2. Reflections on “Recycling Report©” Chandler Slavin Sustainability Coordinator Dordan Manufacturing Co. Inc.

3. 3 © 2010 Dordan Manufacturing, Inc. Dordan Manufacturing Co. Inc. Midwestern based, national manufacturer of custom designed thermoformed packaging solutions since 1962. Family owned and operated. Specializes in custom clamshells, blisters, trays and components for the consumer goods and electronics industries.

4. 4 © 2010 Dordan Manufacturing, Inc. Today’s Presentation Introduction: What is “recyclable” and why Part 1: The economics of recycling packaging in America Part 2: The state of blister/clamshell recycling in America – Supply and demand – Sortation – Contamination Part 3: Progress being made in recycling thermoforms – NAPCOR – APR – Retailers – SPI

5. 5 © 2010 Dordan Manufacturing, Inc. The Discovery Like many types of consumer packaging, thermoform containers are not recycled in 60% or more American communities; therefore, can’t be considered “recyclable” according to the FTC Green Guides.

6. 6 © 2010 Dordan Manufacturing, Inc. Dordan CEO’s Inquiry: If we manufacture our thermoforms out of PC PET bottles, then why can’t we recycle them with PET bottles?

7. 7 © 2010 Dordan Manufacturing, Inc. What types of packaging is recycled in America?

8. Municipal Solid Waste Generation, Recycling, and Disposal in the United States Detailed Tables and Figures for 2008 http://www.epa.gov/osw/nonhaz/municipal/pubs/ms w2008data.pdf

9. 9 © 2010 Dordan Manufacturing, Inc.

10. 10 © 2010 Dordan Manufacturing, Inc. “Recyclable” is… Only those types of package/material combinations that are collected post consumer, reprocessed and/or remanufactured in the “substantial majority of American communities” can be labeled “recycled and/or recyclable.”

11. 11 © 2010 Dordan Manufacturing, Inc. Why are certain types of packages recycled, while others are not?

12. 12 © 2010 Dordan Manufacturing, Inc. Part 1: The Economics of Recycling in America

13. 13 © 2010 Dordan Manufacturing, Inc. Economics of Recycling Those material/packaging types that are “easy” to: – Collect post-consumer – Transport – Sort – Reprocess – and, Remanufacture _________________________________________________ Enjoy the likelihood of being recycled because the cost of the resultant “recycled” material is competitive with the cost of virgin material/product production.

14. 14 © 2010 Dordan Manufacturing, Inc. Chicken and Egg There is no supply if there is no demand; there is no demand if there is no supply. A package/material type will not be collected for recycling if there is no buyer and/or end market for this recyclate; there will be no buyer end/market if there is not a consistent quantity and quality available for reprocessing.

15. 15 © 2010 Dordan Manufacturing, Inc. “Material/packaging type?” For a package to be recycled, it has to be of a specific material type, like PET, AND a specific packaging type, like screw neck bottle. It is only the correct combination of material and packaging type (i.e. PET screw neck bottles), which determines a packages’ ability to be recycled.

16. 16 © 2010 Dordan Manufacturing, Inc.

17. 17 © 2010 Dordan Manufacturing, Inc. Our Economic Framework for Understanding Recycling IF the cost of post-consumer collection, transportation, sortation, reprocessing and remanufacturing < The cost of virgin material/product production; _______________________________________ THEN it is likely that said material/packaging type is recycled or will be so in the future with proper investment.

18. 18 © 2010 Dordan Manufacturing, Inc. What does all this mean for the state of recycling thermoform packaging, like clamshells and blisters, in America?

19. 19 © 2010 Dordan Manufacturing, Inc. Part 2: The State of Blister/Clamshell Recycling in America

20. Section 1: Supply and Demand Considerations 20 © 2010 Dordan Manufacturing, Inc.

21. 21 © 2010 Dordan Manufacturing, Inc. Supply Considerations There has to be enough of a specific material/packaging type generated in the MSW stream to economically justify the collection and recycling thereof; and, “enough” is defined by the requirements of the buyer/end market. “Enough” is commonly referred to as “Critical Mass” in the industry.

22. 22 © 2010 Dordan Manufacturing, Inc. Example: PET Bottles According to NAPCOR, the total number of pounds of PET bottles and jars available in the U.S. for recycling in 2008 was 5.366 billion. This quantity achieves the critical mass necessary to economically justify the recycling of PET bottles in the context of material generation.

23. PET Bottle vs. Thermoform Generation While large quantities of PET bottles are manufactured each year, there are not as many clamshells of a single resin manufactured, which makes the collection of an adequate supply of this material/package type difficult; therefore, its recycling economically ambiguous in the context of material supply/generation. 23 © 2010 Dordan Manufacturing, Inc.

24. 24 © 2010 Dordan Manufacturing, Inc. Do thermoforms have Critical Mass? According to the American Chemistry Council, there has to be about 400 million lbs. of a particular plastic generated for the recycling to be profitable (Plasticstoday.com). Fortunately, 1.4 billion lbs. of PET thermoforms were produced in North America in 2008 (Ibid). As more thermoforms transfer from PVC to PET, more thermo-grade PET will be available for collection and reprocessing.

25. 25 © 2010 Dordan Manufacturing, Inc. Demand Considerations Demand for PC PET material in North America exceeds the supply 3:1. If PET thermoforms were integrated into the PET recovery stream, then more RPET would be available to meet the growing demand.

26. 26 © 2010 Dordan Manufacturing, Inc. Section 2: Sortation Considerations

27. Sorting Technologies There are two sortation systems employed at MRFs: – Visual/manual sortation : Workers on “The Line” pull the “recyclables” from those destined for landfill via visual cues inherent in the package, like screw top plastic bottle. – Automatic sortation: Deploy detection to analyze one or more properties of the plastic bottles passing through and automatically sorts these plastics into several categories, either by resin type, color, or both. 27 © 2010 Dordan Manufacturing, Inc.

28. 28 © 2010 Dordan Manufacturing, Inc. Visual Sortation? Bottles Easy to visually identify on “The Line” at a MRF by their thin necks and screw tops. Investment has been made in sorting bottles from those materials destined for landfill. Thermoforms Heterogeneous in size, shape, and material. Difficult to visually identify by material type as the move down “The Line” at a MRF. Little investment has been made in sorting technologies/processes.

29. 29 © 2010 Dordan Manufacturing, Inc. Sorting Technologies, the Economics of Recycling, and Supply and Demand A materials’ ability to be competitive after the cost of recycling depends, in large part, on the sortation technologies employed by the MRF. Many MRFs do not have automated sorting systems capable of sorting thermoforms by material type. A MRF will not make an investment in automated systems until the supply and demand necessary to sustain the process of recycling itself is guaranteed.

30. 30 © 2010 Dordan Manufacturing, Inc. Section 3: Specs and Baling Considerations

31. 31 © 2010 Dordan Manufacturing, Inc. Specs are… The documented qualifications a buyer/end market outlines to the supplier of PC material upon procurement. This depends on the end use of the recyclate: – If the buyer/end market is a bottler, the recyclate has to meet one set of specs; – if the recyclate is intended for thermoformed packaging, it has to conform to another; – and, if the recyclate is used in non-packaging applications like carpet, imitation timber, etc., it has to demonstrate compliance with another set of specs.

32. 32 © 2010 Dordan Manufacturing, Inc. Specs = Value of Recyclate The more stringent the specs: – The higher value the recyclate due to its application to many end markets; – The lower the concentration of contaminates; – The more likely the end market attempts to “close the loop.”

33. How do you bale thermoforms? Due to their differing densities, geometries, and often times materials, it is difficult to come up with a uniform bale for market, especially when no specs for thermoform bales exist. 33 © 2010 Dordan Manufacturing, Inc.

34. 34 © 2010 Dordan Manufacturing, Inc. In Summary… We need to create specs for recycling thermoforms, including specs for baling, which rests entirely on the end-market/buyer. However, no one will create specs for thermoform- only bales or PET thermoform & bottle bales if there is no buyer/end market; and, there will not be a buyer/end market if none of this material is available for resale.

35. 35 © 2010 Dordan Manufacturing, Inc. Section 4: Contamination Considerations for Recycling Thermoforms

36. 36 © 2010 Dordan Manufacturing, Inc. Approach to Recycling Thermoforms? There are three popular approaches to recycling thermoforms: – Recycle PET thermoforms with PET bottles to remanufacture into RPET bottles and/or thermoforms. – Recycle all PET thermoforms together to remanufacture into RPET thermoforms. – Recycle all mixed-resin thermoforms together to remanufacture into various down-cycled applications, like imitation timber.

37. 37 © 2010 Dordan Manufacturing, Inc. Isolate PET Bales for Highest PC Value Bales of a single resin, like PET, enjoy more PC value than mixed resin bales, described as a low-grade plastic mix. By recycling PET thermoforms with PET bottles OR recycling all PET thermoforms together, the resultant recycled material would enjoy a high PC value applicable to a variety of end markets.

38. 38 © 2010 Dordan Manufacturing, Inc. Approach taken informs what is a “Contaminant” If either approach is taken (PET bottles+PET thermoforms OR PET thermoforms only), then contamination issues need to be addressed.

39. 39 © 2010 Dordan Manufacturing, Inc. Known Contaminates to PET Recycling Barrier Resins(EVOH) Closures Labels Safety seals Container residue i.e. chemicals or food Look-a-likes like PVC, CPET, PETG, etc. Modified PET resins Multi-layer PET containers Colored PET

40. In conclusion The recycling of thermoforms depends on the ability to collect, transport, sort, bale, reprocess and remanufacture into new material/products in an economically competitive way with virgin material/product production. 40 © 2010 Dordan Manufacturing, Inc.

41. Part 3: Progress in Recycling Thermoforms 41 © 2010 Dordan Manufacturing, Inc.

42. NAPCOR 2009: NAPCOR facilitated the shipment of almost one million pounds of PET thermoforms to various reclaimers and end markets to understand the technical barriers keeping them from being recycled. NAPCOR and its partners discovered that adhesives used on food-grade thermoform packaging were too hard to remove during reprocessing, rendering the recyclate unmarketable; they found that berry containers from South America were turning the recyclate fluorescent; and, determined it was technically easier to recycling PET thermoforms with PET thermoforms than with PET bottles. 42 © 2010 Dordan Manufacturing, Inc.

43. APR March, 2011: APR issues bale specs for non-bottle rigids in hopes of increasing the amount of post consumer plastics collected for recycling and increase the amount of PC material available for domestic reprocessors. July 2011: Introduced new testing protocol for adhesives and labels used on thermoform packaging in conjuncture with NAPCOR. 43 © 2010 Dordan Manufacturing, Inc.

44. Retailers June 2011: Canadian grocery chains require clamshells suppliers to switch to PET by January 2012 in hopes of simplifying the waste stream, increasing the amount of thermo-grade PET available for reprocessing, and decreasing the likelihood of look-a- like contaminants like PVC. 44 © 2010 Dordan Manufacturing, Inc.

45. SPI July 2011: SPI in partnership with NAPCOR announces $100,000 grant for model PET thermoform recycling program; request for proposal available to US recycling program operators. The industry alliance is interested in establishing a model program for collection and reprocessing of PET thermoform containers. 45 © 2010 Dordan Manufacturing, Inc.

46. Thank you! Cslavin@Dordan.com Cslavin@Dordan.com 46 © 2010 Dordan Manufacturing, Inc.