This document discusses driving carton recycling value chains. It notes that in 2016, 644,000 tons of packaging materials were invoiced in China, with 153,000 tons of used beverage cartons recycled. Recycling used beverage cartons faces challenges including low profit margins for collectors due to high transportation costs. China's ban on waste imports also impacts carton recycling by lowering waste paper prices and requiring investment in local recycling infrastructure.

1. Driving carton recycling value
chain
April, 2018 @Green Drinks Shanghai
Jiayu WAN

2. We commit to making food safe and available, everywhere
* All numbers refer to 2015
Number of Tetra Pak packages sold 184 billion
Number of packaging machines in operation 8,850
Number of processing units in operation 74,450
Countries where Tetra Pak packages are available >170
Number of employees 23,600

3. Offer solutions to guarantee safe food
UHT + Aseptic package
Temp °C
150
100
50
Pasteurisation
Indirect UHT
Direct
UHT
Time
Core Presentation/2016-0120 / 3
PAPER
75%

4. Offer solutions to guarantee safe food
UHT + Aseptic package
71% of Population
72% of Milk Sources
Source: 2010 provincial raw milk output
CDIA Documents
Best milk belt in northern
hemisphere:45°north latitude

5. Our commitment to sustainability is deep-rooted
Reducing food waste
Increasing food availability
Improving resource
efficiency
Our founder, Ruben Rausing,
was a firm believer that a
package should save more
than it costs.
When food is packaged, it can
be transported and made
available to consumers
everywhere in a safe, efficient
and affordable way

6. PROTECTS
WHAT’S GOOD
Environmental Excellence forms part of
our Sustainability approach
We are driven by our vision to make
food safe and available, everywhere.
Our innovative and market-leading
processing and packaging solutions are
making that vision a reality worldwide.
We make social responsibility a
priority when it comes to people. We
seek to support communities wherever
we operate and provide opportunities
for our employees around the world.
We strive to play an active role in
shaping a better future, supporting the
long-term success of our customers’
businesses and driving environmental
excellence across our whole value chain.

7. We work with industry organizations, non-governmental
and international organizations and several initiatives
Good governance is our fundamental
framework for achieving all our sustainability targets

8. Drive environment excellence of the value chain
Transportation
Product design
Packaging manufacturing
Filling
Recycling
Sourcing

9. We continue to drive environmental excellence
OBJECTIVES GOALS
Reduce environmental
footprint across the
value chain
2020 climate goal:
Cap climate impact across value
chain at 2010 levels
Develop sustainable
products
Renewable packaging goals:
100% FSCTM
-certified paperboard,
A 100% renewable package
Increase recycling 2020 recycling goal:
40% global recycling rate

10. Used cartons are not waste.
They are a valuable raw
material for new products.

11. We have a strong starting point
Average renewable content in carton packaging material today
accounts for 75%

12. Value chain impact in 2010*
Tetra Pak
Production sites, offices &
business travel
6%
Scope 1, 2, 3 of the GHG Protocol
Suppliers
Purchased materials
for packaging
& transportation
38%
Scope 3 of the GHG Protocol
End-of-life
Post-consumer cartons
not recycled or
recovered for energy
6%
Scope 3 of the GHG Protocol
Customers
Use of sold products –life-time impact
Processing equipment
Packaging equipment
50%
Scope 3 of the GHG Protocol
*2010 baseline data verified by a third party in 2015
Accounting based on GHG Protocol standards and guidelines for corporate and value chain climate accounting.

13. Effective separation and recycling of all layers
Turning used cartons into an asset
Pulp Products
RepulpingCollected
cartons
ProductspolyAl

14. We have mapped used beverage carton recyclers
globally
Active recycling in 43 countries
(trans-border shipments take
place in several markets)
Active polyAl
recycling in
24 countries

15. Key success factors to increase recycling
Increase consumer
awareness Support collection
& sorting infrastructure
Boost business
opportunities for
recycling entrepreneurs
Expand market
opportunities for
recycled materials

16. Increase consumer awareness
• Drive consumer campaigns
• Drive school programmes
• Partner with local organisations
We teach school children in Turkey
about recycling
Since the start of 2005, the
recycling awareness programme
“Little Things Renew Nature”
has been seen by over a million
children in Istanbul, Bursa
and Izmir.
Increase consumer
awareness Support collection
& sorting infrastructure
Boost business
opportunities for
recycling entrepreneurs
Expand market
opportunities for
recycled materials

17. Support collection and sorting infrastructure
Tetra Pak India forms waste dealers club
Tetra Pak India brought together
NGOs, recyclers, scrap dealers
and street waste pickers in Delhi,
India. As a result, the city now
has a waste dealers club
(Paryavaran Mitra) and the
process for collecting used beverage cartons has been
significantly improved.
Increase consumer
awareness Support collection
& sorting infrastructure
Boost business
opportunities for
recycling entrepreneurs
Expand market
opportunities for
recycled materials
• Connect collectors and recyclers
• Cooperate with key stakeholders

18. Boost business opportunities for recycling
entrepreneurs
Increased recycling in China
With development support from Tetra Pak, the
Chinese recycling company, Hangzhou Fulun
Ecology Technology increased its recycling
capacity from 20k tonnes of paper to 35k tonnes
(75% increase) in just under 10 years. They now
also recycle the plastic and aluminium (PolyAl)
from used beverage cartons, and sell it to plastic
recyclers and fireworks manufacturers.
Increase consumer
awareness Support collection
& sorting infrastructure
Boost business
opportunities for
recycling entrepreneurs
Expand market
opportunities for
recycled materials
• Recommend recycling solutions
• Support technological developments

19. Expand market opportunities for recycled materials
• Match recycled materials and market needs
• Promote recycled end-products
Roofing tiles in Brazil
Since 2000, we have supported the market
for roofing tiles made out of plastic and
aluminium from recycled beverage cartons.
Manufacturers and local universities
cooperated to enable material analyses,
which led to important product improvements.
Now, over 15 roofing tile manufacturers are
operating in Brazil, producing a million tiles each year.
Increase consumer
awareness Support collection
& sorting infrastructure
Boost business
opportunities for
recycling entrepreneurs
Expand market
opportunities for
recycled materials

20. Kraft paper
Toiletpaper
Copy paper
Balance paper
Sole pad
Cardboard paper
Plastic wood
Post-consumer
waste
Filling waste
Imported/
domestic
factory waste
Others
Raw material type Semi-end product End products
Others
Chipboard
• Most recyclers also recycle factory waste and other similar feedstock while recycling
UBC, and their production is mainly for the Kraft paper.
UBC recycling
UBC Recycling Analysis

21. Recycling value chain overview
Recycling Value Chain Overview
Collection Recycling Application
UBC Recycler
(Paper mill)
Fibre recycling
UBC Recycler (Full carton recycling)
PolyAL recycling
Paper mill
PE
Aluminum
Plastic wood
Chipboard
Paper
Paper
Social collection
system UBC
Collector
Waste paper
packing station
Total Invoiced
Tonnage of
Packaging
Material in 2016
is 644kt
Incinerator & Landfill
Mixed into OCC
• In 2016, the total invoiced tonnage ofpackaging material in China marketis 644kt, a total of 153ktUBC are recycled,of which Post-consumer waste and
Filling waste volume 142kt, UBC mixed into OCC volume 11kt.

22. Compared with cardboard paper and PET
UBC Collection Analysis
• This diagram sketches up the primary value chain.However disorder among levels and miscellaneous prices make itmuch more complex.
• The price gap of salvage station:UBC 200RMB,cardboard paper 850RMB,PET 500RMB.Price gap of single category professional collectors,UBC
300RMB,cardboard paper 450RMB,PET 700RMB.
Comparison among UBC/Cardboard paper/PET bottle collection
Collecting
Junk house/transit station
Waste contractors/sorting
centers
cleaner/Junkman
Paper/ other salvage station
Waste paper packing
station
Landfill plant
Recycling
Resident
UBC collector
Plastic packing/
crushing station
UBC recycler
Paper mill
PET factory
UBC/PET/Cardboard paper:
0RMB/t or little
Waste paper packing station
Paper/ other salvage station
Paper/ other salvage station
UBC
600-800RMB/t
Cardboard
paper
1600-1800RMB/t
PET
2500RMB/t
UBC
800-1000RMB/t
Cardboard
paper
2500-2600RMB/t
PET
3000 RMB/t
UBC
1200RMB/t
Cardboard
paper
3000RMB/t
PET
3400-4000 RMB/t
Note 1. UBC price between level I and II is estimated. 2. All prices are market mainstream price during Sep-Oct period. 3. Cardboard paper is A level

23. Margin comparison among UBC/Cardboard paper/PET bottle collection
1,275
3,000
3,700
800
2,500
3,000
0
1,000
2,000
3,000
4,000
5,000
Price Feedstock cost Packing fee Logistic cost Land rent & environmental protection Shipping costs Margin
UBC Cardboard paper PET bottle
Margin 14RMB/t
Marginrate 1%
Margin 300RMB/t
Marginrate 10%
Margin 445RMB/t
Marginrate 12%
Compared with cardboard paper and PET
UBC Collection Analysis
• Profits of UBC collector are very low because UBC collecting locations are a long way from plants and shipping costs are high.

24. Waste paper and plastic
Market Overview
Recoveredpaper (OCC) price Recycledplastic price
• The demand of recoverd paper is expected to increase the coming years due to growthing economies, and
UBC price is very competitive compared with OCC under current market environment.

25. China ban on waste imports
Butterfly Effect
• Not prepared for the change
• Need to find a new home for the
waste
• Investing recycling infrastructure,
and rebuild the waste management
strategy
&
• Decreased importvolume and
strict customs inspection
• Shortage of raw material and
looking for alternatives
• Overseas investment
• Phase out SME
&
• Potential destination for waste
• Not enough capacity to consume the
excessive material
• Expansion and transformation
underway
• Reshaping the global supply chain
• Additional costto improve the quality
• Volatile market price
• Raise public awareness and trigger
further action to tackle waste problems

26. China ban on waste imports
Impact on UBC recycling
Challenges Opportunities
• Impact on the current collection models,
especially for UBC collect with mixed paper
• Lower waste price in some markets
positions UBC as a less attractive source of
raw material
• Pressure to remove UBC to improve quality
• Recognized as valuable material if it can be
collected at a reasonable price
• Investing recycling infrastructure to recycle
UBC locally
• Higher waste price encourages UBC
collection and recycling(China)
• Newcomer step into the market due to raw
material shortage