Ingeo™ Innovations

Providing Ingenious Solutions through Collaboration Brian S. Glasbrenner NatureWorks LLC [email protected] 952-742-0568

Sept 18th, 2009

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1 Consumers expect retailers and brands to take small steps on their behalf to provide them with more environmentally friendly products.

Biopolymers can transform packaging from a functional commodity cost item to a differentiable marketing feature.

• Truth in Marketing • Not Green washing

2 Why Bioplastics?

Environment

Net GHG emissions equivalents (CO / kg polymer) Economics 2

$1.00 $150 IngeoNGT

0.8

$130 Po lyp ro pylene $0.90 LDPE 1.9

PET am 2.1 $110 $0.80 PET ssp 3.2

Polystyrene GPPS 3.4

3.4 $90 Polystyrene HIPS 3.4

$0.70 Polycarbonate 7.6

USD/Lb $70 Nylon 6 PET NA USD/Barrel 7.9 Nylon 6,6 7.9 $0.60 $50

$0.50 $30 WTI Oil

$0.40 $10

2000Economics2001 2002 of:2003 2004 2005 2006 2007 2008 • Oil- vs. Plants feedstock • Waste Management • Global Warming

3 Need for innovation? Approximately 2.5 billion barrels of oil are used for plastics.

"It is estimated that 4% of the world's annual oil production is used as a feedstock for plastics production and an additional 3-4% consumed during manufacture." *

According to the EIA (Energy Information Administration) in 2008 the world produced 31.2 billion barrels of oil. **

* http://www.wasteonline.org.uk/resources/InformationSheets/Plastics.htm ** http://tonto.eia.doe.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=5&pid=53&aid=1

4 Why bioplastics? …ECONOMICS $1.00 $150

$130 $0.90

$110 $0.80

$90 $0.70

USD/Lb $70 USD/Barrel PET NA $0.60 $50

$0.50 $30

WTI Oil $0 40 $10 2000 2001 2002 2003 2004 2005 2006 2007 2008

Economics of: • Oil- vs. Plants feedstock • Waste Management • Global Warming

5 The Future?

“$4 per Gallon Gas Prices Affecting Entire Nation” U.S. News and World Report – June 2008 6 Who We Are . . .

• Established in 1997 with JV between Cargill & Dow Chemical Company

• 100% owned by Cargill Inc

• .Strong Technology Position (global IP portfolio)

• World’s first and largest bio-plastics manufacturing facility

– 140,000 metric ton name plate capacity

– 2nd production line operational by 1Q-2009

• Technology can be found today for more then 20 applications , in more then 70,000 store shelves around the globe under the Ingeo™ brand name

7 Converter Partners

Carbon dioxide and water

Plants

sugar manufacturing (dextrose) 8

8 plants We believe in the 4R’s 100% annually -Renew -Reduce renewable resources -Reuse -Recover (multiple options)

recovery science industrial plant sugars composting transformed into Ingeo™ chemical recycling

production environment Ingeo™ fibers and less fossil fuel natural plastics are use created climate less greenhouse gas emissions

9 Cheese & Yogurt Meat Eggs & Dairy Dry Grocery Dry Grocery Bakery Dry Grocery Dry Grocery

Frozen Produce

Deli

Checkout Floral and Gifts 10

10 Cheese & Yogurt Meat Eggs & Dairy Dry Grocery Dry Grocery Bakery Dry Grocery Dry Grocery

Frozen Produce

Deli

Checkout Floral and Gifts 11

11 • Performance

• Environmental Benefits

• Marketing Advantage

12 Evolving the IngeoTM eco-profile

Further future improvements associated with: • Production using cellulosic based feedstock FUTURE • Further process optimization • On site renewable energy (e.g. wind, biomass) Long term • Plant II (Not covered in this slide deck)

Ingeo 2009 represents the “Next Implementing Generation”, cradle-to-pellet Ingeo Now production system: Ingeo 2009 • Based on a package of technology improvements, e.g. new lactic acid technology. • Implementation started in 2009.

PAST We created an entirely new production system for polymers based on renewable resources. Ingeo 2005 represents the 2005 Ingeo in 2005 cradle-to-pellet Ingeo production system (= the benchmark).

13 A broader comparison Comparing environmental footprint: Greenhouse Gas Emissions PlasticsEurope ACC data

Ingeo in 2009 0.8

Ingeo 2009 - current technology 1.3 60% Reduction

Ingeo in 2005 2 from ’05 – ‘09 2 PVC (suspension) 1.9 1.4 Polypropylene 1.9 1.9 LD Polyethylene 2.1 75% Improvement 2.5 PET (amorphous) 3.2 over PET

PET (SSP) 3.4 2.8 Polystyrene (HIPS/G PPS Avg) 3.4

Polycarbonate 7.6

Nylon 6 9.1

Nylon 66 7.9

012345678910 from cradle to polymer factory gate in kg CO2 eq. / kg polymer

• Ingeo: Vink E.T.H. et all. The eco-profiles for current and near-future NatureWorks® polylactide (PLA) production. Industrial Biotechnology,

Volume 3, Number 1, 2007, Page 58-81. (GWP100 factors according to IPCC (CO2 =1, CH4 =23 N2 O=296) • PlasticsEurope; www.lca.plasticseurope.org • ACC: Franklin Associates, revised final report, December 2007, Cradle to gate life cycle inventory data of nine plastic resins, prepared for the Plastics Division of the American Chemistry Council.

14 A broader comparison Comparing environmental footprint: Non-renewable Energy Requirements PlasticsEurope ACC

Ingeo in 2009 35 Ingeo 2009 - current technology 42 30% Reduction from Ingeo in 2005 50 ’05 – ‘09 PVC (suspension) 59 64 Polypropylene 73 77 LD Polyethylene 77 49% Improvement 69 PET (amorphous) 80 over PET PET (SSP) 82 89 Polystyrene (HIPS/GPPS Avg) 87 Polycarbonate 113 Nylon 6 120 Nylon 66 138

0 20 40 60 80 100 120 140 160 from cradle to polymer factory gate in MJ / kg polymer

• Ingeo: Vink E.T.H. et all. The eco-profiles for current and near-future NatureWorks® polylactide (PLA) production. Industrial Biotechnology, Volume 3, Number 1, 2007, Page 58-81. • PlasticsEurope; www.lca.plasticseurope.org • ACC: Franklin Associates, revised final report, December 2007, Cradle to gate life cycle inventory data of nine plastic resins, prepared for the Plastics Division of the American Chemistry Council. 15 A broader comparison Comparing Environmental Footprints: Total Water Use

Ingeo target 9720 11 Ingeo 2009 - current technology 17 21

Ingeo in 2005 321721 • Ingeo: Vink E.T.H. et all. The eco- profiles for current and near- 9 PVC (suspension) 56 Process water future NatureWorks® polylactide (PLA) production. Industrial Polypropylene 5 38 Biotechnology, Volume 3, Cooling water Number 1, 2007, Page 58-81. LD polyethylene 3 44

PET (amorphous) 5 61 Irrigation water • Fossil based polymers: PlasticsEurope; PET ( SSP) 5 57 www.lca.plasticseurope.org PS (HIPS/GPPS average) 10 129

Polycarbonate 14 129

Nylon 6 14 177

Nylon 66 167 495

0 100 200 300 400 500 600 700 Water use [kg / kg polymer ]

16 Our Journey With “End of Life” Ca DOC Grant for Sortation 09 20 Primo Expanded Demonstration EU Based Lactic Acid Test FCR first results 08 20 Dirty Bale Test NRC Update Primo Demonstration Education Model Vision statement 07 20 NRC Meeting Denver RONZ PSO/Good Water Webinar on LCA

Telluride 06 NRC Meeting Atlanta 20 PETCore Tech Comm. NGO Meeting in Blair Bale Spec announced APR Meeting 05 NRC Meeting Minneapolis BIOTA Launch Sortation test w/TiTech 20 Oakland Coliseum EU NGO Meeting NGO Meeting in SFO 04 Composting certification APR Meeting 20 SEED Development 3 00 2 Industrial Recycling in Blair SPC Formation Meetings

17 NatureWorks LLC Efforts within SPC • Sustainable Packaging Coalition - http://www.sustainablepackaging.org/index.htm • NatureWorks LLC is one of six founding members of the SPC • Active member in general membership • Active member in the labeling subcommittee SPC’s Labeling Project will consist of two phases, the first of which is covered in this Brief: • Creation of visual communication concepts for a “Label” with the intent of conveying to consumers what they should and should not do with packaging after its use. • Eventual adoption with the hope that this information will shape consumer disposal & purchase habits and result in increased recovery of packaging materials. The SPC Labeling Project seeks to work with and receive feedback from retailers, industry, manufacturers, government, and waste/recyclables managers to eventually adopt the visual communication system that will be developed through the project. 18 NatureWorks LLC Efforts in Recycling

• Various group membership. – Association of Postconsumer Plastic Recyclers (APR) – National Recycling Coalition (NRC) – Sustainable Packaging Coalition (SPC) – Bioplastics Recycling Consortium member – Biodegradable Products Institute (BPI) – European Bioplastics Association EuPA) • NIR sorting at plant scale – PET stream purity – PLA stream isolation • Manual sorting technology development • Website materials – End of Life vision – Education for end of life • ASTM member and participation – Unique material code for PLA – ASTM D20, D20.95, D20.95.01 • End market development – Polymer grade lactic acid – Other applications 19 NatureWorks Efforts in Composting

• Standard guidelines for composting revolve around four basic criteria: – Biodegradation – Material characteristics – Disintegration – Ecotoxicity • Ingeo has been certified by BPI as compostable under the ASTM D6400-04 standard • Japan: – Ingeo has received certification under ISO 16929 through the Biodegradable Plastics Society of Japan • Europe – Ingeo has received DIN CERTO EN 13432 certification in Europe

20 The D20-95.02 Task Group . . .

The ASTM Organization ASTM

ASTM has D-20 ~ 130 committees ...... Plastics

D-20.95 D-20 Plastics, has . . . Recycled . . . ~23 Subcommittees Plastics

D-20.95.01 D-20-95-02 D-20.95 has established D-20-95-03 SPI Resin Code SPI # 7 SPI # 1 3 task groups Transfer (Sawyer) (Pecorini)

21 Does recycling immediately mean it is better? • Post Consumer Recycled PET

• Virgin Ingeo Biopolymer

22 Results for climate change

19.9 g Ingeo 38.6 Ingeo 2009 >35% Reduction Clamshell

100% rPET 58.6

19.9 g PET 71.5 50% rPET Clamshell

0% rPET 84.4

020406080100 CO2 equivalents / 1000 clamshells

US EOL: clamshell land filled after use Conclusions: •Even with a equivalent weight Ingeo™ clamshell, today’s virgin Ingeo™ is still 23 better than 100% rPET • Difference increases significantly if rPET content is less than 100%. Results for non renewable primary energy

Ingeo 2009 0.95 19.9g Ingeo Clam shell

100% rPET 1.1

19.9g PET 50% rPET 1.42 Clam shell

0% rPET 1.74

0 0.5 1 1.5 2 2.5 3 GJ / 1000 Clam shells US EOL: clamshell land filled after use

24 Our Plan is to use Ingeo™ film in our SunChips bag as our Launch Platform…

1/1/33 2/2/33 3/3/33

Printed Ingeo™ Degradable Adhesive Barrier Ingeo™ Compostable Renewable 2011

Renewable, Degradable Reduced GHG

XXL SunChips Targeting Targeting Nat’l Target P2, H2, 2009 2010 2009

Quaker Oats Introduces Ingeo™ Tamper Band for Its Iconic Rolled Oats Hot Cereal

New Bio-Based Tamper Band is First in the Cereal Category

Quaker Oats Company, a division of PepsiCo, the leader in the natural hot cereal category is leading the way to be more green by changing its plastic tamper band to Ingeo™ film.

By doing so, they are reducing the amount of greenhouse gases produced by over 468,758 pounds of CO2 or the equivalency of the emissions from a car driven 584,000 miles.

“Quaker is working to do its part in improving the environmental footprint of the PepsiCo family of products not only by reducing packaging but also by switching to more environmentally responsible materials like Ingeo™.” ConAgra is first to use recycled Ingeo™ (PLA) shrink film

Tamper-evident seals on Fleischmann’s, Blue Bonnet, and Parkay tubs Printed shrink labels for multipacks of Reddi-Wip® and PAM® cooking spray.

Sustainable benefits • Made from a renewable resource. Not petroleum-based. • Contains more than 50% post industrial content • Requires approx. 20% less energy to shrink the material. • Improved shrink performance - providing a higher-quality finished product • Produces less GHGs than traditional shrink films – Reducing GHG production by approximately 592,000 lb of carbon dioxide equivalents, the same as taking about 48 cars off the road per year. National Brands using Ingeo™ biopolymer as all or part of their packaging/product innovation. These brands can be found at almost all food retailers across North America:

• Frito-Lay - Sun Chip XL Bags • Con Agra - tamper bands on Parkay, Fleishman’s and Blue Bonnet margarines and shrink sleeves for multi pack Reddi Whip and Pam Spray oil • PepsiCo - Quaker Oats rolled oats hot cereals and Corn Meal • Bumble Bee Tuna - shrink sleeve for multi-pack • Gillette - shrink sleeve on combination packs (razor and blades) • Garnier - shrink sleeve on multi-packs of shampoo products • Proctor and Gamble - folded carton for Olay Definity product line and shrink sleeve for multi- pack stick deodorants • McCormick & Co. - shrink sleeve and tamper bands on cocktail sauce and other dips. • Microsoft - overwrap on xbox video game • Method - non-woven floor wipes • Sony - shrink sleeve for multi-pack discs • Green Mountain and Newman’s Own Organics - whole bean coffee bags • Sniffers - "Shake-Ins" - shrink sleeve on pet snack bottle • Tropiclean - shrink sleeve on pet shampoo bottle • Apple - i-tune gift cards

29 Why Innovate with Ingeo™?

Ingeo™ – made from plants not oil

• Demands of growing civilization and competition for limited resources, along with climate change, are driving an unprecedented need for innovation

• Oil-derived plastics are ubiquitous because of convenience and performance – but they tap a non-renewable resource

• NatureWorks has created an alternative - Ingeo™ - with specific performance attributes made from an annually renewable resource and provides a significantly better environmental footprint

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