AG & VR - Oct 29th, 2008 1

Packaging: The Sustainable Market Case

Grant Duguid (Dow Chemical, Spain)

Date :

Title :

Speaker :

Thursday 30 October 2008

®™* Trademark of The Dow Chemical Company ("Dow") or an affiliated company of Dow

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Outline

Today’s Reality

For Better Understanding

Dow Approach

Sustainable Business Examples

Shaping Future Success

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It’s all around us . . .

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. . . Also in the packaging market

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What does sustainability mean to you?

Is made from a material that is grown

Is recyclable

Has been recycled

Results in no air pollution

Has the potential to be reusedIs bio-degradable

Is made using renewable energy

Generates zero landfill wasteMinimizes water usage

Lasts a long, long time

Creates no greenhouse gases

Protects human healthHelps to minimize food loss

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What does sustainability mean to you?

All attributes are valid and valuable

However, NOT ONE solution meets every single

possible criteria for sustainability

Sustainability is a journey, not a destination

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Fact or Fiction?

Macro Drivers of the Future feeding the

Sustainability debate

World population explosion 8 billion+ by 2030

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Fact or Fiction?

Macro Drivers of the Future feeding the

Sustainability debate

Energy crisis world consumption may double

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Fact or Fiction?

Macro Drivers of the Future feeding the

Sustainability debate

Climate change equatorial regions become deserts

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Fact or Fiction?

Macro Drivers of the Future feeding the

Sustainability debate

Globalization can pull a billion people out of poverty

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Fact or Fiction?

Macro Drivers of the Future feeding the

Sustainability debate

Revolution in medicine life expectancy up to 130

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Fact or Fiction?

Macro Drivers of the Future feeding the

Sustainability debate

Exponential technology developmenta century of progress in the next 25 years

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Brand owners

Converters

Raw material suppliers

NGOsLegislators

Consumers

Value Chain Drivers�Business Success

�Cost

�Brand image

�Reputation

�Social responsibility

MediaConsumer organisations

Retailers

Sustainability

The ongoing pressure cascading down the value chain

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The industry’s options

REACTIVE / DEFENSIVE

Talking

Protecting current business

Preventing Negative legislation

Business Loss Threat

PROACTIVE / OFFENSIVE

Listening

Dialoguing

Understanding the market

concerns of the future

New Business Opportunities

Value Chain Response

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Our approach - Full life cycle thinking

Consumers, Retailers

BO’s, Converters

Raw Mat providers

SoureSource: UNEP

= key to development of

sustainable solutions

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ELEMENTS

Materials recovery

Environmental footprint

Package optimization

Product protection

(Consumer requirements)

Economics

METRICS

Recycle, waste management (degradability, litter, …)

CO2 (~GHG emissions), water, energy, mass of raw materials, scarcity of materials

Down-gauging, others

Shelf life extensionFood waste

Cost

Developing Sustainability Dossiers linked to specific packaging projects

Life Cycle Thinking – Metrics

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The Opportunity for the Packaging

IndustryMaximizing the capabilities down the packaging value

chain

to drive for more sustainable solutions

based on innovation

leading to differentiation

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Life style

• New food preparation revolution - healthier eating easier than ever

• The search for sensory pleasure is reaching new extremes

• Demand for traceability and authenticity

• The human touch is more important than clever technology

• Increased demand for packaging functionality and convenience

Cost

• Plastics are precious, due to new highs in oil prices

Environmental concerns

• Regulatory developments

• Minimization of packaging

Market Drivers Demanding Innovation

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Total

Energy

(MJ)

Process GHG

(kg CO2 eq)

Landfill

Discards

(g)

62.5

1489.5

0.257

1.95

Pouch

Glass Bottle

Package Type

16 oz

16 oz

Content

6.02

30.9

Impact per 2,830 g (100 oz) Salsa

Market Case Example - Stand Up Pouches

Waste recovery: -96%

GHG: -87%

Energy: -81%

Source: ULS Report, February 2007

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mPE Sealant Solutions for Liquid Board Packaging to

� Reduce Coating Weight (over 30%)

while improving productivity keeping equal / better pack integrity

Technology Example - Brick Pack

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Juice Brick Pack: Old versus New

0.8812.1821.751 litreNew

Total Energy

(MJ)

Process GHG

(g CO2 eq)

Material

Resource

requirement

(g)

22.75 14.26Old

Package Type

1 litre

Contents

0.96

Waste recovery: -4.4%

GHG: -14.6%

Energy: - 8.2%

Source: Dow 2008

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Total

Energy

(MJ)

GHG

(g CO2

eq)

Landfill

Discards (g)

52.5

607.9

0.118

0.586

Bag-in-Box

Glass Bottle

Package Type

3.0 L

0.75 L

Contents

2.08

8.82

Impact per 2.95 L (100 oz) Beverage

Energy

GHG

Landfill

Discards91%

76%

80%

Reduction

• Discards = package mass – recycle stream

• Glass assumptions

― No recycled content, 20% returns to recycle stream

• Paper assumptions

― No recycled content, 30% recovered to recycle stream †

• Data sources:

― Paper: Environmental Defense- www.papercalculator.org

― Glass and Plastics: Boustead Model v5• †From The ULS Report, February 2007

Wine: Traditional Bottle versus Bag-in-Box

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Technology Example - PE from Sugar cane

LLDPE

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VERSIFY*

Solution

PE

STYRON

Products

Plasma

Coating

Technology

Platforms

Dispersions

Foaming

Polymer

ConversionCast

Film

Foam

Coextrusion

Fabrication

Technology

Application

Technology

Food

Rigids

Industrial

Markets Cosmetics

Flexibles

Material

Science

Connecting for the Future

InnovationInnovationInnovation

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The Way Forward

• Dialogue

• Connecting sustainability and innovation in real

practical business case examples/opportunities

• Developing joint innovation programs applying

agreed sustainability criteria

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Thank you

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Back-up Slides

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SPC’s Definition of Sustainable Packaging• Is beneficial, safe & healthy for individuals and communities

throughout its life cycle;

• Meets market criteria for performance and cost;

• Is sourced, manufactured, transported, and recycled using renewable energy;

• Maximizes the use of renewable or recycled source materials;

• Is manufactured using clean production technologies and best practices;

• Is made from materials healthy in all probable end of life scenarios;

• Is physically designed to optimize materials and energy;

• Is effectively recovered and utilized in biological and/or industrial cradle to cradle cycles.

Source: The Sustainable Packaging Coalition, www.sustainablepackaging.org

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Sustainable =

maximizing performance while minimizing the total

combined use of scarce resources --- life cycle thinking

Resin PerformanceProperties & Processability

Options for

Improving

Sustainability

Resource OptimizationMinimizing Energy Usage

Minimizing Environmental Impact

Using Renewable Raw MaterialsNew

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Life Cycle Thinking involves:� the use of products to provide services to end users

� the entire chain of consecutive and interlinked stages, from raw material acquisition to final disposal, that is needed to deliver those products

Has the goals of:� reducing the resource use and emissions to the environment from the

provision and use of products

� optimizing the socio-economic performance throughout the value chain

And requires:� dialogue and cooperation amongst all members of an entire value chain

Life Cycle Thinking - Definition