1. The Paper Markets – 2009 Joanne Schweikert – Field Sales Sonoco Recycling

2.  Sonoco is a Paper and Packaging Company (not a gas station)  Founded in 1899 – NYSE Symbol “SON”  4 Billion in Sales last year  Recycle 3.5 million tons per year  30 Paper Mills Worldwide  Richmond Paper Mill located at 1850 Commerce Road  Virginia Recycling Plants located in Madison Heights and Fishersville

3. What Happened?  Last February OCC was $115 per ton, now cardboard is $25 per ton, what happened?  A sudden drop in demand from China caused the markets to plummet  Chinese mills had stocked up on paper anticipating a spike in business after the Olympics  The boom did not materialize, the global economy froze and Chinese mills were overstocked

4. What Happened?  Following the purchasing “freeze” in China was the month of December that set a record for mill downtime  Key phrase heard was “lack of generation” due to dismal Christmas retail season. This could lead to shortages of OCC and allow mills to use up excess inventory  At this time most mills are up and running with plenty of supply

5. February Update  OCC rose $5.00 to Southeast Yellow Sheet High Side of $25.00 per ton  Export prices are rising….why? China’s mills are struggling…why is export up?  Two reasons: Shipping rates are lower and OCC prices are a bargain  China is buying and warehousing, betting on a third quarter recovery  Sonoco’s market prediction (guess) is for $50 OCC Mid Year and $70 by Year End

6. Historic Southeast Yellow Sheet Prices JanFebMarAprMayJunJulAugSepOctNovDec Ave. 1995120150200 170140120705030 $ 123.33 199660 5040 45 60 $ 52.08 19976070 6560709012010080 70 $ 77.92 199875 6555 453530 $ 54.17 19993550 45659590 85 $ 68.75 20008595105115 105905545 $ 78.75 20014540 $ 40.42 200240 3545609013010075656050 $ 65.83 200350 6575 65 $ 65.00 2004658090 85 $ 85.00 200585 75 80 90 7560 $ 78.75 200655505565758510090857565 $ 72.08 20077095145120105 125135 125115 $ 117.50 2008115 125 120110 954525 $ 100.42 20092025 $ 22.50

7. Conclusion