Living by the Huber · PDF fileLiving by the Huber Principles 3 A message from Mike Marberry,...

Living by the Huber Principles

2012 Year in Review

THE HUBER PRINCIPLES

Only when our actions

are in accord with our Principles,

can we maintain the

high standards we have set

for ourselves as a Company.

Living by the Huber Principles 3

A message from Mike Marberry, President and CEO of Huber

I’m pleased to share with you the 2012 edition of Living by the Huber Principles. The purpose of this brochure is two-fold: it provides background on Huber and it demonstrates the efforts of our Company

and employees to adhere to our core values: the Huber Principles.

As you will see from these pages, Huber is one of the largest family-owned companies in the US. Our Company is international in scope, with more than 4,000

employees based in over 20 countries. We develop and manufacture engineered materials that go into thousands of everyday products. Huber ingredients improve the properties of everything from beverages to yoghurt to toothpaste. You’ll find our engineered woods in your home, from top to bottom—from our energy-efficient ZIP System® roof and wall sheathing to our innovative AdvanTech® flooring.

While there are many attributes that set our products apart, it is our Principles that set Huber apart. We are guided by four core values in everything we do, everywhere we operate:

• Environmental, Health & Safety (EH&S) Sustainability — World-class safety and environmental performance.

• Ethical Behavior — A Company identity that we are all proud of.

• Respect for People — Great place to work for honesty, respect, teamwork and recognition.

• Excellence — Competitive advantage through customer intimacy and operational excellence.

At Huber, our Principles are not merely words on a lobby wall or a slide in a presentation deck. They are at the forefront of every employee’s mind every day they come to work. In the following pages, you’ll find a brief overview of each of our four Principles. We’ve also selected examples from 2012 of how Huber employees around the world applied our core values to conduct business—and conduct themselves. We’ve also included just a few of the many ways in which our Company, our employees and the Huber family do their part to support the communities in which we live and work.

Living up to the high standards of our Principles is not a static process. That is why we measure our efforts against each Huber Principle, identify opportunities for continuous improvement and report our progress to employees, customers, colleagues and the communities in which we operate.

The Huber Principles are much more than a set of words, they are the drivers of our long-term success.

Mike Marberry

President & CEO

J.M. Huber Corporation

Environmental Health & Safety (EH&S) Sustainability 6

Ethical Behavior 12

Respect for People 14

Excellence 18

Huber and the Community 24

Huber Around the World 27

Contents

On the cover: Ladders, hammers

and hard hats were the order of

the day when employees at the

headquarters for Huber Engineered

Woods LLC (HEW) in Charlotte,

North Carolina, worked to install

donated ZIP System® roof and wall

sheathing on a Habitat for Humanity

house. HEW has a long history of

helping the charitable organization

that partners with people in need to

build affordable homes. For more

about Huber in the community,

see page 24.

Key Facts

• Founded in 1883 in New York, New York

• Corporate offices in Edison, New Jersey

• More than 4,000 employees around the world

• Operations in more than 20 countries

• Five generations of family ownership, now welcoming its sixth generation of family members

• One of the largest privately held companies in the United States

• Revenue of more than $1.6 billion in 2012

Who we are

The J.M. Huber Corporation is a global leader in engineered materials with 60 locations in 20 countries. With more than 4,000 employees worldwide, we develop and manufacture products that enhance the performance of thousands of consumer and industrial products across a broad range of industries. Family-owned since 1883, we are one of the largest privately held companies in the United States.

What we do

Our engineered materials are part of daily life—from dental silicas that make smiles whiter and brighter, to hydrocolloids that improve everything from foods to pharmaceuticals. Our engineered wood products are breaking new ground with residential and commercial builders.

Huber also has two unique service businesses. Our specialized working capital solutions help clients meet their securitization and supply chain finance needs. Our sustainable forestry practices help ensure the responsible environmental stewardship of timberlands.

Milestones in Huber’s historyTracing its beginnings to 1883,

the J.M. Huber Corporation has

evolved into a global leader in

engineered materials. Today,

Huber delivers innovative

products to customers through

its engineered materials

businesses: CP Kelco, Huber

Engineered Materials (HEM)

and Huber Engineered Woods

LLC (HEW).

The early years: entering emerging industries (1883-1930s)

• Joseph Maria Huber, the Company’s founder, travels to New York City from Munich, Germany, to develop new markets for his family’s dry colors business

• Kelco Company founded in San Diego, California

• Foundation for Copenhagen Pectin begins operations in Copenhagen, Denmark

Rapid expansion, rapid growth (1940s-1970s)

• Carboxymethyl cellulouse (CMC) operations begin in Äänekoski, Finland, by Copenhagen Pectin

• Huber acquires timberlands in Maine

The J.M. Huber CorporationWhat we stand for

Sustaining a family-owned business from one generation to the next presents unique challenges. Yet Huber’s growth has spanned three centuries and is now welcoming its sixth generation of family members. Our growth is built on a solid foundation: the Huber Principles. Our four core values—Environmental, Health & Safety Sustainability, Ethical Behavior, Respect for People and Excellence—define Huber’s culture and how we do business everywhere we operate.

• World’s first commercial production of xanthan gum launched by Kelco

• Huber enters specialty chemicals business with patent for silicates

4 Living by the Huber Principles

A sampling of the industries Huber serves:

• Agrochemicals

• Beverages

• Cosmetics

• Flame Retardants and Smoke Suppressants

• Food

• Household Products

• Industrial Applications

• Land Management

• Mining

• Oilfield Drilling

• Oral Care

• Paints and Coatings

• Paper

• Personal Care

• Pharmaceuticals and Nutraceuticals

• Plastics

• Residential and Commercial Construction

Acquisition, innovation, diversification (1970s-1980s)

• Alumina trihydrate (ATH) and calcium carbonate operations acquired by Huber

• Huber enters Oriented Strand Board market

Transforming the organization (1990s)

• Gellan gum production begins at Kelco in San Diego

• Carrageenan manufacturing begins at Kelco in Cebu, Philippines

• Huber Engineered Materials (HEM) brings together specialty chemicals and engineered minerals businesses

• Huber Engineered Woods LLC (HEW) focuses on developing specialty products such as AdvanTech® flooring

Going global (the 21st Century)

• CP Kelco created by merger of Kelco with Copenhagen Pectin

• Huber acquires CP Kelco

• Noviant acquisition becomes part of CP Kelco

• Huber establishes J.M. Huber Asia Pacific in Shanghai, China

• Xanthan gum plant in Wulian, China, joins CP Kelco

• Acquisitions by HEM in US include ATH, ground calcium carbonate and nutrition/functional food market operations

• Huber opens two plants in China: a CMC plant for CP Kelco in Taixing and a silica plant for HEM in Qingdao

• HEM strengthens Fire Retardant Additives portfolio with acquisitions

CP KelcoHuber

Resources

Huber Engineered Materials

Huber Engineered Woods

Huber is a global company with a diverse portfolio of businesses

Huber operates as a Portfolio Management Company, which serves as an effective organizational structure for our diverse range of businesses:

• CP Kelco

• Huber Engineered Materials

• Huber Engineered Woods LLC

• Huber Resources Corp

• Demica

Our businesses hold leadership positions in rapidly growing markets such as hydrocolloids, specialty chemicals and minerals, and engineered woods.

Environmental, Health & Safety (EH&S) Sustainability

Huber measures its performance against the Principle of EH&S

Sustainability across four key areas: occupational safety,

process safety, environmental performance and sustainability.

• Occupational safety — To drive continuous improvement in safety, we are committed to accurately reporting all safety incidents. Safety reporting at Huber applies to both traditional measurements such as recordable incidents and lost work days (known as lagging indicators of safety because they follow an event), as well as leading indicators such as risk assessment, safety improvements and behavior-based safety. Leading indicators help predict potential safety problems and allow the Company to take corrective actions before hazards arise. At Huber, our safety goal goes beyond achieving numbers. It is focused on keeping people safe.

• Process safety — Huber is committed to protecting our employees, the environment and the communities in which we operate. Our plants use Process Safety Management (PSM) to help prevent or minimize the consequences of a release of toxic, reactive, flammable or explosive material.

• Environmental performance — We made steady progress in 2012 in implementing and maintaining world-class Environmental Management Systems (EMS) at our plants around the world. Both external and internal environmental audits were conducted to ensure that our facilities adhere to our EMS and comply with all environmental regulations.

• Sustainability — We track and measure four key attributes of sustainability that are associated with our manufacturing processes: water, carbon dioxide (CO2e, carbon dioxide equivalent, the internationally recognized measure for greenhouse emissions), energy, and waste per unit of production. These metrics are widely recognized by our customers to measure sustainability.

One of Huber’s goals is to

be world-class in preventing

employee injuries and in

maintaining process safety.

We will implement an effective

EH&S management and

compliance system. Our

employees will strive for

sustainability and continuous

improvement in reducing our

environmental footprint. Huber

will be a good corporate citizen

in communities wherever we

operate around the world.

HEW achieves safest year on record Employees across Huber Engineered Woods LLC (HEW) turned in record safety performance in 2012. The positive results were driven by HEW’s plant in Broken Bow, Oklahoma, which achieved a significant safety milestone in September of 2012: it marked 1,000 days without a recordable injury. The more than 70 employees at the HEW location attributed their success to the significant amount of time, effort and energy devoted to the site’s safety program, which includes training and a commitment to apply safe work practices to every aspect of their jobs. HEW’s plant in Crystal Hill, Virginia, also fueled HEW’s success—having achieved 869 days without an injury by the end of 2012.



In March of 2012, more than 100 Huber employees from around the world came together in Atlanta, Georgia, for a week-long Global Environmental, Health & Safety (EH&S) Conference to share best practices and identify ways to drive continuous improvement in Huber’s safety and environmental performance. The meeting included attendees from CP Kelco, Huber Engineered Materials (HEM), Huber Engineered Woods LLC (HEW), Huber Resources Corp, as well as Corporate.

The conference brought together senior management, representatives from every Huber manufacturing site, participants from Research & Development Centers, as well as employees across a wide range of functions, including EH&S, Quality, Human Resources and Regulatory Affairs. Among the highlights of the conference:

• Support from senior leadership — Huber President & CEO Mike Marberry delivered the keynote address and the Presidents of each of Huber’s engineered materials businesses addressed the group.

• Building a world-class safety culture — Huber invited an international authority on safety management to address the group on establishing a world-class safety culture. During a full-day workshop, attendees developed specific actions to help improve safety performance.

• Meetings led by internal and external experts — Subject matter experts from within Huber, as well as outside consultants, covered a broad range of EH&S topics, including:

• Risk matrix and risk ranking scenarios

• Hazard analysis

• Data-driven plan development

• Sustainability

• Behavior-Based Safety

• Environmental compliance planning

• Incident investigation

• Implementation of MMSRs — The conference emphasized the need for every Huber manufacturing site to focus on implementing key Minimum Mandatory Standards & Requirements (MMSRs), which serve as the main elements of an Environmental Management System.

• Outstanding EH&S Performance awards — Six Huber sites were acknowledged for achieving Outstanding EH&S Performance.

Overall, the conference provided an opportunity for Huber employees from around the world to connect and collaborate face-to-face on improving EH&S performance.

More than 100 employees from around the world participated in Huber’s global EH&S Conference to identify ways to drive continuous improvement.

Focusing on world-class safety performance and environmental excellence

Teams of employees from CP Kelco’s plants in Taixing and Wulian, China, helped their locations earn Food Safety System Certifications.

CP Kelco marks food safety milestone

In 2012, CP Kelco completed a nearly three-year effort to have all nine of its global manufacturing plants meet the requirements for the Food Safety System Certification known as FSSC 22000—a standard recognized by the Global Food Safety Initiative (GFSI). The certification assures companies that they can have complete confidence in the safety of CP Kelco’s ingredients, no matter where the products are manufactured or shipped.

GFSI is a business-driven effort to promote continuous improvement in food safety management systems, with the goal of ensuring confidence in the delivery of safe food to consumers around the world.

Local fire departments and ambulance services often participate in emergency drills coordinated by Huber plants. This firefighter is also a 30-year employee at the HEW plant in Easton, Maine.

Emergency preparedness drills keep plants at the ready

Huber plants around the world practice emergency drills to help employees prepare for potential emergencies at their location. For example, the Huber Engineered Woods LLC (HEW) plant in Easton, Maine, wanted to see how it would respond if a railroad car overturned, spilled fuel and posed the risk of a fire or explosion. Employees at Easton staged a derailment drill in August of 2012 to test their readiness. The plant coordinated its drill with the Easton Fire Department and ambulance service. The drill, which went smoothly, included notifying all required parties, containment of any spilled material, evacuation of the plant to ensure the safety of all employees and transport of those with mock injuries to the local hospital. The drill accomplished its purpose: identify any procedural issues and ensure that the HEW team and emergency responders within the community know the proper steps in the event of a real emergency.



Moving ahead with MMSRs

All of Huber’s manufacturing sites made it a priority to implement the top five Minimum Mandatory Standards & Requirements (MMSRs) in 2012. MMSRs represent the core components of building a world-class Environmental Management System (EMS). While there are numerous MMSRs, Huber businesses focused on the top five MMSRs in 2012:

• Compliance Management

• Change Management

• Risk Management

• Monitoring, Measurement & Operational Control

• Self Assessment & Audits

While all of Huber’s businesses made good progress against MMSRs in 2012, Huber Engineered Materials (HEM) led the way. Thirteen of HEM’s 15 manufacturing sites reported that they had implemented a sufficient percentage of the top five MMSRs to provide the foundation of an EMS. The two remaining sites are implementing MMSRs that are more appropriate for their operations.

Solo dryer at HEM’s calcium carbonate facility in Quincy, Illinois.

Six Huber sites earn recognition for outstanding EH&S performance

While every Huber site is committed to achieving world-class safety and environmental performance, six locations led the way in 2012 and were recognized for outstanding Environmental, Health & Safety (EH&S) performance. The sites had to meet a robust set of criteria of what it means to live up to the Huber Principle of EH&S Sustainability, including:

• Operate for one year or more without a recordable incident among employees or contractors.

• Achieve excellent audit results in compliance and conformance with all environmental regulations and permit requirements.

• Implement and maintain an Environmental Management System, including adhering to key Minimum Mandatory Standards & Requirements (MMSRs).

• Implement and maintain a successful Process Safety Management program to protect the safety of employees, the environment and the communities in which the site operates.

Here are the Huber sites that performed at the highest levels and reached these world-class EH&S goals in 2012:

Large sites (50 or more employees):

• Crystal Hill, Virginia — Huber Engineered Woods LLC (HEW)

• Cebu, the Philippines — CP Kelco

• Limeira, Brazil — CP Kelco

Small sites (less than 50 employees):

• Commerce, Georgia, Research & Development (R&D) and Engineering Groups — HEW

• Havre de Grace, Maryland, R&D Center and Pilot Plant — Huber Engineered Materials

• San Diego, California (Aero Drive), R&D Center — CP Kelco

CP Kelco’s plant in Cebu, Philippines, manufactures carrageenan. It was among the six Huber locations worldwide to be recognized for outstanding EH&S performance in 2012.



Employees at CP Kelco’s plant in Lille Skensved, Denmark, participate in a Hearts & Minds safety workshop.

Employees embrace Hearts & Minds safety initiative

In 2012, two Huber businesses—CP Kelco and Huber Engineered Woods LLC (HEW)—began implementing the Hearts & Minds safety program at their plants. CP Kelco launched the initiative at its facility in Lille Skensved, Denmark, while HEW introduced it at its plant in Easton, Maine.

As part of the effort, employees at both facilities attended Hearts & Minds workshops designed for their specific function, such as manufacturing or technology. The program provides several tools for employees to understand their plant’s safety culture and identify opportunities for improvement. After each training session, employees developed a personal action plan to determine how they can make a positive change in their site’s safety culture.

Sustainability efforts tap into ideas for using less water in manufacturing

As a responsible steward of the environment, Huber focuses on four key areas that are widely recognized measures of sustainability among its customers: reducing the use of energy, carbon dioxide (CO2e), water and waste per unit of production.

One area in particular gained more emphasis in 2012: the use of water. Whenever water is part of Huber’s production processes, there can be significant costs associated with its purchase, treatment and disposal.

CP Kelco and the Silica business unit of Huber Engineered Materials (HEM) use the most water of any of Huber’s operations. These businesses took extra steps in 2012 to reduce water consumption. For example, CP Kelco’s biogums facility in San Diego, California, uses a significant amount of water in an area that is considered “water-stressed.” Rather than just measure the amount of water that enters and exits the plant, which is typical for Huber sites, the San Diego site began measuring inlet and outlet water in the manufacturing process. Based on the data collected, the plant will identify opportunities for water reduction and then share its findings with Huber operations around the world. Reducing the water footprint of Huber’s products and processes represents a win for customers, regulators, Huber, and most importantly, the earth’s resources.

Reducing the water footprint of Huber’s products and processes represents a win for customers, regulators, Huber, and most importantly, the earth’s resources.

The Huber culture

will encourage open

communication and ensure

that potential ethical concerns

can be easily surfaced and

properly resolved. Globally,

we will operate our business

with the highest standards

for compliance with laws,

regulations and corporate

policies. Huber employees

will conduct themselves with

professionalism and ethical

responsibility toward others.

Ethical Behavior Huber’s ethics program helps ensure the Company translates

its words into actions and protects our most valuable

asset: Huber’s good name. To create a culture of integrity, our

comprehensive ethics program includes:

• Standards and procedures that are clearly written and easily available, including the Huber Principles and Policy Directives.

• Delegation of authority at every level, from the Huber and Management Boards of Directors to the CEO, business unit Presidents, and functional and business leadership teams.

• Oversight and responsibility for the implementation, execution and maintenance of the program rests with the Chief Ethics Officer, the Policy Committee and business unit Presidents.

• Training programs that are accessible and clearly communicate Huber’s ethical standards.

• Auditing and monitoring of program effectiveness, including EH&S audits, certifications and internal audits.

• Consistently applied discipline and protection from retaliation for those who report ethical concerns.

• Reporting and response mechanisms, such as the 24-hour Ethics Line and the Annual Ethics Questionnaire.

To strengthen our reputation for Ethical Behavior, we take every potential incident seriously and work quickly to resolve any issues.

Safeguarding Intellectual Property—for ourselves and our customers

To operate at the highest ethical standards, it’s essential to protect Intellectual Property that belongs to Huber, as well as any proprietary information that our customers entrust to us.

Huber has several tools to help safeguard its research and development efforts, products and processes. These include patents, trademarks, trade secrets and copyrights. By protecting these aspects of our business, we also protect Huber’s good name.

While trademarks differentiate our products as being produced by a Huber business, they serve another purpose in the global marketplace: they assure our customers that they are dealing with a company that adheres to the highest ethical standards.

Behaving ethically within our own business tells our customers that they can expect us to apply the same protective measures to their business. For example, last year, CP Kelco developed a new carboxymethyl cellulose product. Our ability to come up with the product was based on years of interaction and collaboration between CP Kelco’s technical staff and the customer’s team. In these situations, we need to protect our intellectual property and the customer’s. To do so, we enter into strategic arrangements such as confidentiality, development and licensing agreements.

Creating an environment that protects and enforces Huber’s intellectual property rights—and recognizes the rights of others—helps Huber act responsibly and ethically.

©



Managing ethics on a global scale

As Huber extends its global reach and expands into emerging markets, the Principle of Ethical Behavior takes on even greater importance. This Principle guides how we conduct business while navigating a maze of geographic preferences, cultures, government requirements and business norms.

To address these challenges, Huber businesses took extra steps in 2012 to ensure employees adhere to the highest ethical standards everywhere we operate. For example, Huber Engineered Materials (HEM) developed a new compliance policy for the Foreign Corrupt Practices Act that reflects updates to recent changes in international laws. Also in 2012, CP Kelco created its Risk Management & Compliance Council (RM&CC) to ensure compliance with anti-corruption and anti-trust policies, as well as rules and regulations pertaining to international trade. The RM&CC develops policies, procedures and training programs related to global legal and regulatory risk.

As Huber extends its global reach and expands into emerging markets, the Principle of Ethical Behavior takes on even greater importance.

What does ‘being green’ really mean?

More and more companies tout their products as being “environmentally friendly” or “green.” Huber ensures its businesses have the proper documentation to support green claims such as energy-efficiency. Case-in-point: Huber Engineered Woods LLC (HEW) supports environmental claims for products like its ZIP System® by adhering to the Green Guides for the Use of Environmental Marketing Claims, which is published by the Federal Trade Commission, a US government agency. The ad pictured at left from HEW’s “ZIP It Tight” campaign for ZIP System® products adhered to the Green Guides and earned a Gold Award for Best Marketing Promotion at a competition honoring the best in marketing and advertising for the US building industry.

HEM exceeds its commitment to comply with regulations

Whether it’s antacids, calcium-supplemented foods or medicines, the Health & Nutrition business unit of Huber Engineered Materials (HEM) adheres to the highest standards to manufacture ingredients for the food and pharmaceutical industries. HEM’s plants in Modesto, California, and Quincy, Illinois, not only comply with all the regulatory requirements that apply to these industries, the two manufacturing sites go even further.

Both plants adhere to a host of regulations from the US Food and Drug Administration (FDA) in manufacturing HuberCal® calcium carbonate powder and HuberCal® granulated calcium carbonate. For example, they follow current Good Manufacturing Practice (cGMP) for dietary supplements and finished pharmaceuticals. The calcium carbonate plants don’t stop there. They also undergo voluntary audits, which have earned the sites several distinctions, including:

• The Grocery Manufacturers Association Supplier Assessments for Food Excellence.

• The highest rating from the American Institute of Baking International organization.

• Global Food Safety Initiative Certification (GFSI) for the Quincy plant. GFSI focuses on the continuous improvement of food safety management systems.

Respect for People

Huber values employee

diversity and superior

teamwork. Employees will

receive honest feedback,

recognition for their

accomplishments, and

opportunities for individual

learning and development.

Huber will create a workplace

where employees share our

core values, show dignity and

respect toward others, and

work hard to achieve their

best performance.

As Huber expands its international presence, Respect for People

takes on greater importance. We strive to ensure that this

Principle transcends the many different cultures and countries in

which we operate.

While we respect the cultural differences around the world, we must hold steadfast to the Principle of Respect for People. It serves as the compass for how we conduct business and helps us create an atmosphere where Huber employees are recognized and appreciated. We demonstrate this in several ways:

• Rewards and recognition — We acknowledge the contributions of our employees through a wide range of initiatives. Chief among these is the annual Mike Huber Award, which is presented to the employee teams that best exemplify what it means to live by the Huber Principles. Huber and its businesses also recognize employees for achieving excellence in environmental, health and safety performance. In addition, employees have opportunities to earn team awards and are acknowledged for their educational achievements.

• Learning and development — An unprecedented number of Huber employees took advantage of e-learning opportunities in 2012. Our online training programs help employees develop or enhance their business and software skills at no cost to their department.

• Workplace diversity — In 2012, we established a Diversity Council to strengthen our efforts to hire women and minorities across our operations.

• Respect for the communities in which we live and work — Our businesses and employees support important causes within the communities in which we operate. Our efforts range from assisting those affected by natural disasters to inviting students at public schools and universities to visit our facilities.

Respect for People is about making Huber a great place to work by having great people to work with. Our goal is to build an atmosphere of mutual respect and concern that creates pride among employees, strengthens our reputation and delivers superior business performance.

China plant celebrates women employees

Many countries celebrated International Women’s Day on March 8, 2012. In China, it is an official holiday for women, who get a half-day off from work. The Huber Engineered Materials plant in Qingdao marked the event by hosting an appreciation luncheon for the site’s female employees.



HEM celebrates the 60th anniversary of its first silica plant

Sixty years ago, a former whiskey distillery in Havre de Grace, Maryland, became the birthplace of Huber’s first silica operation. Today, the facility, which is operated by Huber Engineered Materials (HEM), is home to two manufacturing plants, a Technical Center for silica research and development, and a Pilot Plant for testing new silica applications.

HEM acknowledged the site’s 60th anniversary by inviting more than 140 employees, retirees and family members to gather at the plant on October 13, 2012, for a range of activities, refreshments and prizes. The event included plant tours, product demonstrations and fun activities for children.

Then & Now: All of those who attended the 60th anniversary celebration received postcards of how the Havre de Grace site appeared in 1952 and 2012.

Taking every opportunity to learn

Employees at Huber Engineered Woods LLC (HEW) learn about different aspects of the business at Lunch & Learn sessions hosted by their colleagues at HEW’s headquarters in Charlotte, North Carolina. About once a month, HEW employees volunteer to share knowledge across functions on a range of subjects. Past topics have included everything from production application engineering to stress management.

Then

Now

Winners of the second annual Mike Huber Award

Huber announced three winners of one of the highest forms of employee recognition within the company in 2013: the second annual Mike Huber Award. Teams from around the world competed for the prestigious honor, which recognizes those

employees who best exemplify what it means to live by the Company’s core values, the Huber Principles. The award is named for the late Mike Huber, who served as President and CEO of the J.M. Huber Corporation from 1957 to 1990 and a member of the Huber Board of Directors until 2000.

The winners of the 2012 award represent each of the Company’s three engineered materials businesses: Huber Engineered Materials (HEM), CP Kelco and Huber Engineered Woods LLC (HEW). The Huber Management Council narrowed the original field of 40 entries down to six nominees and selected a Gold, Silver and Bronze winner. These selections were shared with the Huber Board of Directors.

HEM in Bauxite, Arkansas, earned the Gold award. The team’s entry delivered on all four of the Huber Principles in transitioning the assets of the specialty hydrates flame retardants business of Almatis, Inc., to HEM in 2012. The team had to overcome major obstacles to make this transaction a reality. The effort required transitioning customers and employees who had been with Almatis to HEM’s Fire Retardant Additives business unit and solving operational issues that required separating a facility within a larger plant complex that shared infrastructure and people.

The Silver award went to CP Kelco in Äänekoski, Finland, and the Kelco Oil Field Group in Houston, Texas, for their commitment to teamwork, customer focus and operational excellence. Their efforts led to the fast-track development and commercialization of a new carboxymethyl cellulose (CMC) product for oil and gas operations. The initiative involved CP Kelco’s senior leadership, as well as its plants in Äänekoski and Taixing, China.

A HEW team earned the Bronze for its successful closure of the Whites Creek facility in Spring City, Tennessee. Due to the US housing downturn, HEW had to realign its plant capacity with lower demand and closed its Whites Creek plant at the end of 2011. A transition team from HEW’s locations in Whites Creek; Broken Bow, Oklahoma; and Charlotte, North Carolina, established practices to ensure that the plant remained a viable option for future operations. The team also moved production and business from Whites Creek to Broken Bow, while increasing sales.

The team from HEM in Bauxite, Arkansas.

In the two years since the inception of the Mike Huber Award, more than 80 teams have submitted entries for the opportunity to be considered for the prestigious honor.



Developing the next generation of Huber leaders

Grooming the next generation of leaders is a priority across Huber’s businesses. That’s why the Company invests in employees by providing training, mentoring and opportunities to develop leadership skills. To formalize this effort, Huber businesses hold Leadership Candidate Development (LCD) meetings that bring together participants from around the world.

In 2012, CP Kelco conducted two LCD meetings: a four-day gathering for 30 high-potential managers from its Americas Region, which took place in Washington, DC; and a three-day conference in Shanghai, China, that brought together 17 participants from six countries in the Asia Pacific Region. The conferences help managers broaden their skills as leaders while also providing opportunities to address CP Kelco’s real-world issues.

Employees at Huber Engineered Materials (HEM) who participate in Huber’s Leadership Development Program (LDP) also had an opportunity to hone their skills. In all, 45 employees from Belgium, China, Finland, India, the Netherlands and the US, gathered in Asheville, North Carolina, for a four-day conference to learn about leadership from outside experts, Huber leaders and each other.

Employees from six CP Kelco locations in the Asia Pacific Region gathered for a Leadership Candidate Development meeting in Shanghai, China, in September 2012.

The Company invests in employees by providing training, mentoring and opportunities to develop leadership skills.

Excellence

Huber will achieve competitive advantage through customer focus and operational excellence. Customer intimacy and innovation will drive successful new product development and commercialization. Our operations will apply learning and best practices to excel at process engineering, product quality, productivity improvement, supply chain management and customer service.

Given the diversity of Huber’s businesses, many factors must

be taken into consideration to evaluate our performance

against the Principle of Excellence. Across our organization,

we use three key metrics to provide insights into the numerous

efforts we have in place to drive excellence:

• Quality — Huber has adopted many Quality Assurance and Quality Control initiatives to ensure that we deliver the finest products to our customers—and their end customers. Whether it’s cosmetics or a specialty engineered wood, an ingredient used in pharmaceutical products or food products, we have the processes in place to produce quality goods every step of the way.

• Productivity — This can be the toughest attribute to measure across Huber. We use EBIT Productivity to gauge our progress everywhere we operate. (EBIT stands for “earnings before interest and taxes,” and is also known as earnings.) This measure can vary significantly due to the differences in the cost of doing business in various parts of the world. In today’s challenging economic climate, we are constantly identifying ways to improve productivity so we can produce the quality products our customers depend upon—while holding down costs.

• Innovation — Innovation is the lifeblood of Huber’s businesses. By determining how much of our sales come from new products each year, we can use this metric to evaluate how well our businesses are commercializing products.

While our Principle of Excellence focuses on many aspects of our business, the metrics of Quality, EBIT Productivity and Innovation tie into all of these areas. Together, they provide a snapshot of how our businesses are performing in the most crucial facets of our operations.

Expanding capacity for calcium carbonate granulation

In May of 2012, the Health & Nutrition business of Huber Engineered Materials (HEM) completed construction and began operations of its new calcium carbonate granulation facility in Quincy, Illinois. The team in Quincy attributed its successful start-up to collaboration between employees at the Quincy site and HEM’s plant in Modesto, California. Both sites manufacture granulated calcium carbonate that must adhere to the high standards of the food and pharmaceutical industries.

The Quincy location gives HEM additional volume to complement its Modesto facility. It also provides new opportunities to serve other parts of the US by providing faster and more economical delivery options.

The plant in Quincy, Illinois, features state-of-the-art equipment.



Cutting down on downtime

The Huber Engineered Woods LLC (HEW) plant in Commerce, Georgia, had to undergo frequent start ups and shut downs to align with customer demand during the downturn in the US housing industry during the past few years. This created increased costs, such as wear and tear on equipment and downtime related to continuously heating and cooling the plant’s press.

To address these issues and drive operational excellence, a cross-functional team from Commerce has been working together to set priorities, coordinate between managers and initiate action items to reduce costly downtime and improve productivity. The team continues to meet daily to discuss safety, quality and the prior 24 hours of production. This has led to process improvement meetings in which employees have helped identify recurring issues, as well as come up with ideas on how to cut downtime.

As the housing market began to improve in 2012, the steps taken by the Commerce employees, such as using down periods to maintain and repair equipment and systems, helped the plant perform with peak efficiency.

The staff of the Maintenance Department at HEW’s plant in Commerce, Georgia, helped reduce downtime at the site.

Excellence in action at Crystal Hill, Virginia

In 2012, Industry Week magazine, a leading manufacturing publication, selected the Huber Engineered Woods LLC (HEW) plant in Crystal Hill, Virginia, as part of its Excellence in Action Series. The plant was featured in Industry Week and commended for its achievements. Within Huber, Crystal Hill has been recognized for Outstanding Environmental, Health & Safety Performance in both 2011 and 2012.

In addition to honoring homes that use HEW’s products, Builder magazine rated AdvanTech® subflooring #1 in quality for the 12th consecutive year.

Recognition for innovation in homes built with HEW brands

The 2012 Builder’s Choice Design and Planning Awards honored five construction projects that used premium brands from Huber Engineered Woods LLC (HEW), including AdvanTech® subflooring and ZIP System® sheathing products.

The annual competition, which is conducted by Builder magazine, recognizes excellence and innovation in architecture, design and community planning. In choosing the honorees, the judges look into all the details, including the building materials used in the construction. HEW’s plants in Easton, Maine, and Crystal, Virginia, supplied HEW products for use by the following winners:

• Highland Meadows in Weston, Massachusetts — a series of 69 attached and detached condominium homes.

• TerraHaus at Unity College in Maine — On-campus student housing that’s more like a shared apartment and reflects Maine’s heritage.

• Woodlawn Neighborhood Center in Belvoir, Virginia — This recreation center ties together a community of military housing and draws inspiration from a nearby home designed by famed architect Frank Lloyd Wright.

• Cobblestone Cottages in Plymouth, Massachusetts — Retro-looking “fish shacks” common to the area make use of HEW’s modern-day materials for comfort and efficiency.

• Nonquitt Cottage in South Dartmouth, Massachusetts — HEW’s panels allow this home to earn points toward LEED certification (Leadership in Energy and Environmental Design) because the products control air and moisture penetration, which helps reduce energy use and improves air quality.

With stricter building codes and the growing demand for energy-efficient home, builders are making HEW’s premium brands part of the design process from the start.

Training on global Quality Management Systems

CP Kelco’s manufacturing facilities continued to implement quality training and raise employee awareness around its global Quality Management System (QMS) in 2012. Two CP Kelco facilities in Europe launched training programs for employees: the Foodgums plants at Grossenbrode, Germany, and Lille Skensved, Denmark. As a follow-up to the training, each site developed a plan to ensure it is in compliance with CP Kelco’s Quality Improvement Standards and its Vision for the QMS initiative. To evaluate the site’s adherence to regulatory guidelines, a member of the QMS team works with an outside cGMP (current Good Manufacturing Practices) consultant to audit the facility.

This sign encourages employees at CP Kelco’s operations in Grossenbrode, Germany, to “Pay attention to the safe production of food that you yourself might enjoy.”



Driving quality across the supply chain

While employees at the plants of Huber Engineered Materials (HEM) work under exacting standards, contracted carriers handle transporting the product to the customer.

That makes those responsible for delivering HEM’s silica products to customers an important link in the supply chain.

Against this backdrop, HEM’s plant in Hamina, Finland, arranged a two-day training program for its employees, as well as the employees of RL-Trans—one of the largest contracted carriers that HEM works with in Europe for bulk deliveries.

Delivering silica presents more challenges than standard truck shipments of packaged products. It’s essential to follow key processes to ensure quality when bringing silica directly from HEM’s plant, into the truck and then into the customer’s storage areas. The goal of the training was to help the carriers understand why the quality checks and controls are so important. The group discussed the integrity of the entire process, including cleaning and inspecting the trailers, taking samples from bulk loads and other quality checks.

HEM employees from Hamina, Finland, with the driver from RL-Trans (far left), all play vital roles in ensuring the quality of HEM’s silica when it is transported to customers.

The goal of the training was to help the carriers understand why the quality checks and controls are so important.

A taste of innovation in Russia

A multinational beverage manufacturer invited CP Kelco to be one of only six suppliers to make presentations at its Innovation Day held in Moscow, Russia, in July of 2012. The purpose of the event was to identify new product ideas that could be implemented in 2013 and 2014.

CP Kelco employees from Moscow shared ideas with 60 representatives from the customer, including employees in marketing, brand management and new product development from Germany, Russia, the Ukraine, the Balkans and Turkey. The CP Kelco team provided samples of its product innovations, including drinks with suspended particles, foaming drinks, as well as squeezable and drinkable jellies.

CP Kelco’s local Food

Team in their Moscow office

with product samples they

demonstrated at an innovation

seminar held in the Russian

capital.

Productivity on the upswing at Okmulgee plant

Productivity at CP Kelco’s biogums plant in Okmulgee, Oklahoma, improved significantly in 2012 over 2011 thanks to an all-out effort that involved employees from the plant, as well as their colleagues in San Diego, California, and Atlanta, Georgia.

The volume of xanthan gum manufactured per hour at Okmulgee had dropped in 2011. To address this situation, the site launched a major productivity initiative. Working in collaboration with employees in San Diego and Atlanta, an improvement team from Okmulgee established performance measures and objectives for key steps in the manufacturing process. The team looked at every aspect of the process and identified opportunities for improvement. They also made changes to the process sustainable by implementing new training procedures and tracking key performance indicators on a frequent basis.

Results of the productivity effort have been impressive, with Okmulgee setting a new production record in May of 2012.

Employees at CP Kelco’s biogums manufacturing plant in Okmulgee, Oklahoma, give a thumbs up to the improvement in production runs. The site had another cause for celebration in 2012 as it marked its 35th anniversary.



New ingredient leads to new personal care products

Sometimes a new ingredient is all it takes to lead to a new product. That’s the case with a new skin care ingredient that CP Kelco developed in 2012 for the personal care sector. Called AquaMAX™ y-Polyglutamic Acid (y-PGA), this nature-based ingredient offers benefits that make it ideal for personal care products, including moisturizers and anti-aging creams.

To minimize development costs and expedite commercialization of the new product, CP Kelco identified promising technologies from a company in Korea that complemented its own research and development efforts. This proprietary technology helped form the basis of the new AquaMAX product line. The products, which are available in two grades, are being manufactured in Korea for CP Kelco.

AquaMAX products work extremely well as a moisturizing ingredient, not only capturing and retaining water, but also helping to improve the structural integrity of the skin. Several CP Kelco customers in China have already introduced products that incorporate AquaMAX y-PGA. CP Kelco also showcased the new line at the largest trade show in Latin America for the personal care segment: the FCE Cosmetique and Pharma show, which was held in Sao Paulo, Brazil, in May of 2012.

Employees discuss the launch of a new ingredient for use in moisturizers and anti-aging creams: CP Kelco’s AquaMAXTM y-PGA. The product was among the latest innovations featured at Latin America’s largest trade show for the personal care industry.

Huber and the CommunityWhether it’s a time of crisis

or any time, Huber and its

employees demonstrate

compassion for our neighbors,

both locally and globally. While

the Company cannot support

every good cause or respond

to every natural disaster,

Huber does contribute to relief

efforts within the communities

in which we operate. We

have built a culture of giving

back that is supported by our

Principles, our employees and

Huber family members.

HEW hammers home the importance of helping others

Employees at Huber Engineered Woods LLC (HEW) participated in a wide range of activities to support their local communities in 2012. Here are just a few of the many efforts that HEW supported:

• Habitat for Humanity — In 2012, employees from HEW’s headquarters in Charlotte, North Carolina, helped build two homes for deserving families through Habitat for Humanity, a charitable organization. HEW donated its ZIP System® roof and wall sheathing for the two homes and employees volunteered their time and rolled up their sleeves to install the materials.

• Showing support for local schools — HEW’s facility in Crystal Hill, Virginia, made a donation to the public schools attended by many of the children whose parents work at the HEW site. Crystal Hill employees presented the Halifax County Public Schools Education Foundation, Inc. with a donation to enhance educational opportunities for students, provide scholarships and grants, as well as purchase classroom materials.

• Making strides for the American Red Cross — Several employees from HEW’s operations in Easton, Maine, participated in a 5 kilometer walk (a little over three miles) or 10 kilometer run to raise money for the Pine Tree Chapter of the American Red Cross.

From production to pumpkins

A farmer in the Philippines relies on perlite waste (provided at no cost by CP Kelco’s plant in Cebu) to condition the soil and fertilize his pumpkins. CP Kelco uses perlite—a volcanic sand-like material—as a filtering aid in the production of carrageenan. After strands of the hydrocolloid are extracted from seaweed, the carrageenan juice is clarified through pressure filtration. As the liquid passes through the perlite, it leaves seaweed residue behind, eventually reducing the perlite’s effectiveness as a filter. Because the residue contains plant hormones, however, it’s useful in promoting the growth of many different crops—corn, vegetables, melons, root crops and flowers. Prior to developing this perlite recycling program, CP Kelco treated the material as a waste product, each year sending nearly 900 metric tons of spent perlite to an on-site dump.



Caroline Huber and Nature Conservancy State Director Barbara Brummer. PHOTO: New Jersey chapter of The Nature Conservancy

Huber honored with conservation award

In November of 2012, the Huber family and the Company received the inaugural Oak Leaf Award from the New Jersey Chapter of The Nature Conservancy. The award acknowledged Huber’s commitment to the environment and the protection of unspoiled lands, and was accepted on behalf of the family and Company by Caroline Huber, widow of former CEO Mike Huber.

The Nature Conservancy launched the Oak Leaf Awards to honor those who have made an exceptional impact on conservation. The Huber family earned recognition for generously supporting efforts to conserve natural treasures in New Jersey. It also recognized the Company for its longstanding dedication to environmental stewardship.

Huber family members have served as leaders of numerous conservation organizations in New Jersey, including the American Littoral Society, the Monmouth Conservation Foundation, New Jersey Audubon, New Jersey Conservation Foundation and the Pinelands Preservation Alliance.

In the spirit of giving

Huber employees based in Atlanta, Georgia, supported two charitable drives during the 2012 holiday season. Led by the CP Kelco Cares Committee, which encourages employees to assist those in need, participants from CP Kelco, Huber Engineered Materials and Huber Corporate functions pitched in to brighten the holidays for others.

The first effort collected new toys and fleece blankets, which were distributed to families who participate in the Cobb County Foster & Adoptive Parents Association. The second initiative involved a holiday food drive. Employees at the Atlanta office contributed enough food and paper goods to help the Atlanta Community Food Bank provide meals for more than 800 people.

Strong show of support for victims of Superstorm Sandy

When Superstorm Sandy cut a path of destruction through the Caribbean, the mid-Atlantic and northeastern US, as well as eastern Canada in October of 2012, Huber and its employees responded with donations to help those in need. Huber’s corporate headquarters in Edison, New Jersey, was directly affected by the largest Atlantic hurricane on record. The office was closed for a week due to a power outage in the area.

In the aftermath of the storm, Huber made a donation to the American Red Cross and encouraged employees to donate to the relief efforts by offering a second, matching contribution. Overall, Huber and its employees donated a total of $22,000 to the American Red Cross, the Hurricane Sandy New Jersey Relief Foundation and the HABcore low income housing initiative.

CP Kelco selected for training cluster in Denmark

As part of the manufacturing community in Denmark, CP Kelco’s facility in Lille Skensved took on an important role in 2012: the site was one of only six manufacturing companies to be selected to participate in the world-class employee project known as Medarbejdere i verdensklasse (MIV). Sponsored by Region Sjaelland (one of Denmark’s five regions), MIV is designed to ensure that Danish companies and their employees can take advantage of training that improves their professional and organizational abilities. The project brings together employees across a wide range of industries to work together and share key learnings. Ultimately, the region can use this information to create a best practice model for other Danish companies to follow and build organizations with world-class skills.

A young girl keeps herself warm with

a blanket from the American Red Cross at the Pine

Belt Arena in Toms River, New Jersey.

The Company and employees

contributed more than $10,000 to

Superstorm Sandy relief.

PHOTO: American Red Cross.


J.M. Huber Corporation

Edison, New Jersey, US — Global Headquarters

Dublin, Ireland — JMH Finance Corporation

Warner Robins, Georgia, US — Shared Transaction Services

CP Kelco

Atlanta, Georgia, US — Global Headquarters

Americas

Buenos Aires, Argentina — Office

Houston, Texas, US — Kelco Oil Field Group

Limeira, São Paulo, Brazil — Manufacturing (Pectin), Customer Support

Okmulgee, Oklahoma, US — Manufacturing (Xanthan Gum)

San Diego, California, US — Manufacturing (Xanthan Gum, Gellan Gum), R&D

Europe

Äänekoski, Finland — Manufacturing (Carboxymethyl Cellulose, CMC), Customer Support

Aberdeen, Scotland, UK — Kelco Oil Field Group

Genk, Belgium — Office

Grossenbrode, Germany — Manufacturing (Pectin), Customer Support

Leatherhead, Surrey, UK — Customer Support

Lille Skensved, Denmark — Manufacturing (Pectin, Carrageenan and Refined LBG), Customer Support, R&D

Moscow, Russia — Sales

Nijmegen, The Netherlands — Office

Paris, Levallois-Perret, France — EMEA Region Headquarters, Customer Support

Poznan, Poland — Sales

Asia Pacific

Shanghai, China — Asia Pacific Region Headquarters

Cheltenham, Victoria, Australia — Sales

Mumbai, India — Office

Seoul, Korea — Sales

Sibonga, Cebu, Philippines — Manufacturing (Carrageenan)

Singapore — Sales

Taixing, Jiangsu, China — Manufacturing (CMC)

Tokyo, Japan — Sales

Wulian, Shandong, China — Manufacturing (Xanthan Gum and Diutan Gum)

Africa

Zanzibar, Tanzania — Seaweed Procurement

Huber Engineered Materials

Atlanta, Georgia, US — Global Headquarters

Americas

Bauxite, Arkansas, US — Manufacturing (Huber Specialty Hydrates)

Etowah, Tennessee, US — Manufacturing (Silica)

Fairmount, Georgia, US — Manufacturing (Fire Retardant Additives, FRA)

Havre de Grace, Maryland, US — Manufacturing (Silica)

Kennesaw, Georgia, US — Manufacturing (FRA)

Marble Falls, Texas, US — Manufacturing (Ground Calcium Carbonate, GCC)

Marble Hill, Georgia, US — Manufacturing (GCC)

Marblehead, Illinois, US — Manufacturing (FRA)

Modesto, California, US — Manufacturing (Health & Nutrition)

Quincy, Illinois, US — Manufacturing (GCC and Health & Nutrition)

Europe

Hamina, Finland — Manufacturing (Silica)

Oostende, Belgium — Manufacturing (Silica)

Taavetti, Finland — Manufacturing (Silica)

Asia Pacific

Jhagadia, Gujarat, India — Manufacturing (Silica)

Mumbai, Maharashtra, India — Office

Qingdao, Shandong, China — Manufacturing (Silica)

Huber Engineered Woods LLC

Charlotte, North Carolina, US — Headquarters

Broken Bow, Oklahoma, US — Manufacturing

Commerce, Georgia, US — Manufacturing, Innovation Center

Crystal Hill, Virginia, US — Manufacturing

Easton, Maine, US — Manufacturing

Whites Creek, Tennessee, US — Manufacturing

Huber Resources Corp

Old Town, Maine, US — Headquarters

Demica, Ltd.

London, England, UK — Headquarters

Huber locations around the world

J.M. Huber Corporation499 Thornall Street8th FloorEdison, NJ 08837-2267

www.huber.com

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