Ri appe spain 16 01-2015

Aon Risk Solutions Global Risk Consulting Risk Control & Engineering

Proprietary & Confidential | Aon UK Limited is authorised and regulated by the Financial Conduct Authority

Risk Improvement Report

APPE Iberia

Casarrubios del Monte, Toledo

January, 2015 Prepared by: Beatriz Martínez Del Campo Senior Consultant Global Risk Consulting

APPE APPE Iberia


Aon Risk Solutions | Global Risk Consulting | Risk Control & Engineering

Table of Contents 1. INTRODUCTION 1

2. EXECUTIVE SUMMARY 2

3. RECOMMENDATION PRIORITY GUIDELINES 3

4. RECOMMENDATIONS 4

2013.1-A1 Fire Pumps 4 2013.2-A3 Sprinkler Fire Protection 4 2013.3-A3 Fire Compartmentalization 5 2013.4-B3 Hose Reels 6 2013.5-C1 Battery Charger in Compressor Room 7 2013.6-C2 Automatic Fire Detection 7 2013.7-C3 Cardboard Containers 7 2013.8-C3 CO2 flooding system in the MLVS room 8 2013.9-C3 Transformers wall heights 8 2013.10-C3 Procedures 8 2013.11-C3 Business Contingency Plan 8

APPE APPE Iberia



Disclaimer "This report and any recommendations in it are based on certain observations made by us and/or from information supplied to us from sources which Aon believes it is entitled to assume are reliable. Conditions may have changed since our survey and/or the preparation of this report, and the reader must take this into account when acting in reliance on it. It is not, and is not intended to be, exhaustive or conclusive, covering every hazard or risk potential, nor to guarantee compliance with any statute or regulation, nor does its preparation and submission to insurers relieve you of your obligation to make full disclosure of all material facts to your insurers. It is offered to assist you in your assessment and/or management of risk. If you are in any doubt as to whether a fact is material and should be disclosed to your insurers, you should promptly discuss this with your insurance broker, if at all possible prior to the binding of the insurance contract. "

Senior Consultant …………………………………………….. Beatriz Martínez Del Campo For and on behalf of Aon Risk Solutions Global Risk Consulting 23 January 2015

Confidentiality Clause

“The information contained within this document is confidential to both Aon Risk Solutions and APPE Iberia and has been produced solely for the purpose of our discussions regarding the latter's insurance programme. The contents may not be reproduced or disclosed to any third party without the prior written approval of Aon Risk Solutions and Aon Risk Solutions disclaims any liability whatsoever to any such third party. Please also read the important notes above". Copyright - Aon plc 2015.

APPE APPE Iberia



Site Visit Details

Group Name: APPE

Subsidiary Name: Artenius Pet Packaging Iberia, S.A.APPE

Site Address: Avda.Constitución s/n – Parcelas 290-293, P.I. Monte Boyal

45950 Casarrubios del Monte – Toledo (Spain)

Occupancy: Manufacturing of monolayer PET preforms and PET bottles.

Conferred with: Antonio de Molina – Engineering Responsible

Site Contact Details:

Prepared By: Beatriz Martínez Del Campo

Consultant’s Contact Details: Aon Risk Solutions Global Risk Consulting – Risk Control & Engineering

Office: Aon Spain Rosario Pino, 14-16 28020 Madrid - Spain

Mobile: 618 944 261 E-mail: [email protected]

Date of Visit: 16th of January, 2015

Document Ref:

Document History Rev No: RI APPE Spain 16-01-2015

APPE APPE Iberia


Aon Risk Solutions | Global Risk Consulting | Risk Control & Engineering Page 1

1. Introduction Aon would like to take the opportunity to thank all concerned for the assistance and co-operation extended during this visit.

This Risk Improvement Report has been prepared following inspection of the premises, discussions with management and relates to conditions observed at the time. The purpose of this report is to assist in reducing the possibility of loss from the risks assessed.

The risk improvements contained in this report are of an advisory nature and reflect good risk management practice. They were all discussed with site management prior to leaving the site.

APPE APPE Iberia



2. Executive Summary

Fire APPE Toledo is a company dedicated to the manufacture of monolayer PET preforms.

The activity takes place in several units that form a single area. All are adjacent and are interconnected; there is no compartmentalization within the building. Over 75% of the total area is dedicated to finished product storage. Non-combustible materials have been used in the building construction.

The protections are based fire extinguisher, hose reels, hydrants with broad coverage (almost 100% of the area) and fire detection in all areas. The new part of the store (enlargement) is provided with automatic sprinklers. There is a double water reservoir and two pump groups.

Facility maintenance and housekeeping are considered adequate.

It is considered that protective measures against fire, given the occupancy, could be improved in some aspects, such as partitioning between warehouses and production, sprinkler systems, etc.

Due to the lack of fire compartmentalization and automatic fire protection, MPL and MFL are considered 90%.

Business Interruption The nominal capacity of the plant is 2,100 million preforms and 80 million bottles. The production during the year 2014 amounted to 1800 million preforms, 21 million bottles and 6 million other different types of pots (containers).

The majority of the production machines are exchangeable, which makes the production more flexible and could reduce the production loss in case of any line to be destroyed. There are reportedly no specific bottlenecks regarding the production machines.

All the products could be produced in similar lines in other Artenius PPE production sites around Europe. If the moulds were destroyed during the incident, it would take 10 weeks to build new ones. Raw materials (PET) are mainly received from different suppliers and they have a wide range of clients. Contingency Plan has not been developed.

We consider a reconstruction time of the plant between 12 and 18 months.

Perils There are not significant exposures from adjacent industries (more than 20 m) and the exposure to CatNat issues is considered Low in this area.

Security & Money The attractiveness of the contents, raw materials and finished products, is considered low.

The site is totally fenced and there is a CCTV system covering all the access points and some indoor areas. Access control systems are present for employees and visitors.

The office building is protected by volumetric intrusion detection and magnetic contacts. The maximum amount of cash is limited to 2000 € and 3000 dirham and it is stored in a strongbox.

APPE APPE Iberia



3. Recommendation Priority Guidelines

A A situation or practice likely to lead to; loss of life or permanent disability, extensive damage to property, critical interruption to operations or substantial financial loss. Material breach of regulations.

B A situation or practice likely to lead to; serious injury or illness, considerable damage to property, interruption of operations or considerable financial loss. Inadequate compliance with regulations.

C A situation or practice likely to lead to; Minor injury or illness, non-disruptive damage to property and/or moderate financial loss.

Timescale Codes

1 Matters to which IMMEDIATE attention should be given. Either due to the need for URGENT action, or the SIMPLICITY of completing the recommendation.

2 Matters requiring approval or involving moderate costs. A timescale of THREE TO SIX MONTHS would be appropriate.

3 Matters to which improvements need to be made AS SOON AS PRACTICABLE.

APPE APPE Iberia



4. Recommendations

A A situation or practice likely to lead to; loss of life or permanent disability, extensive damage to property, critical interruption to operations or substantial financial loss. Material breach of regulations.

Timescale Codes




2015.1-A1 Fire Pumps

After checking the external company fire equipment maintenance report (dated 13.01.2015), it is recommended to confirm all the deficiencies have been finally solved. Main deficiencies are:

• Jockey pump 2 and Diesel pump 2 were disconnected. It is really important all the pumps are permanently in automatic position (they were during our visit). In case of disconnection, an impairment procedure must be followed and additional measures must be taken.

• Recharge or replace the batteries for Diesel pumps 1 & 2 • It remains performing the 2015 flow test for Diesel pump 2

It is recommended to check the engine heaters for the Diesel pumps 1& 2 because, during the visit, the engine temperature was not warm. It is recommended to establish the following start sequence of the pumps: - Jockey, starts at 8 and stops at 9 bar - Electric main, starts at 7 bar - Diesel main, starts at 6 bar - Diesel secondary, starts at 5 bar

2015.2-A3 Sprinkler fire protection Currently only the new warehouse area is equipped with automatic sprinkler protection, but due to the type of material stored combined with the storage configuration and the storage height, according to standard UNE 12845 this area should be categorized as REA III ST3, and so the maximum allowed storage height would be 3.2 meters (given the existing sprinkler design density of 12 mm/min). In fact, as in most of the cases this height was overcome, intermediate sprinklers should be installed.

APPE APPE Iberia



Additionally, the fact that there are adjacent areas to the new warehouse area without sprinkler protection and without fire compartmentalization, makes that the available installation may completely loose its effectiveness in the event that a potential fire began in the unprotected adjacent area. Because of that, and due to the fact that in the production areas there is also an important combustible load and that these areas house the highest values of the plant, we also recommend to protect them with automatic sprinklers (as well as the 100% of the main building because of the lack of fire compartmentalization). If any new installation is going to be installed, it should be designed and installed by a certified company in accordance with the CEPREVEN, NFPA, or FM standards. If protecting the whole main building with automatic sprinklers were not possible, at least it should be advisable to evaluate the performance of the existing sprinkler system with an approved NFPA / FM / European CEA 4001 Expertise Company in order to fix a limitation to the storage height, thus limiting the combustible load to acceptable levels.

2015.3-A3 Fire Compartmentalization A good way to minimize damage of a fire is to establish physical barriers between different areas to prevent the possible spread of the flames between them. We recommend the following measures in order to get a good fire compartmentalization level, between production and warehousing areas: - Seal with the same material (bricks or concrete) all those openings in the walls that are not strictly necessary. - Install fire doors instead of normal doors between fire sectors:

a) The doors should be metallic with an appropriate thickness and an approved fire resistance of at least 90 minutes. b) Pedestrian fire doors should be always kept shut with an automatic closing device. c) Vehicle fire doors should hold open on a magnet and close on fire alarm activation. d) In case of lack of electric supply, fire doors should be shut automatically. e) Fire doors should be protected against strokes due to the normal activity of the factory (forklift trucks, etc.). f) Fire doors should be surrounded by an area free of materials of any type that could block the door. g) Fire doors should be protected against possible hits from moving machinery. h) Regular checks of the fire compartmentalization should be implemented in order to ensure its perfect state of operation and maintenance.

- Seal all cable passages or ducts between fire areas: Paint electrical wire connection areas with intumescent paint. Seal all holes with cement. Where it is not convenient, place intumescent bags (metallic cable trays perforations). Provide pipes (except water pipes) with intumescent collars. - Install fire dampers in ventilation ducts, pipes, etc., crossing any fire wall. - Install a 1 m horizontal compartmentalization eave at the top of the fire walls to prevent the fire going from one zone to another through de roof.

APPE APPE Iberia



B A situation or practice likely to lead to; serious injury or illness, considerable damage to property, interruption of operations or considerable financial loss. Inadequate compliance with regulations.

Timescale Codes




2015.4-B3 Hose reels

Due to high fire load present throughout the site, it would be advisable to install hose reels in all areas (including production areas) in which there are currently no such type of installation. The distance between any point and the nearest hose reel should be less than 25m.

APPE APPE Iberia



C A situation or practice likely to lead to; Minor injury or illness, non-disruptive damage to property and/or moderate financial loss.

Timescale Codes




2015.5-C1 Battery charger in compressor room Regarding the battery charger located in the compressor room:

• It should be located longer than 3m from any combustibles.

• It should be provided with protection devices against physical impact.

2015.6-C2 Automatic Fire Detection It is recommended to extend the automatic fire detection to the spare parts warehouse (ground and first floor) in the maintenance area.

2015.7-C3 Cardboard containers Cardboard containers next to the south wall of the main building are located close enough to the wall so that in case of fire, the flames could spread to the building. To avoid it, we recommend moving away these containers as far as possible from the wall.

APPE APPE Iberia



2015.8-C3 CO2 flooding system in the MLVS room

The MLVS (CGBT) room is protected with an automatic CO2 flooding system. It is recommended:

• As a lot of cables (with combustible isolation) run within the raised floor, if a fire was started there, the CO2 protection system would probably be ineffective. To solve this problem, at least 4 floor tiles should be changed by some kind of tiles which may let the gas go through (grating type).

• To install a metal solid sheet on the door in order to get the required CO2 concentration inside the room.

• To place a warning sign to notice about the CO2 risks

2015.9-C3 Transformers wall heights Extend the height of the walls so that they are at least 30cm higher than the highest point of the transformer. This is recommended as good practice by international standards such as FM and NFPA.

2015.10-C3 Procedures • Impairment Procedure:

An impairment procedure with an impairment form is recommended to be established. Impairment of sprinkler systems, water storage tanks, fire pumps, etc., can result in an uncontrollable fire. It is essential that adequate measures are taken for the duration of the impairment and adequate checks on the system’s functionality (valves) should be incorporated. Impairments to fire extinguishing installations should be temporary and for the minimum time possible. The impairment form must be completed / closed out and where the isolation has been over 48hours emailed to the insurance company. An impairment format is available at the end of the report.

• Hot Work Permit: The work area and all adjacent areas to which sparks and heat might have spread should be thoroughly inspected 60 minutes later on completion of the work.

2015.11-C3 Business Contingency Plan

It is recommended to develop a Business Contingency Plan for this site. A business contingency plan comprises a series of documents which in the event of a partial of complete loss of the site, utility, customer, brand etc. to initially deal with the event to stabilise it and then to ensure an efficient managed recovery. In many cases the plans will also look at support from within the Group or alternatively under licence – outside the Group.

APPE APPE Iberia



Aon Global Risk Consulting AGRC Risk Control and Engineering provides operational risk management solutions for complex property and casualty related risks in the UK and the rest of the world. Through our extensive group of over 600, highly qualified professional technicians and consultants in over 30 countries we provide advice and assistance to clients on the property, casualty and business continuity issues that have the potential to impact on their business operations, balance sheet and the cost of their insurance programme.

We create value, in partnership with you by:

• assisting in the design and placement of the best possible insurance and risk financing programme;

• advocating on risk control issues with insurers, regulators and internal operations where required; and

• identifying and implementing solutions that deliver sustainable economic benefit.

Our UK Services Aon Global Risk Control and Engineering, within the UK, provides a wide range of risk related consultancy services to Aon clients, through a team of qualified professionals, with extensive knowledge and experience across UK industry sectors.

Our services include underwriting surveys and market presentations, audits, technical consulting and training services within the areas of Property and Casualty Risk Control.

Our capabilities include: Fixed Asset Protection - evaluation and assessment of material damage risks and loss potentials for both general and highly protected risks, advice on protective/preventive measures and damage limitation controls, design and implementation of standards and procedures, business interruption risks and exposures Health & Safety - management systems audits and reviews, improvement programmes, safety culture and behavioural safety projects, accident investigation and claims defence projects, risk evaluations and regulatory advice.

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Through our colleagues within AGRC we can also provide access to teams of specialists providing Enterprise Risk Management, Analytical and Actuarial, Risk Financing, Forensic Accounting and Claims Consulting services.

APPE APPE Iberia



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Ri appe spain 16 01-2015