Mpact Investor and Analyst Site Visit

25 May 2016

Welcome - Bruce Strong

Mpact Plastics Wadeville - Neelin Naidoo

Mpact Polymers - John Hunt

Mpact Plastics Wadeville Site Visit

Neelin Naidoo 25 May 2016

4

Mpact plastics overview

Styrene and PET trays, fast food containers

and clear plastic films

FMCG bottles, jars and tubs with in mould labelling

Jumbo bins, pallets, wheelie bins and crates.

PET preforms, bottles, jars, and closures

Key product categories

PET preforms, bottles, jars and closures

Jumbo bins, pallets, wheelie bins and crates

Bottles, jars and tubs with in mould labelling

capability

Styrene and PET trays, fast food containers and

clear plastic films

rPET pellets

Key customers

FMCG companies (carbonated soft drinks,

personal care, pharmaceuticals, food producers)

Quick service restaurants

Agricultural producers

Retail chains

Leader in the manufacture of PET preforms,

styrene trays, plastic jumbo bins and wheelie

bins rPET pellets

5

1 778 2 124

2 344 2 533

External revenue

Underlying operating profit

823 969 1 070 1 148

955 1 155

1 274 1 385

0

500

1 000

1 500

2 000

2 500

3 000

2012 2013 2014 2015

R m

illio

n

HY1 HY2

37 34 44

87

80 72

88

112 6.6%

5.0%

5.6%

7.9%

0

50

100

150

200

250

2012 2013 2014 2015

R m

illio

n

HY1 HY2 margin

Revenue up 8.1% to R2.5bn

Selling price and product mix

lower by 4.0%

Volume growth of 12.1%

Underlying operating profit up 50.8%

to R199m

Margin up to 7.9% from 5.6%

Favourable product mix

Lower raw material prices

Benefit of FMCG restructure

27% 20%

117 106

132

199

Plastics business (31 December 2015)

Revenue Operating profit

Harare

Atlantis Paarl

Brits

Pinetown

Wadeville

1,419 EMPLOYEES

10 SITES

FMCG

BINS AND CRATES

PET PREFORMS, BOTTLES, JARS, AND CLOSURES

rPET

TRAYS & FILMS

7

Staff numbers

242 employees

2015 Production

1.4 billion units

Raw materials

PET – Virgin and Recycled

Certifications/Accreditations

ISO 9001: 2008

FSSC 22 000: 2013

Product range

Carbonated soft drink preforms and bottles

Hot fill preforms and bottles

Water bottles

Edible oil bottles

Wide mouth food jars

Personal care bottles

Mpact Wadeville Overview – PET

preforms, bottles and jars

Major competitors

Polyoak, Bowler Metcalf

Nampak, Fontana

Boxmore, QPET

Production equipment

Husky injection moulding machines

Sidel and Sipa stretch blow moulders

Nissei injection stretch blow moulders Key contracts

ABI, Pioneer, Kingsley

8 PAGE 8

Mpact Wadeville: key milestones in

the South African market

First to market with PET Wide Mouth Jars

First to market with Hot Fill preforms and bottles

First to market with 144 cavitation preforms

First to market with 1881 light-weight neck design for carbonated

soft drinks

First to market in Africa for rPET in The Coca-Cola Company

brands

9

What is PET?

Polyethylene terephthalate (PET)

Derived from crude oil

Uses

Fibre (Polyester)

Packaging

Key properties in packaging

Gas barrier

Strength

Clarity

Lightweight

Key suppliers

Hosaf

Mpact Polymers

10

PET market in South Africa

Total consumption was approximately 210,000 tonnes in 2015*

Bottles account for approximately 68%*

Historic annual growth has been between 6-8% from 2004*

Future growth is estimated at 8% per annum*

Total consumption is sourced locally from Hosaf and rPET producers,

supplemented by imports

Import parity pricing based on global indices

*Source: PETCO

11 Source: CYPET Technologies, Delta T Systems, Metal Casting Suppliers

Stretch blow moulding process Injection moulding process

Mould Barrel Screw Heater

PET pellets

PET bottle manufacturing process

12 PAGE 12

In Summary

Invested in state-of-the-art technology

Economies of scale

Capabilities benchmarked globally

Expertise in processing of PET (including recycled PET)

High growth market where opportunities exist to substitute other

packaging substrates

Competitively positioned

Mpact Polymers Site Visit

John Hunt 25 May 2016

14

Why bottle-to-bottle rPET (Savuka PET)?

Approximately 68% (140,000 tonnes) of PET usage in SA is for beverages*

Projected 8% growth rate in PET use*

Recycling rate of PET beverage packaging in 2015 was 52%*

To date rPET has been primarily used for polyester fibre production

Further improvement in recycling rates requires bottle-to-bottle recycling

Technology has progressed to produce rPET of suitable quality for beverage

packaging

Producer responsibility for recycling (helping to reduce bottlers’ carbon

footprint)

*Source: PETCO

15

PET market growth

Source: PETCO

-

50 000

100 000

150 000

200 000

250 000

300 000

350 000

To

nn

es

PET Recycled PET used in bottles Total PET consumption

16

Mpact Plastics integration

17

Project Rationale

Exceeds Mpact’s minimum investment criteria over the period

Leverage Mpact’s recycling network and converting capabilities

Improved environmental performance for Mpact, its customers and the

community

Job creation in the recycling industry

Qualifies for S12i tax incentive

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Other project benefits

Environmental benefits

29,000 tonnes of used bottles will be diverted from landfill

Estimated saving of 186,000 cubic metres of landfill space

CO2 emissions reduction of approximately 53,000 tonnes per annum

Production of rPET requires less energy than the process of creating virgin PET

Low energy and water consumption

Socio-economic benefits

Approximately 1,000 indirect jobs will be created through the collection of bottles

85 direct jobs created

Benefits Coca-Cola Southern Africa and its bottling partners (ABI & others) and other

users of PET; as they are increasingly interested in recycling the materials they use to

package their products

Greenfield investments in manufacturing capability in South Africa

Innovation

Public-private partnerships

19

Staff numbers

85 employees

Capacity

29 000 tonnes of bottles processed per

annum

21 000 tonnes rPET produced per annum

Raw materials

Used PET bottles

Financial information

Capex cost: R350 million

Shareholding: Mpact: 79%, IDC: 21%

Products

rPET (Savuka PET) and other recyclable

polymers

About Mpact Polymers

Major Customers

ABI

Mpact Plastics

Facility

Krones Metapure Technology

Size: 20,000m2 (9,000 m2 under cover)

Competitor

Extrupet

The project is a result of close collaboration over several years between

Mpact, The Coca-Cola Company, ABI, SABMiller, IDC, DTI, PETCO,

Krones and the City of Ekurhuleni

Certifications and approvals

The Coca-Cola Company

EU Food and Safety Authority (recycling

process)

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Considerations for technology selection

Coca-Cola approved technology (four approved equipment suppliers)

Final product characteristics

Capital cost and operating cost per kg

Economies of scale

Proven technology supplier capability

Key learnings from international benchmarking

Mpact visited numerous rPET facilities, recyclers and convertors in 8 countries

(Germany, France, Austria, Bangladesh, Mexico, Italy, USA and Peru)

Require secure raw material supply

Require convertor and brand owner commitment

Krones Metapure technology is proven

rPET Technology review

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Technology - Krones Metapure

Krones is a major filling line supplier to SABMiller and The Coca-Cola

Company globally – revenue in 2015: EUR 3.2 billion

Krones Metapure technology has:

Integrated design and technology developed for rPET

Bottle washing plant experience: low water and chemicals consumption

combined with wash quality

Energy efficiency kWhr/kg of rPET

Limited thermal processing – improved polymer characteristics

22

Progress to date

Commissioned on time and within budget

Proven capability in meeting exacting specifications

Well entrenched quality control protocols

The Coca-Cola Company approval in place

Market acceptance of Savuka PET– 10% rPET in 500ml bottles in Gauteng

Successful unveiling on 10 May, with strong support from Government, IDC,

ABI, TCCC, SABMiller, and others

Healthy raw material supply – Mpact Recycling, Remade

Ongoing Krones support

23

Market approvals

The Coca-Cola Company (TCCC) approvals

Technology – Krones Metapure technology (prior to order)

Chemical analysis of rPET product (November 2015)

Sensory evaluation of Coke in an rPET containing bottle - 10 weeks

(November 2015)

Facilities audit – includes mandatory testing equipment (February 2016)

Supplier Guiding Principles (February 2016)

Savuka PET has been approved in the packaging of TCCC products at 25%

Product converting and bottling trials

Physical trials of product run at the converter or the bottlers premises

Runability, final product quality

Completed for 500ml Coke bottle (March 2016), 2L Coke bottle trial

underway

Completed at other key food packaging customers

24

Key challenges to date

Plant availability

Power interruptions and allocation (partly resolved)

Staff confidence and training (in progress)

Intermittent stoppages (being resolved)

Maintenance higher than planned

Quality

Colour (resolved)

Throughput

Equipment bottlenecks (resolution in progress)

Yield - process stability, purge rates (improving)

Raw material feedstock quality (in progress)

Profitability

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Current focus

Incoming raw material standards

Plant availability

Root cause analysis

Additional training

Service and maintenance protocols

Throughput optimisation

Yield

De-bottlenecking

Further convertor and bottler approvals

Profitability

26

Mpact Polymers official opening