Doing More with Less WPA June 2014 Newport

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Doing More with Less WPA June 2014 Newport Beach, CA © Copyright 2012 Muehlstein

Doing More with Less WPA June 2014 Newport Beach, CA © Copyright 2012 Muehlstein

Innovation Food Packaging Collation Shrink Heavy Duty Sacks Stand Up Pouch Lamination Films ©

Innovation Food Packaging Collation Shrink Heavy Duty Sacks Stand Up Pouch Lamination Films © Copyright 2012 Muehlstein 2

The road to more sustainable packaging solutions Novel Metallocene Resins Advances in Processing Equipment

The road to more sustainable packaging solutions Novel Metallocene Resins Advances in Processing Equipment Source: Exxon. Mobil Chemical Film Formulations © Copyright 2012 Muehlstein 3

Development Opportunities with m. PE Gauge reduction Performance Reformulation Enhancement Options provide value to

Development Opportunities with m. PE Gauge reduction Performance Reformulation Enhancement Options provide value to film producers and converters Source: Exxon. Mobil Chemical © Copyright 2012 Muehlstein 4

Defining the Development Options 1. Thinner gauge & equal performance as reference – Lowers

Defining the Development Options 1. Thinner gauge & equal performance as reference – Lowers the cost of the film structure to the converter – Enables downstream players to do the same with less weight of film (GAUGE) 2. Improved performance at equal gauge as reference (PERFORMANCE) – Delivers films with previously unattainable performance, resulting in more packs / minute, less failures, higher loads per pack, better display-ability, . . . 3. Maintain performance & gauge at reduced formulation cost – Lowers the cost of the film structure to the converter – No direct technical benefit for the downstream players (REFORMULATE) • Option selection dependent on application specifics, business chain structure, converter’s strategy. . . • Quite often Reformulation happens together with gauge reduction or performance improvements – i. e. people try to use as least of the new product to attain their downgauging or performance improvement goals 5 © Copyright 2012 Muehlstein 5

Technical Development Trends • Downgauging and/or performance improvements across the business chain have been

Technical Development Trends • Downgauging and/or performance improvements across the business chain have been driving increased use of LLDPE and m. PE • Coextrusion capability becomes more critical Coextrusion Multilayer 4+ layers g gin u a ng Dow peed grity s te Line ge in ty ka ili Pac ay Ab ost C pl Dis r Unit e Low 1 – 3 layers LDPE/ LLDPE rich Metallocene Polyethylene © Copyright 2012 Muehlstein 6

m. PE resins introduction Exceed™ and Enable™ m. PE resins form a unique portfolio

m. PE resins introduction Exceed™ and Enable™ m. PE resins form a unique portfolio that facilitates business opportunity expansion across the value chain. LDPE PROCESSING Improved toughness LDPE-r Blends Enable™ m. PE resin Processing credits LLDPE-r Blends C 4 LLDPE C 6 LDPE-r (75% LDPE + 25% LLDPE) LLDPE-r (25% LDPE + 75% LLDPE) C 8 Exceed™ m. PE resin PROPERTIES Source: Exxon. Mobil Chemical Exceed. TM and Enable TM are trademarks of Exxon. Mobil Corporation © Copyright 2012 Muehlstein 7

Effect of blend component on Exceed™ m. PE resin films Exceed m. PE /

Effect of blend component on Exceed™ m. PE resin films Exceed m. PE / Enable™ m. PE resin blends offer significant property improvement versus Exceed m. PE / LDPE resin formulations: • 1 mil (25 µ) monolayer blown film comparisons Similar extrusion conditions Exceed 1018 (1 MI, 0. 918 d) blends 0 - 20% LDPE (0. 75 MI, 0. 924 d) 0 - 30% Enable 20 -05 (0. 5 MI, 0. 920 d) • Dart drop impact – – LDPE Blends 800 Dart Drop Impact (g/mil) – – Exceed m. PE Blend Films - Dart Drop Impact 1000 600 400 200 Significant improvement (up to 300%) Significant drop-off in dart at > 5% LD addition 0 0 10 15 20 25 30 Exceed m. PE Blend Films - MD Elmendorf Tear 250 200 Elmendorf Tear (g/mil) 5% LDPE addition drops MD tear by 50% Little tear decrease with Enable 20 -05 addition 5 % Blend Component • MD Elmendorf tear strength – – Enable m. PE Blends 150 LDPE Blends Enable m. PE Blends 100 50 0 0 5 10 15 20 25 30 % Blend Component Data from tests performed by or on behalf of Exxon. Mobil Chemical Exceed. TM and Enable TM are trademarks of Exxon. Mobil Corporation © Copyright 2012 Muehlstein 8

Gauge reduction in Heavy Duty Sacks Year 1990 Trend line of - 3. 5

Gauge reduction in Heavy Duty Sacks Year 1990 Trend line of - 3. 5 % /year 1995 MONO Film LDPE LLDPE First 3 Layer Coextrusion 2000 LDPE LLDPE Introduction of Exceed m. PE Exceed/HDPE High clarity Technology MDPE Thickness 200 µm 2005 Exceed m. PE 2010 Exceed m. PE Introduction of Enable m. PE Exceed m. PE LDPE C 4 LLDPE Exceed m. PE HDPE LLDPE Exceed m. PE Enable m. PE 160 µm 140 µm 125 µm 100 µm Exceed m. PE HDPE Hardware development Product development Application technology development Exceed™ and Enable™ m. PE resins extended capabilities of 3 -layer technology Source: Exxon. Mobil Chemical Exceed. TM and Enable TM are trademarks of Exxon. Mobil Corporation © Copyright 2012 Muehlstein 9

New film equipment evolution 100 3 -layer Line Sales (%) 80 60 40 5

New film equipment evolution 100 3 -layer Line Sales (%) 80 60 40 5 -layer 20 monolayer 0 1990 2000 2010 2020 2030 W&H, EMCC estimates • 3 -layer growth extended by advent of new m. PE product introduction • 3 -layer approaching plateau growth during this decade • Interest in 5 -layer technology increasing rapidly supported by new products 5 -layer technology will become the new industry standard Source: Exxon. Mobil Chemical © Copyright 2012 Muehlstein 10

5 -layer technology capabilities The power of numbers : 5 -layer technology greatly expands

5 -layer technology capabilities The power of numbers : 5 -layer technology greatly expands design options. • Thick core layer with thin skin- and sub-skin layers • Enhanced film performance or additional down gauging through : – Introduction of specific functionalities in discrete layers – Increased flexibility through additional layer thickness combinations – Exploration of synergistic material / layering effect – Higher output by using layers of high melt strength materials Source: Exxon. Mobil Chemical © Copyright 2012 Muehlstein 11

Coextrusion Advantages • Coextrusion trend leverages product performance for improved film performance and value

Coextrusion Advantages • Coextrusion trend leverages product performance for improved film performance and value • The advantages of moving from 1 to 3 layers also apply when changing from 3 to 5 layers: – Better film properties through: Ø Pure materials in discrete layers Ø Sandwich effect Ø Broader choice of grades for a specific function – Additional formulation flexibility through increased number of layer as well as layer distribution options – High (higher) output – Downgauging–light weighting-sustainability © Copyright 2012 Muehlstein 12

Blown film developments in heavy duty sacks film 5 -layer polyolefin technology provides the

Blown film developments in heavy duty sacks film 5 -layer polyolefin technology provides the next breakthrough. Near Term DATASOURCE : EMC estimates Source: Exxon. Mobil Chemical Exceed. TM and Enable TM are trademarks of Exxon. Mobil Corporation © Copyright 2012 Muehlstein 13

Performance Boost in Coex Structure • Performance boost by increasing m. PE Mechanical Property

Performance Boost in Coex Structure • Performance boost by increasing m. PE Mechanical Property Index * dosage in coex structures. m. PE Dosage (%) • Diversified and tailored solutions offered by Exceed and Enable m. PE resins Exceed. TM and Enable. TM m. PE resins offer complementary options to tailor performance improvement and to create down gauge potential. © Copyright 2012 Muehlstein 14

Pallet Unitization • Lighter materials are now used instead of heavy • shrink/cardboard Metallocene

Pallet Unitization • Lighter materials are now used instead of heavy • shrink/cardboard Metallocene PE contribute to dramatic improvement in film toughness More sustainability flexible film solutions • Energy consumption reduced – Shrink oven removed with stretch • Higher packaging line throughput • Shrink hood Machine stretch wrap Stretch hood Source: Lachenmeier Denmark – Reduced sealing time Packaging weight reduction – 30% from shrink to stretch hood – Equivalent to 4 trucks* (or 105 tons of film) removed for a 500 kt/year plant – Further reduction with Stretch Wrap if outdoor storage not required • Exxon. Mobil Chemical estimates © Copyright 2012 Muehlstein 15

Food Packaging Stand-up Pouches Application • Laminated structures with PE • Metallocene PE provides:

Food Packaging Stand-up Pouches Application • Laminated structures with PE • Metallocene PE provides: – Excellent seal (shelf life) – Excellent toughness (puncture, package integrity) More sustainability flexible film solutions • Packaging weight reduction – Same quantity of product in one third of the material from blow molded liquid container to Stand-up Pouch (SUP) – Waste volume reduced accordingly Photos used are representative of potential product applications only Source: WRAP UK • Stand-up pouches offer more sustainable packaging solutions for high quality food and drink products © Copyright 2012 Muehlstein 16

Clarity shrink film - Cardboard tray packages Monolayer LD/LL blend reference • Enable™ m.

Clarity shrink film - Cardboard tray packages Monolayer LD/LL blend reference • Enable™ m. PE resin-based films offer • Unit cost and weight reduction • Lower logistics costs • More sustainable flexible film solutions • At a thinner gauge deliver • Equivalent toughness • Equivalent stiffness • Equivalent puncture • Improved clarity • Similar holding force Reference Enable. TM m. PE resin alternative 80 -50 µm – Monolayer 25% Downgauging – Monolayer 75% LD (0. 922 density) 25% C 4 LL (0. 918 density) 60% Enable™ m. PE 27 -03 (0. 927 density) 15% LD (0. 922 density) 25% HD (0. 961 density) Data from tests performed by or on behalf of Exxon. Mobil Chemical Example shown is 50 µm reference, 37. 5 µm Enable™ m. PE resin-based solution Exceed. TM and Enable TM are trademarks of Exxon. Mobil Corporation © Copyright 2012 Muehlstein 17

Mulch film solution Enable™ m. PE resin based films offer: 16 • Unit cost

Mulch film solution Enable™ m. PE resin based films offer: 16 • Unit cost reduction (28% gauge reduction) 300 0 0 • More sustainable film solutions • Significant improvement in tensile and dart 85 C 4 -LLDPE Ref (25μm) Mono. Layer Exceed. TM and Enable TM are trademarks of Exxon. Mobil Corporation 0 0 500 • Similar tear Data from tests performed by or on behalf of Exxon. Mobil Chemical 13 0 Enable m. PE solution (18μm) TM 80% C 4 -LLDPE (2. 0 MI, 0. 918 density) 20% LDPE (2. 0 MI, 0. 9225 density) 100% Enable 20 -05 CH © Copyright 2012 Muehlstein 18

Downgauging Opportunity • Enable™ m. PE resin blends with C 4 -LLDPE offer downgauging

Downgauging Opportunity • Enable™ m. PE resin blends with C 4 -LLDPE offer downgauging potential (lower unit cost) with improved film performance – Enable™ lean blends at 10% down gauge have >100% higher MD Elmendorf Tear compared to LDPE blends – Enable™ rich blends at 20% down gauge still outperform the reference film at most mechanical properties Enable™ m. PE 20 -05 CH resin: 0. 5 MI; 0. 920 g/cm 3 Enable™ m. PE 27 -05 CH resin: 0. 5 MI; 0. 927 g/cm 3 LDPE: 0. 75 MI; 0. 923 g/cm 3 C 4 -LLDPE: 1. 0 MI; 0. 918 g/cm 3 25% LDPE + 75% C 4 -LLDPE (50 µm) 75% LDPE + 25% C 4 -LLDPE (50 µm) 25% Enable™ m. PE 20 -05 CH resin + 75% C 4 -LLDPE (45 µm) 75% Enable™ m. PE 20 -05 CH resin + 25% C 4 -LLDPE (40 µm) 25% Enable™ m. PE 27 -05 CH resin + 75% C 4 -LLDPE (45 µm) 75% Enable™ m. PE 27 -05 CH resin + 25% C 4 -LLDPE (40 µm) Data from tests performed by or on behalf of Exxon. Mobil Chemical Exceed. TM and Enable TM are trademarks of Exxon. Mobil Corporation © Copyright 2012 Muehlstein 19

Downgauging Obstacles Possible obstacles ● Converter has perception that down gauging is less profitable,

Downgauging Obstacles Possible obstacles ● Converter has perception that down gauging is less profitable, as films are sold in $/ton. Resolution Potential benefits for brand owner Potential benefits for converter ● Down gauged films have a higher yield, which in most cases results in lower unit costs ($/m 2) ● Lower unit costs ($/m 2) are achieved as more packs are produced per roll of film ● Improved profitability, as lower unit costs justifies a higher $/ton price ● Lower unit costs are what ultimately matters to the brand owner. ● Lower unit costs can also lead to higher profitability for the converter. ● Lower inventory costs ● Being able to demonstrate lower unit cost savings to customer increases converter’s competitiveness, which opens up more opportunities. ● Converter has perception that down gauging leads to less production, which erodes profitability. ● Down gauging is only viable to the converter if (i) the $/ton return can offset production debits vs NBA, AND (ii) if the revised unit cost provides enough incentive for the brand owner to want to change. ● Converters steward their production mainly on the number of completed jobs and the amount of scrap produced - using less resin to achieve this is desirable, so down gauging is a potentially attractive solution. ● Brand owner has perception that downgauging dilutes end use performance. ● Brand owners need to be made aware of “less gives more” advantages of m. PE technology. ● If converter has difficulty selling the down gauging concept effectively to the brand owner, . EMC can help bridge the gaps through presentations, seminars, samples, brand owner meetings and sharing market trends. ● Lower inventory costs ● Completing job orders in less time results in utility savings (although need to consider the impact on scrap levels). Higher output is potentially achieved with Enable rich structures. ● More available extrusion capacity (i) allows possibility of filling spare capacity with more profitable job orders (ii) may delay the next extruder order, ● Down gauged m. PE solutions are better equipped to meet existing and future environmental legislation. ● Lower unit costs with the same but often superior performance. ● Superior m. PE sealing properties can achieve faster packing speeds in many cases. Investing in high line speed equipment is easier to justify with m. PE solutions, which can further reduce unit costs. ● Down gauged m. PE solutions are better equipped to meet existing and future environmental legislation. © Copyright 2012 Muehlstein 20

Outstanding Customer Value Potential benefits Integrated knowledge Novel Metallocene Resins CONVERTER PACKER / BRAND

Outstanding Customer Value Potential benefits Integrated knowledge Novel Metallocene Resins CONVERTER PACKER / BRAND OWNER Advances in Processing Equipment Film Formulations RETAILER / CONSUMER ü Cost ↓ ü Productivity ↑ ü Source reduction ü More productive operations ü Sustainability opportunities ü Improved consumer attention Metallocene resins open new avenues in packaging film Source: Exxon. Mobil Chemica l © Copyright 2012 Muehlstein 21

Contact Information Doug Laurent Phone: 920 -214 -3812 DLaurent@muehlstein. com © Copyright 2012 Muehlstein

Contact Information Doug Laurent Phone: 920 -214 -3812 DLaurent@muehlstein. com © Copyright 2012 Muehlstein 22