• We create a sheet for each project and run through the checklist at each stage

Circular Economy Check sheet

• Designed as a quick visual reference to show customers how closely their packs comply to the requirements of CE

• Based on the Plastics Recycling Europe “Recyclass” system• Each concept is measured against requirements and an overall

rating is applied, similar to the familiar energy rating systems on electrical appliances

CE Compliance Rating System

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Appendix 3: Circular Economy Check Sheet

Before we start a project have we asked the right questions, challenged the requirements and completed our background research?

How does each concept we generate for the project meet the CE requirements?

How does the final design match up to the objectives set at the start of the project?

A list of the tools that were developed with EMF that are relevant to each part of the project

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Appendix 4: Compliance Rating System

BA

BC

DE

F

Rating system based on the “Recyclass” categories. A is the highest rating which indicates perfect for recycling and F means no part of the pack cannot be recycled.

The blue indicator shows the rating that the concept has achieved as measured against the recyclass definitions

The feather symbol shows that the pack is light-weighted and has been designed to incorporate the minimum amount of material

The arrow symbol shows the pack contains a % of recycled plastic

The circle symbol shows that the pack has an obvious reuse

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Appendix 5: Operation Clean Sweep

Operation Clean Sweep® is an international initiative from the plastics industry to reduce plastic pellet loss to the environment. In the UK it is led by the British Plastics Federation.

The initiative’s aim is to ensure that the plastic pellets, flakes and powders that pass through manufacturing facilities in the UK are handled with the care they deserve and do not end up in our rivers or seas.

By signing up to Operation Clean Sweep®, companies make a commitment to adhere to best practice and implement systems to prevent plastic pellet loss — and that they will play their part in protecting the aquatic environment.

RPC Group signed up to Operation Clean Sweep (OCS) in 2010

UK factories are implementing best practice

A programme is being developed to roll out OCS across the remainder of the RPC Group

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Appendix 6: ESE news

08 June 2017Eco Accreditation for Waste ContainersESE World plastics bins for waste and recyclables have been awarded the Blue Angel ecolabel, underlining the company’s ability to support its customers’ focus on meeting sustainability targets and pursuing environmentally-friendly policies.

The standards for Blue Angel accreditation are very strict. Containers must be made from at least 80% post-consumer recycled plastics, and the material must be certified according to EuCertPlast criteria – this means that its origin and that of the whole supply chain need to be traceable. In addition, the production site and the processes have to be certified by an independent accredited institution.

Compared to the production of virgin HDPE, recycled HDPE saves 100% crude oil, only needs a small percentage of energy use and delivers a much smaller environmental impact.

At the same time, it is essential that the use of recycled plastics does not affect the performance, quality or longevity of the containers. Significantly, all ESE Blue Angel containers fulfil the tests and requirements of the relevant national and European standards and are certified in accordance with RALGZ 951/1.

ESE Blue Angel containers – available in both 2-wheel and 4-wheel versions – therefore provide an effective eco-balance solution that adds another unique feature to these products.

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08 November 2017What Could be Sweeter than Bulldog’s New Sustainable Packaging?RPC M&H Plastics and Bulldog Skincare for Men have joined forces once again for Bulldog’s new line of skincare packaging, with a sustainable twist.

The first men’s skincare brand in the world to use Sugarcane as a raw material, Bulldog have chosen to go green with their updated flexible tube line up, which features Moisturisers, Face Washes and Face Scrubs, with multiple variations of each product focusing on different skin types which includes sensitive skin, mature skin and oily skin.

The ‘Green’ polyethylene is created by farming Sugarcane on sustainable land in Brazil, thousands of kilometres from the Amazon rainforest.

Whilst being cultivated, the Sugarcane captures CO2 from the air as it grows. In fact, Sugarcane is so efficient at capturing CO2 that with every kilogram of Green Plastic produced 3,09 kilograms of CO2 is removed from the air!

Once grown, the Sugarcane is transformed into “ethanol”, a type of alcohol, which is in turn used by Bulldog’s partner Braskem to create Green Plastic.

The Green Plastic is then used by RPC M&H Plastics instead of fossil fuel sourced material to create Bulldog’s Flexible Tubes while maintaining the performance characteristics of traditional Polyethylene.

However, the environmental positives do not stop there, the Sugarcane is often planted on degraded pasture land which in turn helps to recover the soil for future use as general farmland or to simply plant another crop of Sugarcane!

RPC M&H Plastics is continually seeking alternative environmentally-responsive products as the company believes that a small change can make a big difference while continually striving towards a business that has minimal impact on the environment.

Simon Duffy, founder of Bulldog Skincare For Men says says:Bulldog is proud to be the first men’s skincare brand in the world to use plastic from sugarcane in our packaging. We have always tried to make the most ethical and sustainable decisions we can, from never testing on animals, to never using microbeads to making all our products suitable for vegetarians and vegans. Plastic from Sugar Cane is the latest step in this approach and we are delighted to have worked with M&H Plastics to turn Green PE into something we can use in the tubes and caps of our packaging.

Appendix 7:

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Appendix 8: Glossary

BEIS – Department for Business, Energy and Industrial Strategy

Bio-based polymers – plastics produced from ethanol extracted from plants rather than fossil fuels

Compostable – plastics that break down completely under certain conditions

BRC – British Retail Consortium

BPF – British Plastics Federation

BSDA – British Soft Drinks Association

DEFRA – Department for Environment, Food and Rural Affairs

DRS – Deposit Return Scheme

EAC – Environmental Audit Commission

EPR – Extended Producer Responsibility

ESA – Environmental Services Association

EuPC – European Plastic Converters

FDF – Food & Drink Federation

HMT – Her Majesty’s Treasury

INCPEN – The Industry Council for research into Packaging and the Environment

IUCN – International Union for Conservation of Nature

NGO – Non-Governmental Organisation

Oxo-degradable – plastics that breakdown into micro plastics when exposed to oxygen

PRN – Packaging Recovery Note

PERN – Packaging Export Recovery Note

WRAP – Waste and Resources Action Programme

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Forward looking statementsThis presentation contains forward-looking statements, which:have been made by the directors in good faith based on the information available to them up to the time of the approval of this presentation and such information should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying such forward-looking information. The Group undertakes no obligation to update these forward-looking statements and nothing in this presentation should be construed as a profit forecast. Past performance is no guide to future performance and persons needing advice should consult an independent financial advisor.

Nothing in this presentation shall constitute, in any jurisdiction, an offer or solicitation to sell or purchase any securities or other financial instruments, nor shall it constitute a recommendation or advice in respect of any securities or other financial instruments or any other matter.