1. PAGE 1 FRP (Fibre Reinforced Plastic) Recycling - Manitoba 13 May 2009

2. PAGE 2 13 August 2008 Overview Background Information Recycling Processes for FRP Recycled Material Properties Possible Markets Business Model Options Conclusions Next Steps

3. PAGE 3 13 August 2008 Background Information FRP (Fibre Reinforced Plastic) scrap produced in large quantities across Canada Estimated that 700 – 800 MT/yr in Manitoba FRP trim and scrapped parts from production FRP in MB is glass reinforced thermosetting resin Cannot be melted and reformed as with thermoplastics Alternative recycling method is required Several unsuccessful attempts at developing recycling systems, based on two models: Regional recycling networks In-house recycling

4. PAGE 4 13 August 2008 Background Information Interest in finding solution for recycling from: Industry Government General public Potential economic and green benefits from recycling FRP Smaller environmental footprint Lower landfill costs Lower transportation costs to Landfill Possible revenue opportunities Project started in August 2008 to study potential FRP recycling solutions for Manitoba and Southern Interior BC

5. PAGE 5 13 August 2008 Background Information FRP Recycling Project – Milestones completed to date: Carried out research into FRP Recycling N.America/Worldwide Polled all FRP producers in regions, to obtain: Scrap Material Type and Quantity Cost of processing and landfilling scrap Obtained buy-in to the project from 9 of the 10 largest scrap producers in the regions Collected, sorted and ground their highest volumes of scrap Developed a business model and marketing database Analyzed all information and recommended further testing Currently: Organizing testing for next stage of project

6. PAGE 6 13 August 2008 Recycling Process Recycling Methods Available Combustion Fluidised Bed Process Pyrolysis Sub-Critical Water Hydrolysis Chemical Mechanical Energy Recovery Only Resin Oil and Fibre Recovery Energy and Fibre Recovery Fibre Recovery

7. PAGE 7 13 August 2008 Recycling Process Down-selected Mechanical Processing Most readily available process Most cost effective to start up and run Some proven use in FRP industry Can be considered more friendly to the environment No chemicals No high temperatures Low energy requirements

8. PAGE 8 13 August 2008 Recycling Process Mechanical Processing Equipment

9. PAGE 9 13 August 2008 Recycling Process 2 equipment suppliers selected Fibre Recovery Products, Winnipeg Seawolf Design, New Smyrna Beach, Florida 13 samples of the highest volume scrap collected 2 grades of fibres obtained from grinding Coarse material using 1/4” screen Fine material using 1/16” screen Total of 52 recycled samples obtained for MB (and a further 44 from SIBC) All samples were logged, photographed and bagged

10. PAGE 10 13 August 2008 Fine Grind 1/4” Screen Coarse Grind 1/16” Screen Scrap Material Recycled Material Recycling Process Mechanical grinding with screens

11. PAGE 11 13 August 2008 F-2 Discrete Fibres No Fibre Content Non-discrete Fibres / Low Quality Fibres E-1F-1F-3H-1 H-4I-2 I-3 Recycled Material Properties Sorted by Type G-1 H-2 I-1H-3 G-2 Scrap collected represents over 80% of FRP waste generated by MB companies

12. PAGE 12 13 August 2008 Markets Thermoset FRP Asphalt Thermoplastics LEED Building Products Cement Products

13. PAGE 13 13 August 2008 Parking stall curbs Construction barricades Temporary traffic barriers Vinyl siding additive Tooling material additive Insulation material Flow medium Aerating material Patio stones Garden ornaments Countertops Noise absorption material Viscosity modification of polymer mixes Hardwearing additive for road paint Recyclate and natural fibre mat material Blast medium for removing paint Wall/floor coverings Plastic wood products Roofing shingles Roofing asphalt additive Markets Other specific uses for recycled FRP

14. PAGE 14 13 August 2008 Markets Cement Additive Benefits: Proven plastic shrinkage reduction in Europe Large/very large volume market and varied products Encapsulates material so safer for future generations Can handle varied/imperfect materials and filler/resin/fibre mix Competes with value added products that charge a premium Risks: Cement degradation due to alkaline attack on glass fibers  possibility of leaving voids over time Supply too low for certain markets Need to certify material before any widespread use

15. PAGE 15 13 August 2008 Markets Thermoplastic Additive Benefits: Short fibres provide slight reinforcement Thermoplastic market is mostly unreinforced  property gains Process improvements demonstrated in Europe Medium to large market and varied products Can use short fibers and filler at high % loadings (30%+) Low risk of adverse chemical reactions with recycled material Risks: Surface quality of thermoplastic is reduced  limits market Lower value use of material than cement

16. PAGE 16 13 August 2008 F-2 Cement Thermoplastics E-1F-1F-3H-1 H-4I-2 I-3 Markets Preferred Applications G-1 H-2 I-1H-3 G-2 Flow Medium

17. PAGE 17 13 August 2008 Markets Scrap Quantities by Market (Metric Tonnes/Year) Note: Quantities assume 50% of recyclate is pure fibre  remaining is resin/filler

18. PAGE 18 13 August 2008 Business Model Options Assumptions for setting up FRP Recycling Mechanism Manufacturing companies are willing to pay the recycling company equivalent external costs per MT (transportation and tipping fees) Material price (conservative) and volumes (min/max) used are per table below Loan servicing and financing have not been taken into account Amortization, interest and taxes have not been analyzed

19. PAGE 19 13 August 2008 Business Model Options Standalone Recycling Facility FRP Company Shredder / Grinding Equipment Holding Bin Cement Company Short Fibre/Filler Thermoplastic Company $ Long Fibre/Filler $ $ $$$ Standalone Recycling Facility

20. PAGE 20 13 August 2008 Business Model Options Standalone Recycling Facility CM = Contribution Margin CMR = Contribution Margin Ratio

21. PAGE 21 13 August 2008 Business Model Options Standalone Recycling Facility Breakeven MT = > 450 MT / year Breakeven Revenue = $ 550,000

22. PAGE 22 13 August 2008 Business Model Options Shared Recycling Facility Cement Company Short Fibre/Filler Thermoplastic Company $ Long Fibre/Filler $ $ $$ Shared Recycling Facility FRP Company Shredder / Grinding Equipment Holding Bin

23. PAGE 23 13 August 2008 Business Model Options Shared FRP Recycling Facility CM = Contribution Margin CMR = Contribution Margin Ratio

24. PAGE 24 13 August 2008 Business Model Options Shared FRP Recycling Facility Breakeven MT = 345 MT / year Breakeven Revenue = $ 281,484

25. PAGE 25 13 August 2008 Business Model Options Preferred Option: Shared recycling facility Offset low volumes/downtime with another business that has facility space Existing recycling company Manufacturer Low set-up costs for someone to start FRP recycling Possible government grants/subsidies Potential for high revenue if material can be sold as a value added product Reinforcement material Green material

26. PAGE 26 13 August 2008 Conclusion FRP Recycling is technically feasible Proven uses in Europe However, technical risks  testing required to verify FRP Recycling has a market Cement and thermoplastics are preferred However, more markets are possible in the future FRP Recycling has a feasible business model Facility likely needs to be shared with another business However, good revenue stream could be possible

27. PAGE 27 13 August 2008 Next Steps Testing Initial testing with cement and thermoplastics – Jun/July 2009 Increase awareness of FRP Recycling Obtain support from industry/government/academia Develop relationships inside and outside Manitoba Investigate post consumer scrap (boats, canoes, tanks, etc) Develop business model and marketing data further Carry out a technology demonstration – Sep/Oct 2009 Develop Commercialization Plan for recycling – Dec 2009

28. PAGE 28 13 August 2008 CONTACT INFORMATION THANK YOU Will Darracott M.Eng Engineer, Composite Applications EIT CIC Contact Information: Website:www.compositesinnovation.ca Email: Tel No.: 204-262-3400 x208 wdarracott@compositesinnovation.ca