THINKING CREATING MAKING GROWING 2018...THINKING NEW How our ability to think in new ways is key to our innovation CREATING BETTER How we build on our strengths to create better outcomes

Sustainability Report 2018

T H I N K I N G

C R E A T I N G

M A K I N G

G R O W I N G

THINKING NEWHow our ability to think in new ways is key to our innovation

CREATING BETTERHow we build on our strengths to create better outcomes

Welcome to our Sustainability Report

We’d like to show you how we are working with others,for others. How we share our value as we grow together, think new, make change and create better for all.

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12

MAKING CHANGEHow we adapt and change to stay future focused

GROWING TOGETHERHow it takes trusted partnership to grow and improve

48

34

S H A R E D V A L U E

T H I N K I N G

C R E A T I N G

M A K I N G

G R O W I N G

We employ a total of 1,846 people

314,615,501kWh generated

78.6% 72.4%

6.2%

permanent new starters

ENERGY GENERATION

We are NZ’s largest producer of bio-renewable energy

Renewable energy

Energy from biomass

Energy from geothermal steam

2018 energy sources

Manufacturing operations:

82% New Zealand

1% China, Hong Kong, Malaysia

OUR INVESTMENTS OUR EMPLOYEES

Kinleith and Tasman Mills generate close to half of their electricity requirements internally

Tasman Mill

Transformation

130 ha radiata pine plantation at Stoneleigh Forest

Purchase

Bearing360

Launch

HEALTH AND SAFETY

employees with 10 years+ service with the company

of our senior managers are women

40%

22 231

11%

2018 highlights

new graduates and apprentices

Putting customers first enables us to provide integrated services and meet their needs for quality solutions.

MARKET PULP We produce kraft market pulps for use in various boards, tissues and specialty products.

CONTAINERBOARD We produce kraft and recycled containerboards to be converted into packaging products.

PACKAGING We provide smart packaging solutions such as boxes, multi-wall bags, specialty boards and paper cups.

PAPER RECYCLING Fullcircle collects waste paper throughout New Zealand for transformation into new products at our mills.

LOGISTICS Lodestar provides shipping and domestic transport solutions to deliver products to global markets.

WE ARE A SPECIALIST IN...

About Oji Fibre SolutionsWe are a company with fresh ideas and optimism, built on a strong heritage, and are proud to adopt our parent company’s forward-thinking principles of quality, innovation and sustainability.

We employ more than 1,840 people, who work together to produce quality kraft pulp, paper and fibre packaging products from renewable, sustainably harvested forestry and recycled wood fibre.

Oji Fibre Solutions is firmly part of the circular economy. Trees are a natural, renewable resource that can be used efficiently to make environmentally sustainable products of high strength and quality.

You have most likely been touched by one of our products. It might be the cardboard boxes that you see

CUSTOMER FIRST

tonnes recovered fibre collected by Fullcircle

tonnes recovered fibre used in our mills

260,305 190,298

We are NZ’s largest paper recycler

RECYCLING

Packaging Innovation and Design Awards for My FurBaby

DESIGN AWARDS

17% Australia

Projects provided long-term support

COMMUNITY

12

0 1.74Product Safety Incidents

Total Injury Rate (34% on 2017 results)

OJI FIBRE SOLUTIONS AT A GLANCE

Our Yatala facility achieved Best in Design in the Food & Beverage Awards

in supermarkets, keeping primary produce fresh, the paper bag or boxes in which your products arrive or the products that contain our pulp such as coffee filters, tissues, nappies or cellulose fibre cement boards.

We have a long-standing presence in regional New Zealand and a growing presence in Australia. After being purchased by the Oji Group in 2014, the company has benefitted from the injection of new energy and investment and is proud to be backed by the strength of the world’s fifth largest pulp, paper and packaging business.

2018 we marked 145 years since the Oji Group was founded. Looking to the future, the company strives for the “Creation of Innovative Value” to make a positive “Contribution to the Future of the World” and to act in “Harmony with Nature and Society”.At Oji Fibre Solutions, we aspire to the same ideals.

375,138

CONTAINERBOARD

Tonnes530,577MARKET PULP

Tonnes

214,285

PACKAGING PRODUCTS

Tonnes33,944

CHEMICALS & BY PRODUCTS

Tonnes

2018 PRODUCTION

3Sustainability Report 2018

Oji Fibre Solutions

Oji Fibre Solutions is a strong, integrated fibre solutions business that benefits from Oji Holding Corporation ownership.

In 2018, Oji Holdings celebrated 145 years since the company was founded. It is now one of the largest companies in the global pulp, paper and packaging sector. It has the management philosophy of acting in harmony with nature and society, creating innovative value and contributing toward a new future.

Oji Fibre Solutions embodies this philosophy in the values of being innovative, built on strength, future focused and a trusted partner.

As part of Oji Holdings’ aspiration to reduce the environmental burden of its global operations, Oji Fibre Solutions is set to invest in a new wastewater treatment system at the Kinleith Mill.

Modernisation of Tasman Mill, expansion of packaging operations across Australia to better service customers there and a strong commitment to managing environmental impacts has improved Oji Fibre Solutions’ future focused positioning during 2018.

This year, we hosted Japanese, New Zealand and Australian dignitaries in association with trade visits, and for the Tasman Mill evaporator launch and at the opening event for the Yatala packaging facility. It was a pleasure to bring these parties together, and we look forward to further collaboration.

As a producer of a globally-traded product, over the last 18 months Oji Fibre Solutions has faced market headwinds. Competitive pressure across the pulp, paper and fibre packaging industry globally has intensified following changes to China’s domestic waste management policy and volatility in trade terms between China and the United States.

Despite these challenges, I am optimistic about future opportunities for cellulose-based products. Natural renewable products that are low in carbon are growing in favour at a time when consumers are increasing their scrutiny of raw material inputs and seeking sustainable packaging solutions.

Through Oji Holdings’ scale, market knowledge, pulp and paper experience and research and development skills, it is helping to create value in Oji Fibre Solutions and in the economies and environments in which we are located.

2018 was another busy year on our journey to become a more sustainable business.

Our primary focus, as always, is health and safety. This year we made significant investment in our health and safety framework, processes, plant and equipment to make things safer. I am exceptionally proud of the inroads we have made in reducing total injuries, process safety incidents and notifiable incidents.

Other highlights of 2018 include celebrating the successful installation of a new evaporator system at the Tasman Mill in New Zealand and formally opening our new packaging facility at Yatala in Australia. Both initiatives signal our owner’s support to invest and expand Oji Fibre Solutions’ operations.

Updating the evaporator system has been an integral part of improving equipment reliability and productivity of the Tasman Mill. Other contributing projects include developing a new geothermal steam line, replacing an old power boiler and an $18 million maintenance programme to address production issues. Over the course of 2018 we also rationalised pulp production to concentrate on our

world-class K25TM fibre cement pulp and unbleached kraft pulp. Combined, these projects secure a more sustainable future for the Tasman Mill and the local community.

Focusing on the future, we made the strategic decision to expand our forestry ownership with the purchase of Stoneleigh Forest. This will provide a sustainable and secure source of pulp-log fibre close to our milling operations in New Zealand. We are working with the Overseas Investment Office regarding future investments.

Looking externally, we also grew our partnerships. As a member of the Climate Leaders Coalition, we actively support New Zealand’s transition to a low-carbon economy. While in Australia, we entered an exciting new relationship with the New South Wales Foodbank.

In late 2018, in a great example of the company’s focus on innovation, we joined forces with Netlogix to establish Bearing360, a market-facing shipping company offering tailored solutions.

I am proud to be leading a company that is firmly part of the circular economy, creating value from natural, renewable and recyclable resources.

Sustainability is integrated within our business.

We are strengthening and reinforcing the business.

From our CEO

From our Chairman

Dr Jon RyderChief Executive Officer (CEO)Oji Fibre Solutions

Hiroyuki IsonoDirector and ChairmanOji Fibre Solutions

CORPORATE OVERVIEW 5

Oji Fibre Solutions


Our services

Fullcircle Logistics

Fullcircle is New Zealand’s only paper recovery and recycling service that transforms waste paper into paper board and packaging products for use in the local packaging industry.

We are proud of this service and consider it a major point of difference in the New Zealand paper recycling market.

tonnes of recovered fibre remanufactured at our Kinleith and Penrose Mills in 2018

190,298

260,305tonnes of fibre recovered by Fullcircle in 2018

2open hatch bulk charters operated, of 38,000 DWT each

sqm storage facility for paper & forest products, giving strategic access to export terminals and container yards

46,000

Our products

We apply our skill and experience to provide world-class kraft market pulps for use in various boards and specialty products. Customers trust us to deliver uniform quality products on time, every time.

HI WHITE™ is a bleached radiata pine kraft pulp valued by customers for its consistency, strength, bulk and brightness. Produced at Kinleith Mill, HI WHITE™ has a strong reputation with Asia-Pacific papermakers for its suitability in applications such as coated and uncoated printing and writing papers, bleached paperboard, filter papers and tissue products.

K25™ is a wood pulp used in the production of high-quality fibre cement-based building boards. Developed and manufactured over many years at both the Kinleith and Tasman Mills, these days it is produced solely at Tasman Mill on a dedicated pulp line and dryer. Customers value the special fibre properties together with the very tightly controlled quality parameters and product consistency.

TASMAN PAPER GRADE UNBLEACHED KRAFT PULP Tasman unbleached kraft pulp (UKP) is a premium natural kraft pulp manufactured from 100% radiata pine, delivering high-strength and medium-fibre coarseness fibre. It is ideal for container paper board grades and brown kraft papers.

Market pulp

We produce kraft and recycled fibre-based containerboards in a wide range of weights to be converted into high-quality packaging products.

HI GOLD™ is a premium light shade, high-strength liner for performance packaging with superior visual appeal.

GRAPHIX™ is a high-strength white liner that delivers strong branding through its smooth, white surface.

CLIMATE™ is a high-performance medium for use in high-humidity, cool-store environments.

ECOFLEX™ is a fully recycled medium for use in standard packaging environments.

ECOKRAFT™ is a kraft and recycled liner for performance in standard packaging conditions.

Containerboard Packaging

Oji Fibre Solutions’ packaging business is one of Australasia’s largest fibre-based manufacturers with ten facilities throughout New Zealand and Australia.

With an eye for creativity and innovation, our in-house design teams work with our customers to showcase their brand and ensure our packaging protects their product and meets their individual needs.

CARDBOARD PACKAGINGAt our New Zealand and Australian packaging facilities, we manufacture a comprehensive selection of cardboard products for the use in a wide-range of industries including horticulture, dairy, meat, seafood, beverage and industrial manufacturing.

PAPER BAGWe specialise in complex multi-ply bags where product integrity and efficient distribution are critical, supported by high-quality graphics and the option of traceability through QR coding. Our product range includes bags for the dairy, cement, flour and sugar industries, from 5kg sizes through to 50kg industrial bags.

SPECIALTY BOARDS AND CARDBOARD CARTON SOLUTIONSWe use our specialty boards to manufacture custom-made corrugated and solid fibre packaging, including heavy-duty packaging, frozen and chilled products packaging, point-of-sale displays, solid fibre slipsheets and bulk bins.

PAPER CUPSWe manufacture paper cups for a wide range of food and beverage products and other products that benefit from being presented in well-designed packaging.

CORPORATE OVERVIEW

Lodestar has expertise in providing a comprehensive logistics service incorporating end-to-end cargo management.

Third-party customers can now access Lodestar’s shipping services through our new joint venture Bearing360 Limited, which provides tailored logistics solutions for export and import businesses.

Services include road and rail transportation, product handling and storage, container packing and coastal and international shipping of containers and break bulk.

68,000TEU containers across ten contracted shipping lines

1.3mtonnes of export cargo under management

3.4mtonnes of freight under management within New Zealand: rail, road and coastal

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Oji Fibre Solutions


Our locations

CORPORATE OVERVIEW

Our markets

KEY FACILITIES

OPERATING IN

NEW ZEALAND

DISTRIBUTION CENTRES

Market pulp- Tokoroa (Kinleith)- Kawerau (Tasman)

Containerboard- Auckland (Penrose)- Tokoroa (Kinleith)

Packaging- Auckland- Hamilton- Levin- Christchurch

Paper recycling - 14 Fullcircle sites

throughout New Zealand

Logistics- Auckland (Office)- Mount Maunganui

Containerboard- Kuala Lumpur

(Office)

MALAYSIA

Market Pulp- Shanghai (Office)

Containerboard- Shanghai (Office)

CHINA

HONG KONGContainerboard- Hong Kong (Office)

AUSTRALIAPackaging- Yatala - Brisbane- Sydney- Melbourne

We are proud to make our products available internationally. The fibre strength and consistent quality of our pulp, paper and packaging products are sought by customers across the globe.

10converting plants throughout Australia and New Zealand

1recycled paper mill: Penrose

1new converting plant: Yatala

2kraft pulp mills: Kinleith and Tasman

30+markets internationally

1kraft paper machine: Kinleith

We have 24 distribution centres and box-erecting facilities close to our customers across Australia and New Zealand to ensure our products are available when, and where, required.

Tasman Mill KAWERAU, NEW ZEALAND

Continuing our commitment to the sustainability of our mills, we have transformed the Tasman Mill to improve operational efficiency and focus production on unbleached kraft market pulp products.

- Find out more on page 36

Paper Bag AUCKLAND, NEW ZEALAND

Following the successful expansion and upgrade of the plant’s hygiene hall, and in response to growing customer requests, we now offer QR codes on our multi-wall paper bags.


Yatala QUEENSLAND, AUSTRALIA

Adding to our network of converting plants servicing primary-sector customers in Australia with quality corrugated packaging products on time, every time, we formally opened the Yatala facility in February 2018. It includes the latest manufacturing technology and is complemented by four new distribution centres.


The following provide examples of our investments in 2018.

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Oji Fibre Solutions


Responsible sourcing of woodchips and pulp-logs through to paper recycling services provided by Fullcircle is key to our sustainability.

PAPER RECYCLING Fullcircle is our

recycling service, with 14 baling sites

supplying recovered fibre to our mills.

OUR CUSTOMERS Our products are sold to more than 30 countries. We service the horticulture, dairy, meat, seafood, beverage, construction and personal care sectors.

LOGISTICS Lodestar is our logistics business, providing shipping and domestic transport solutions to deliver products to global markets.

THREE PULP AND PAPER MILLS Kinleith Mill, Tasman Mill, Penrose Mill.

TEN PACKAGING OPERATIONS Across New Zealand and Australia.

We Manufacture

We Recycle

We Transport

We Connect

Our circular economy

CORPORATE OVERVIEW

2020 targetsWe use our knowledge, our expertise and our passion to harness the strength of sustainably managed exotic radiata pine plantations to create value. We provide solutions by nature.

Our strategy

Employees actively involved in the in-house wellbeing programme

6%

30% reduction in waste to landfill between 2015 and the end of 2020

reduction in lost-time injury rate between 2017 and end of 2020

50% reduction in total injury rate between 2017 and end of 2020

product safety incidents0

0

50%

0

reduction in GHG emission intensity between 2015 and the end of 2020

non-compliances with environmental laws and regulations

serious injuries

Our commitment

HEALTH AND SAFETY

ENVIRONMENT

EMPLOYEE WELLBEING

Oji Fibre Solutions is committed to being a trusted partner, built on strength, future focused and innovative.

These values are held in common across all business units and drive Oji Fibre Solutions forward on a sustainable path to create long-term value for our people, the partners we work with, the customers we supply and the communities and environments in which we operate.

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Oji Fibre Solutions


T H I N K I N G

N E W

How our ability to think in new ways is key to our innovation

We can shape how people enjoy their day through the products we create and innovate.

I N N O VA T I O N

SUSTAINABLE DEVELOPMENT GOALS

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Oji Fibre Solutions


We will help ensure that the market is sustainable for shipping lines by levelling out cargo flows to improve predictability.

Dritan RamohitajLodestar International Shipping Manager & Bearing 360 General Manager

Bearing360 offers a new way forward in shipping, where everything is managed around the customer.

In 2018, Oji Fibre Solutions embarked on an exciting new venture with Netlogix Ltd, an innovative data-driven supply chain and logistics solution provider, to create Bearing360 – a large-scale shipping solutions company.

With shipping services being rationalised across the globe, New Zealand is beginning to feel the impact. Shipping lines are fixing their schedules and vessel sizes in advance, largely in anticipation of expected cargo volumes, which can result in limited service options.

Oji Fibre Solutions and Netlogix have collaborated to bring together the strengths of both organisations to address this issue. Our logistics business arm, Lodestar brings scale and expertise in export shipping. Netlogix brings smart technology solutions.

The result is a new venture that offers customers a managed shipping solution, positioned to help ensure a range of shipping services continue to support the New Zealand export market.

Bearing360 strengthens reliability across the export supply chain by levelling the cargo flows to improve the predictability of ship uplifts. Its medium to long term forecasting enables ship planners to maximise vessel uplift and reduce waste in the supply chain.

Bearing360 delivers simple and smart shipping solutions.

Benefits for customers include:

• Personal management of shipments from load port to destination

• Improved choice and frequency for exporters and importers

• The ability to make one seamless booking across the whole global network

• An easy on-line system, where customers can keep an eye on their shipment every step of the way.

This venture is unique in that Bearing360 immediately has significant scale with cargo already moving to more than 160 ports, touching all major international markets with almost every shipping line, and facilities for almost any kind of cargo.

Chin Abeywickrama Netlogix CEO

BEARING360

Bearing360 is driven by a determination to always deliver and believe in service quality, cost efficiency and market choice as vital pillars which underpin success.

FIND OUT MORE ABOUT THE SERVICES AT

bearing-360.com

EMBARKING ON A NEW JOINT VENTURE

Bearing360 provides market certainty for exporters and importers

Both companies are using their combined scale to compete in the international shipping market.

Lodestar will remain the one-stop-shop logistics provider for Oji Fibre Solutions and will facilitate export shipping services for external customers through Bearing360.

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Oji Fibre Solutions

Sustainability Report 2018 INNOVATION

Specialty Boards, our facility in Hamilton, partnered with Fonterra to develop an innovative design for a new bulk bin to store and transport milk powder within manufacturing sites.

Previously these types of bins have been available only from off-shore suppliers and would have needed to be imported by New Zealand businesses.

To provide a local solution, Oji Fibre Solutions worked with Fonterra to design a fit-for-purpose bulk bin.

In particular, the design was trialled to determine how best to meet our customers specific size and quality requirements.

Specialty Boards developed the machinery needed to efficiently manufacture the bin. This resulted in a machine with a bespoke winding process to laminate Oji Fibre Solution board and paper together. Coupling this process with a solid fibre board base provides a durable bin with the strength characteristics required to transport and store large volumes of milk powder.

Being collapsible and stackable, the Oji Fibre Bin is efficient to transport and easy to store prior to use. Its strength also supports its reuse.

DEVELOPING THE OJI FIBRE BIN

Reusable food-grade bulk storage solution

H/E GRAPE BOX

An alternative to wax

Following conversations with customers in Mildura, Australia, Oji Fibre Solutions took up the challenge of developing an export-grade grape packaging solution to replace waxed boxes.

Wax coatings have traditionally provided a moisture barrier to preserve the strength of corrugated boxes holding and transporting chilled products such as fresh fruits. However, waxed fibre is difficult to recycle and is often sent to landfill.

Traditionally grape boxes have a base (inner), a hand-folded cardboard tray and a waxed lid and are able to hold 10kg of grapes. Using different combinations of our Power P/Ply in the base and lid, we have been able to produce a strong cross-stackable box without using wax. This provides a solution that can preserve the grapes in their optimum conditions during storage and transport.

To make these innovations, we worked with our customers trialling different manufacturing approaches and board grade combinations. This included exploring the final prototype’s performance in cool storage to ensure the volume, locking tab and creasing were correct and the lid fitted well.

Aware that our customers would also want a box that delivers on final presentation fronts, we also trialled the prototype on shelf in a supermarket, to ensure its performance.

The design for H/E Grape Box enables customers to fit 20 pallets in an export container, six boxes per layer and 16 boxes high. A vented inner has also been developed, which enables our customers to pressure cool their packed boxes without needing to repack or lid them.

Combined, these features provide our customers with a strong grape box that does not include wax, is recyclable and easy to transport.

Demand has been strong with other exporters in the horticultural sector recognising the benefits of removing wax.

We are pleased to provide a locally manufactured option for New Zealand businesses seeking a bulk storage solution that meets food-grade regulations.

By purchasing a locally produced bin, these businesses can shorten their supply chain.

There continues to be further potential to innovate the current design to accommodate liquids and fruit.

SPECIAL FEATURES OF THE OJI FIBRE BIN

Food-safe

Strong

Stackable

Can be used many times over

Easy to palletise

Recyclable

Collapsible

The development of this bulk bin solution is an excellent example of collaborative innovation between Fonterra and Oji Fibre Solutions.

Grant FitzgibbonChief Operating Officer Packaging

The H/E Grape Box performs well throughout the supply chain and gives customers a cost effective and an environmentally sound export-grade packaging solution. Nick MolloyGeneral Manager Packaging Australia

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Oji Fibre Solutions


ANSWERING A SIMPLE QUESTION

Why plastic led to the creation of EmGuard

We spent considerable time considering and trialling different products, and Oji Fibre Solutions provided an ideal solution with its solid fibre boards. This was due, in part, to their perseverance in finding the right materials and process to create our product. We look forward to a long and productive relationship with Oji Fibre Solutions.

Robert Fryer FuturEcology

The result is a good-looking biodegradable product that is well-placed to replace plastic alternatives.

Environmental advocates, Jan and Robert Fryer of FuturEcology, identified the opportunity for biodegradable plant guards, and they approached Oji Fibre Solutions to contribute to the design process and bring their vision to life.

Many newly planted plants need protection from pests, such as rabbits, and are typically protected by a plastic plant guard or sleeve held in place with a bamboo or metal stake. The lightweight sleeves then need to be collected once the plant is established and are sometimes reused. However, they can also be easily blown away and can end up in waterways and on river banks, where they often remain, causing environmental concerns.

Jan and Robert’s daughter Emma was helping with planting and asked the simple question: “Why use plastic plant guards?”

Emma researched the availability of biodegradable guards and could not find any options anywhere. This led to the idea of developing a solution that would remove the unnecessary use of plastics.

To move from a good idea to a creative solution, FuturEcology sought ways to bring it to life and made recommendations for a suitable material that would be stable enough to protect delicate seedlings.

Following several discussions with FuturEcology, Oji Fibre Solutions’ in-house design team developed an innovative, recyclable and biodegradable solution using a solid pulp-fibre board, suitably named EmGuard.

Continuing to innovate, Jan and Robert sought to incorporate FuturEcology branding while keeping the product as close to nature as possible by not printing on the board. Our in-house design team met this challenge to showcase the brand by designing a pattern with the logo cut into the board itself.

FuturEcology have kept EmGuard competitively priced with similar plastic guards to ensure price is not the deciding factor for users. They want the focus to be on EmGuard being a fully biodegradable option that enables good plant establishment and which over time becomes part of the mulch.

During the 2019 summer drought in Nelson, the product proved itself robust and able to cope with harsh conditions. Plants in EmGuards survived and even thrived, benefitting from protection and ventilation.

EmGuards have been field trialled for two years, in some situations alongside similar plastic guards. Very positive results are shown for EmGuard, including outstanding annual growth rates, no sunburning of plants and the promotion of habitats for invertebrates.

EmGuard is currently available New Zealand and Australia.

FIND OUT MORE AT:

futurecology.co.nz/emguard/

EmGuard features FuturEcology’s logo cut into the board itself.

FUTURECOLOGY LOGO ON DISPLAY

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Oji Fibre Solutions


C R E A T I N G

B E T T E R

We have a fantastic product that is like our people, incredibly strong and highly adaptable.How we build on our strengths

to create better outcomes

B U I L T O N S T R E N G T H


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Oji Fibre Solutions


Making the most of wood fibre

森のリサイクル・紙のリサイクルSustainable forest management and paper recycling.Oji Group

The long, high-density fibres in radiata pine are sought after for their strength qualities in a variety of end uses.

Virgin wood fibre

Virgin wood for our pulp and paper mills comes from sustainably managed exotic plantation forests in the North Island of New Zealand.

3,499,356VIRGIN WOOD (chips and logs)

Tonnes

190,298RECOVERED FIBRES

Tonnes

CASCADING USE OF FOREST RESOURCES

These wood supplies consist of residuals from other parts of the forest industry, including lower-value industrial logs, top-logs not suitable for sawmilling and sawmill chips typically derived from slabwood.

We also use the bark and other residuals not suitable as raw material for pulp as biomass fuel.

In this way, operations promote the efficient and complete use of renewable forestry resources.

In mid-2018, Oji Fibre Solutions made a strategic decision to purchase the Stoneleigh Forest.

Situated just outside Te Kuiti, the forest has an effective area of 130 ha, with about 85 ha of 25-year-old radiata pine. Purchasing this plantation forest provides a flexible and sustainable source of pulp-log fibre for use at Kinleith Mill, which is less than 100 kilometres away.

The forest is planned to be harvested over the summer of 2019/20. It will produce saw-logs for market as well as pulpwood for Kinleith Mill. Following this, the land will be replanted in radiata pine.

This was the first forestry approval under new overseas investment rules managed by the New Zealand Overseas Investment Office (OIO) to encourage investment in forestry.

The purchase of Stoneleigh is a good first step in what we hope will be a number of land and tree acquisitions designed to support the pulp and paper business into the future.David FoxOperations Manager Fibre Procurement

Since 2007, Oji Fibre Solutions has planted approximately 5 million seedlings.

215,505PAPER PRODUCTS1

Tonnes

7,455MARKET PULP2

Tonnes

WOOD-FIBRE INPUTS

We use quality wood fibre inputs to make our products

Investing in the future

1. Paper products include internally produced and externally purchased containerboard, paper, wrapping and cores

2. Externally purchased market pulp only

Processed timber

products

Timber products

WOODCHIP

Roun

d logs f

or timber

SUSTAINABLY MANAGED

FOREST

Small diameter wood

Sawmill residue

Raw timber products

Pulp By-products (chemicals)

Raw material in solvent and resin

Woody biomass

fuel


Oji Fibre Solutions

BUILT ON STRENGTH

We have Forest Stewardship Council® (FSC®) Chain of Custody (CoC) certification for pulp at both the Kinleith and Tasman Mills and for paper at Kinleith Mill.

For more information on FSC® please visit: ic.fsc.org/en

We have Programme for the Endorsement of Forest Certification (PEFC™) Chain of Custody (CoC) certification for pulp at both the Kinleith and Tasman Mills and for paper at Kinleith Mill.

For more information on PEFC™ please visit: pefc.org/

FOREST STEWARDSHIP COUNCIL (FSC®)

PROGRAMME FOR THE ENDORSEMENT OF FOREST CERTIFICATION (PEFC™)

Certifications such as the Programme for the Endorsement of Forest Certification (PEFC™) and the Forest Stewardship Council (FSC®) are respected around the world as identifiers of the sustainability and legality of timber products. These standards are independently audited.

Chain of Custody (CoC) certification ensures the wood can be tracked from the point of harvest through to the finished product delivered to our customers.

We obtain as much wood as is practicable from Programme for the Endorsement of Forest Certification (PEFC™) and/or Forest Stewardship Council® (FSC®) certified forests, with the balance meeting the input eligibility requirements for mixed sources.

We are committed to promoting sustainable forestry and will purchase virgin wood fibre from legal and well-managed forest operations only.

Our Wood Sourcing Policy adheres to the FSC® and PEFC™ goal of avoiding the procurement of wood fibre from unacceptable wood sources, including:

• Illegally harvested wood

• Wood harvested in violation of traditional and human rights

• Wood harvested in forests in which high conservation values are threatened by management activities

• Wood harvested in forests being converted from natural forest plantations or non-forest use

• Wood harvested from forests in which genetically modified trees are planted.

Positive contribution of forests Sustainably managed forestry and associated industries provide consumers with products made from natural, renewable resources. These industries also contribute to positive environmental, economic and social outcomes. For example:

• Forestry is a significant sector in New Zealand, contributing 3% of GDP and directly employing around 20,0001 people. Wood products are New Zealand’s third largest export earner

• Combined, the forestry and wood processing sectors create a wide variety of job opportunities, typically in rural areas

• Wood-fibre products are renewable, reusable and require less energy to recycle than many other materials

• Independent research has identified a wide range of rare and threatened species living within plantation-grown forests.

1. See www.mpi.govt.nz

The relationship between forestry products and the carbon cycle• If forests are managed

sustainably, there is a balance between absorption and emissions, and the net impact is neutral. If areas of sustainable forests increase, the net effect is to reduce greenhouse gas concentrations and mitigate climate change as young and fast-growing trees absorb more carbon

• Trees absorb carbon dioxide (CO2) from the atmosphere as they grow. After harvest, CO2 continues to be stored in the wood products – including paper – until they decompose or the wood fibre is burned as a fuel

• Forestry aids the transition to a low-carbon economy through carbon sequestration and the development of a circular economy.

Sourcing wood responsibly

In an international market where the legality of logging and the issues of deforestation are a growing concern, there is increasing demand for fibre-based products to be certified.

We are also experiencing increasing due diligence from our customers seeking to trace fibre to the forest of harvest.

Oji Fibre Solutions is supportive of this ongoing drive for better transparency and traceability across supply chains.

We require all our suppliers to comply with relevant legislation and with Oji Fibre Solutions’ Responsible Wood Sourcing Policy to ensure the legality of timber used.

Kinleith and Tasman Mills have been FSC Chain of Custody certified for more than 10 years and PEFC Chain of Custody certified for two years. We are now actively seeking to extend our certifications to our other manufacturing sites.Philip MillichampGroup Manager Environment & External Relations

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Oji Fibre Solutions

Sustainability Report 2018 BUILT ON STRENGTH

Recovering and recycling fibre

Fullcircle, our recycling arm, works closely with communities and businesses to collect recyclable items. In Dunedin and Wellington, we sort household recyclables at our two Materials Recovery Facilities, where we separate out cardboard and paper and remove anything that is not recyclable.

In other areas in New Zealand, we collect cardboard and paper, which is baled at one of our 14 baling plants.

Through Fullcircle, in 2018, we collected 260,305 tonnes of waste cardboard and paper. Of this, 190,298 tonnes (70%) was processed into paper products at our Penrose and Kinleith Mills. This was then either sold or further processed into packaging solutions at our packaging sites in New Zealand and Australia.

The balance of the fibre and all other recyclables (e.g. plastic film and shrinkwrap, plastic containers, steel

Materials Recovery Facilities (MRF) in partnership with Wellington City Council and Dunedin Regional Council

14

2

Baling plants nationwide in New Zealand from Auckland to Invercargill

5-8Paper and cardboard can be recycled

After that, the fibres making up the paper ‘wear out’.

SLOGANS ON WEBSTAR COMPACTOR BINS

Passionate about recycling

Fighting waste together

Partnering to protect our environment

Minimising waste for a greener future

Passionate about the environment

Another load diverted from landfill

It’s easy being green – Reduce, Reuse, Recycle

Recycle the present, save the future

and aluminium cans) are sold to either local re-manufacturers or international buyers for recycling overseas.

We strive for the best quality fibre as an input to the recycling process to ensure we create quality paper with optimal efficiency.

For example, clean brown cardboard packaging boxes yield more fibre when repulped than a toilet roll, which is made from short-fibre length paper.

Working with external experts, we are aiming to develop an easy to understand scale to show the potential for fibres to be recovered from various types of papers. When finalised, it is intended the scale will be an education tool and help to promote paper recycling.

We are the only company recovering used paper and recycling it in New Zealand into paper and paper packaging. Our ability to recycle paper commercially is greatly influenced by demand for the products we produce.

Current estimates suggest up to 600,000 tonnes of waste paper could be available throughout New Zealand.

Fullcircle and Webstar partnered in 2018 over a simple concept – to jointly implement initiatives that contribute to greater environmental outcomes.

Compactor bins at Webstar sites were rebranded with eight slogans to promote our partnership.

Processing recovered fibresPaper collected in excess of domestic demand has been exported for reprocessing in other countries. China’s ‘National Sword’ restriction on permissible levels of cross contamination in baled paper waste has highlighted the value of New Zealand’s domestic recycling capacity.

Augmenting and enhancing local processing of recycled paper to manufacture the packaging needed to add value to New Zealand’s other exports secures a second life for these fibres. It anticipates the future value to New Zealand of domestic paper recycling and packaging, selling to a world increasingly recognising the circular economy as a cornerstone of a sustainable one.

Complementary fibresMost fibre-based packaging contains both virgin wood and recycled fibres in different proportions. Producing an effective product is not about choosing one or the other; instead, it is about deciding how much of each to use for the job required.

Virgin wood fibres are important where high humidity is present, high strength is needed or appearance and print quality are important.

Our ECOKRAFT™ range of kraft-top liners made at Kinleith Mill is an example of a hybrid combination of virgin wood fibre on the surface for colour and consistency and recovered fibre as the balance material.

TIMES

tonnes of glass collected by Fullcircle in 2018

7,262

tonnes of plastics collected by Fullcircle in 2018

5,254

tonnes of recovered fibre utilised by our Kinleith and Penrose Mills in 2018

190,298

260,305tonnes recovered fibre collected by Fullcircle in 2018

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Oji Fibre Solutions


of employees are salaried

of our employees are female

of employees are waged

of our senior managers are female

40%

17%

60%

11%

new graduated and apprentices

permanent new starters

voluntary turnover

22

231

12.4%

The strength of our people

The skill and passion of our 1,846 people is integral to our productivity and ongoing ability to meet our customers’ needs.

As a solutions company, we foster a culture of team work and problem solving to strive for improvements in the way we operate and to add value to our customers’ businesses.

Our people come from diverse backgrounds and skill sets. They are knowledgeable and experienced in the sector. More than 40% of our employees have been with the company for 10 or more years. Experience pays – labour productivity growth in New Zealand’s wood and paper sector was 11.6% higher than total industry growth between 2000 and 2018. Over the last decade, there was a notable uptick in growth of the sector.1

This also brings unique succession planning challenges, including the need to attract new employees to the sector.

We help our people reach their potential by providing opportunities to extend their knowledge and encourage their active involvement in professional employment and industry networks such as APPITA – the pulp and paper industry technical association.

Seven of our middle and senior managers completed the multi-module Post Graduate Certificate in Management (PGCert Management) with leadership specialisation at the Waikato Management School.

AGE PROFILE OF OUR PEOPLE

12%Under 30 years old

44% 30 to 50 years old

44% Over 50 years old

Developing our talent

Continuing our commitment to developing our people, we introduced myOjiFS learning management system in late 2018.

With each role in the business having its own set of learning requirements, myOjiFS enables learning opportunities to be tailored to individuals as well as job types. An example is operator skills training available on a machine-specific basis, as required by our individual manufacturing sites.

myOjiFS also enables effective scheduling, delivery and refreshing of instruction and training.

For the first time, each of our employees is able to view their personal learning history and the training assigned to them for their particular role. Each employee also has access to a growing catalogue of learning topics. These include production skills, leadership and supervisory management skills and personal productivity learning.

Through myOjiFS our people can access essential learning and topics that interest them to aid their personal and professional development.

EMPLOYEES PER BUSINESS UNIT

47%PULP AND PAPER 859 employees

29%PACKAGING

NEW ZEALAND 545 employees

17%PACKAING

AUSTRALIA 316 employees

7%CORPORATE

126 employees

1. sectorsdashboard.mbie.govt.nz/ ANZSIC codes: C14 & C15

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Oji Fibre Solutions


Attracting graduates

Our two-year Graduate Programme gives new engineering graduates the opportunity to work in our mills on a variety of engineering projects and to immediately apply skills learnt at university.

The programme is an integral part of Oji Fibre Solutions, recruitment and employee development. We look to hire and develop these graduates as our future.

In 2018, the technical teams at our Tasman and Kinleith Mills were joined by four graduates involved in the Mill Graduate Programme.

In their first year, we have introduced them to many aspects of our operation and encouraged them to lead their own project, requiring a range of technical skills, and helping them build rapport with our Operations Team members.

Training includes weekly Skype seminars with our in-house experts, covering topics such as health and safety, fibre quality, environmental management and kraft pulp and papermill processes.

These seminars are also open to a wider audience from across the business to encourage networking and broaden the understanding of our mill operations.

Summer internshipsEvery summer, our internships provide an opportunity for process, electrical and mechanical engineering students to gain an appreciation of our business.

Fourteen summer students joined our workforce at Kinleith and Tasman Mills at the end of 2018 for the summer.

This programme bridges the gap between university and working life by helping students build on the theory they have learned at university and apply this knowledge to real-world projects within the mills. Through having a mentor and running small projects, the interns gain an understanding of the processes and systems that support day-to-day mill operations.

Developing engineering students and graduates is an important part of Oji Fibre Solutions’ succession planning at our mills.

Our mill graduate programme is one example of how we are investing in our people’s development and training to futureproof our workforce.

Caring for our people

I’ve really enjoyed the variety of work and the processes within the mill. I had a good learning experience running the UKP O2 delig trial. It was really satisfying to make the process changes, get all the process samples and get meaningful results.

Joe Wilson Graduate at Tasman Mill

Having individual challenges set by each Chief Executive Leadership Team member gave an insight into what they are passionate about. Chief Executive Leadership Team Challenge participant

of our people are Flourish members

40%+

challenges completed in 2018

846

Oji Fibre Solutions supports employees to be the best they can be, both in their personal lives and at work. Our people are what make our organisation successful, and being happy and healthy in the workplace contributes to greater productivity and innovation.

A new focus on wellbeingIn 2017, we launched a new online wellbeing portal – “Flourish”– to support our commitment to the wellbeing of our people. It is designed to achieve health and fitness goals through giving our people and their families access to a range of health-related tools, such as recipes, exercise guides, health assessments, team and individual challenges and special discounts on health products and services.

NEW FOCUS ON WELLNESS

A highlight of the year was the Chief Executive Leadership Team Challenge, where members chose activities for participants to complete throughout the two-week challenge.

OUTCOMES INCLUDED

Commitments by 133 people to change driving behaviour to reduce their personal carbon footprints

In a combined effort, nearly 220 single-use-plastic-free days were achieved

A step up in exercise was achieved with more than 4 hours of skipping, 33 hours of cycle riding and 110 hours of walking by participants

At least one mindfulness activity in their daily routine was adopted by 121 participants

More than 100 participants wrote a note, letter or email of thanks to someone

A total of 846 challenges were completed by our people in 2018. These range from one to four weeks and cover wellbeing topics such as fitness, financial wellbeing, safe driving and leadership.

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Oji Fibre Solutions


Focusing on Health & Safety

1. The numerical targets reflecting participation in safety cultural and wellness initiatives previously identified are being reviewed to better reflect the work to make the H&S Mantras come to life.

2. Zero Serious Injuries: A serious injury is defined as any condition that results in a person being permanently disabled or requiring immediate in-patient hospitalisation.

3. Lost-time Injury Rate (LTIR): Frequency rate of accidents resulting in lost work time = (Lost-time injuries/total work time) *200,000.

4. Total Injury Rate (TIR): Frequency rate of accidents resulting in injury = (Lost-time injuries + restricted work injuries + medically treated injuries/total work time) *200,000.

5. A product safety incident occurs where a defective product (i) causes an injury to a person or material damage to property, (ii) leads to an end consumer recall because it could cause such injury or damage, or (iii) is the subject of a formal safety notification to the authorities.

OUR VISIONGood health and

safety performance is simply part

of what we do.

Don’t walk past a

problem

Think safe; act safer

Safety starts and ends with

me

Make the safe way the right

way

Take 5 to stay alive

2017 BASE YEAR1

2018 RESULTS

2020 TARGET

Zero Serious Injuries2 0 1 0

50% reduction Lost-time Injury Rate (LTIR)3 from 2017 levels by 2020 YE

1.09 0.82 (24%) 0.55

50% reduction Total Injury Rate (TIR)4 from 2017 levels by 2020 end

2.64 1.74 (33%) 1.32

Product safety 2015 base level5 0 0 0

OUR PROGRESS IN 2018

Dedicating time to safety

Our health and safety aim is simple: to send everyone safely home every day.

Oji Fibre Solutions is committed to managing our business in compliance with health and safety legislation and striving for best practice. Recognising all our employees contribute to a strong and positive culture, as well as our performance, we introduced five simple Health & Safety mantras in 2017.

In 2018, we reinforced our mantras by:

• Improving H&S communications to extend their reach and impact

• Enhancing the use of our risk management tool

• Redefining business unit level targets and improvement objectives

• Introducing myOjiFS learning management system.

We have also made significant improvements to our processes and plant safety. This focus contributed to achieving a reduction in notifiable incidents under New Zealand and Australian health and safety legislation. Over the course of 2018, we almost halved these incidents from a rate of 1.05 notifiable events per 200,000 hours worked to a rate of 0.55.

More details on our process safety improvements are on page 50.

Oji Fibre Solutions is an Accredited Employer at tertiary level of the Accident Compensation Corporation (ACC) Partnership Programme in New Zealand. Wherever possible, we provide our employees certainty in pay should they experience an accident either at or away from work and need to be off work for an extended time.

A strong and positive safety culture is crucial to our future success.

One of the ways we reinforce this culture is through dedicated site safety days. They are planned by site Health and Safety Committees with the aim of broadening employee skills and promoting engagement in health and safety.

These days are increasingly becoming a highlight on the annual calendar, as the following examples illustrate.

Our Paper Bag site employees enjoyed an action-packed Safety Day, where they attended presentations ranging from training on a defibrillator to learning how to put out a fire correctly.

Highlights of the day included competitions to hazard hunt the plant and external presentations from Southern Cross, Flex Physio, NZ Safety, Blackwood, AED Heartsaver and Firecorp.

Safety Day Olympics was the theme at Packaging New Zealand’s Central facility. Employees were grouped into four countries, each representing the environment, health, safety and risk pillars.

Games were used to promote learning around spill kit training, earthquake or emergency response and fire extinguisher training.

The focus on health and safety in our new Yatala packaging facility has been integral to its start-up. With several the production team coming from outside the corrugated packaging industry, they benefitted from two weeks of induction training before the plant opened. This was followed by four weeks of additional training, which included a daily safety session.

Having effective training, the right processes and systems in place and a culture of safety helps to keep our people safe.

HEALTH & SAFETY VISION AND MANTRAS

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Oji Fibre Solutions


We have to stay focused on what will sustain our future – that’s all about how we work, how we act responsibly and how we stay connected to our communities.

How we adapt and change to stay future focused

M A K I N G

C H A N G E

F U T U R E F O C U S E D


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Oji Fibre Solutions


With backing from the Oji Group, since 2016, we have invested more than $63 million to secure a sustainable future for the Mill and the local community.

Tasman Mill is ideally positioned in the Bay of Plenty forestry area. It has been the centrepiece of the Kawerau community since it was opened in 1953. With more than 250 employees, it is the single largest employer in the Eastern Bay of Plenty.

Situated within the Kawerau Geothermal System – the world’s largest application of geothermal energy for industrial use – and being adjacent to the Tarawera River, with the Kaingaroa Pine Forest nearby and the Port of Tauranga only 100km away by rail, the Mill’s location has many strategic advantages.

Renewable energy is already the main source of energy used at the mill delivering 88% of total energy requirements in 2018.

Over three years, we have refocused our pulp product mix and substantially changed the Mill’s energy systems through three major projects.

Making efficient use of biofuel energy

The decision to invest $22.2 million in a new evaporator system was made in 2016.

A modern evaporator system is key to improving the efficient use of organic black liquor as a biofuel. In essence, the evaporator is used to concentrate the wood lignin material that is produced when wood chips are digested to form pulp. It removes water, so the black liquor can be burnt in the recovery boiler and cooking chemicals can be recovered for reuse.

This project removed a bottleneck to increase production capacity by around 5% and to make more efficient use of biofuel.

Reducing environmental impact by simplifying our product mix

In January 2019, we ceased making bleach pulp. This project involved

simplifying the product mix of Tasman Mill to our world-class K25TM

Fibre Cement Pulp (FCP) and other unbleached kraft grades.

The Mill pioneered the manufacture of unbleached radiata pine softwood pulp for FCP, which is used internationally to reinforce cement-based building products with cellulose fibres. FCP replaces the use of asbestos fibre.

Manufacturing Unbleached Kraft Pulp (UKP) repositions Oji Fibre Solutions market pulp. Our paper-grade UKP is ideal for the production of containerboard and kraft paper. Customers have welcomed its strength, shade and cleanliness.

We are in the process of developing UKP products targeting the electrical insulation and filtration paper markets. Our UKP also opens opportunities to supply those innovating in developing new products with cellulose fibre.

We are committed to ensuring the long-term viability of the Tasman Mill and doing so in a way that reduces our environmental burden and also makes the Mill a safer operation for the employees and the community.Terry SkiffingtonChief Operating OfficerPulp and Paper

Transforming Tasman Mill

INVESTING IN REGIONAL NZ

ENERGY CONSUMPTION: 2018

EXPECTED OUTCOMES

870,000 GJ reduction in energy requirements

10,000 tCO2-e reduction in emissions

5% production increase

Coal eliminated

WATER DISCHARGES

Oji Fibre Solutions co-manages the wastewater treatment plant at Tasman Mill with the neighbouring operation Norske Skog Mill.

We are committed to reducing the colour of the discharge to the regulated target of less than 10 tonnes per day (Pt-Co Equivalent) by 2035, the point at which it is considered to be inconspicuous.

In 2018, average colour load of 13.5 tpd was well ahead of the interim target of 27 tpd. No longer bleaching pulp decreases colour load, and 2019 results are already showing substantial reductions.

Simplifying and streamlining the manufacturing process has also:

• Improved the colour of the effluent discharged into the Tarawera River

• Eliminated the use of bleaching chemicals and their storage, and their loss to the environment, which also delivers health and safety benefits

• Decreased total energy use, which delivers greenhouse gas emission reductions

• Improved process safety.

Increasing use of clean geothermal steam

Late in 2018, the Oji Fibre Solutions Board agreed a $4.2 million investment in a new steam line to secure additional clean geothermal steam and provide continuous supply to the Mill.

By partnering with Ngāti Tūwharetoa Geothermal Assets (NTGA), we have unlocked the potential to increase the use of clean geothermal steam and will be able to close an old power boiler. While the main fuel source for the power boiler is biomass (in the form of wood residues), this typically needs to be substituted with waste oil or coal to obtain the required energy output.

When complete in late 2019, the use of coal will be eliminated and waste oil will be significantly reduced. About 25% of the Mill’s annual energy requirements will be met by clean geothermal steam. This project also provides the opportunity for the wood waste no longer required at the Tasman Mill to be used as biofuel at Kinleith Mill.

Combined, these three projects are examples of our response to the changing international pulp market, innovating our production processes and making the most of biofuels and clean energy to reduce greenhouse gas emissions.

Transforming the Tasman Mill makes it more commercially sustainable as well as more environmentally and socially sustainable – keeping the facility viable over the long-term. It is part of a wider focus to improve production reliability and environmental outcomes of our two Central North Island mills: Kinleith and Tasman.

1. Black liquor is the substance that binds wood fibre (cellulose) and is generated as a waste when removing fibres for the pulp manufacturing process

69.5%Biomass: kraft black

liquor1, wood residues

18.4% Geothermal steam

9.3% Fossil fuels: natural gas, waste fuel oil, coal, diesel, petrol

2.8% Electricity

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Oji Fibre Solutions

Sustainability Report 2018 FUTURE FOCUSED

Surfa

ce water run-off and groundwater recharge

FORESTS WATER CYCLE

MANUFACTURING

Surface waterGroundwaterMunicipal water

Water in wood

Precipitation

Products

Evapo-transpiration

Non-fibre raw material Other water inputs

Water in products

Stea

m

Pro

cess

was

tew

ater

Waste

water

trea

tmen

t

Managing water use responsibly

All major process stages at our manufacturing sites use and reuse water – from log debarking to chip washing, pulp washing and screening - and in the paper machines.

Water is also used to generate steam for process heat and on-site power generation.

Our operations have a responsibility to use, treat and monitor water in accordance with environmental consents, trade waste permits and local regulations.

Our two largest sites, Kinleith and Tasman Mills, operate primary and secondary water treatment systems before discharging into local rivers. The discharge of treated process water is governed by strict resource consent requirements by the Waikato Regional Council and Bay of Plenty Regional Council.

Discharges are also regularly monitored and reported to the local councils for compliance with a range of parameters, including total suspended solids, biochemical oxygen demand (BOD), colour, toxicity, organic chemicals, chlorinated organic chemicals (AOX), pH, chemical oxygen demand (COD), nitrogen and phosphorus.

Our monitoring reports are available from the Councils or by contacting Oji Fibre Solutions.

ALL MANUFACTURING OPERATIONS:

THE WATER CYCLE

2018 New Zealand River AwardsEach year the Cawthron River Awards recognise river or streams that have shown the greatest improvement in a predetermined measure of water quality at a specific monitoring site and is based on the trend observed over the ten years.

In November 2018 the Tarawera River was a Bay of Plenty regional finalist for ‘most improved’ over the last decade.

WATER SOURCES 2018

Surface water 354 ML 76.2%Ground water 40,171 ML 23.1%Municipal water 12,194 ML 0.7%

Our river is worth protecting

Project Waikato is an initiative undertaken by Oji Fibre Solutions to improve and futureproof wastewater treatment systems at the Kinleith Mill.

The project involves significant investment in both wastewater management and treatment systems at the plant.

At its heart, it’s about increasing efficiency, reducing environmental impact, and preserving the integrity of the Waikato River.

We want to complete the project as soon as possible, so we plan to bring forward the renewal of our wastewater discharge consent, which is due to expire in 2023.

A significant step forwardWe have already been making improvements to our wastewater treatment. Since the current consent was granted in 2001, we have reduced biological oxygen demand by 33%, suspended solids by 62% and nitrogent by 24%. The new investment will further improve the quality of the discharges.

We have also begun work on projects within the Mill to reduce the amount of wastewater produced.

A new, state-of-the-art wastewater treatment plant at Kinleith will be a key stage in this project, allowing us to treat wastewater to a standard that meets international best practice.

SIGNIFICANT INVESTMENT PLANNED

Project Waikato: Wastewater treatment at Kinleith Mill

For more information, see cawthron.org.nz/foundation/ nz-river-awards/

Tooku awa koiora me oona pikonga he kura tangihia o te maataamuri.The river of life, each curve more beautiful than the last.Waikato River Authority

The project is driven by our principal owner, Oji Holdings, as part of their aspirations to reduce the environmental burden of their operations across the globe.

A global perspective

Significant multi-million dollar investmentChanges include the new wastewater treatment plant.

2019-2023We will begin wastewater reductions in 2019, aiming to complete the wastewater treatment phase of the project by 2023.

What we want to achieve We are yet to finalise targets, but as part of Project Waikato we are seeking to achieve meaningful reductions in the discharge of nutrients, suspended solids, oxygen demand and colour.

There will be several elements to the project. We are considering improvements such as replacing the existing aerated pond system, which currently provides secondary treatment, with a modern high- tech aeration system as well as an additional tertiary treatment system.

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Oji Fibre Solutions


Tiipene Marr grew up near the mouth of the Tarawera River. He has a strong voice on the health of the river and water use by the Tasman Mill.

When asked to contribute to this report I was initially sceptical, so I spoke to my people about whether this is an opportunity we wanted to take. They support this as part of a continuing conversation with users of the awa, including Oji Fibre Solutions, and welcome communication and engagement.

MEMORIES OF THE RIVER

My whānau lived in Matata, and I have early memories of my dad taking us whitebaiting at the mouth of Tarawera River. I remember fishing in the black waters of the river with pulp sitting on the nets. But my father, Bill Marr, knew what the river was like before the mills opened. Our people would catch whitebait and tuna from the river. We would gather watercress from its banks.

My father saw the river change when the Tasman and Caxton Mills were opened by the government in 1955. We would see drums in the river, and our mates would say the mills had dumped their rubbish. Now two generations have missed out on our traditional ways of using the river.

The Tarawera is part of our cultural identity, our way of life and our heritage. I come from a family where standing up and calling out the pollution of our river is important. My father was a leading light of the fight against pollution. He raised the issue with the owners of the mills. He talked to our community. He wrote letters to the editor about the pollution.

Coming back from overseas in the late 1970s, I took over from Dad. I would stand at the Thornton Bridge, just outside Matata, with “Black Drain” signs. Passing cars would toot their support.

Our voices were not alone. Many others have shown their concern about the state of the river. It became known as the “black drain”. In the bad old days, you could see the black water of the river and foam of pollution flowing out into the blue waters of the ocean.

Over the 30-plus years of protesting the state of the Tarawera River, I’d like to think have had an impact on raising the issue with communities, the prior and current owners of the mills and regulators and on the water quality and health of the river.

Voices of our community: the Tarawera River

LISTENING TO FEEDBACK

Ngāti Rangitihi iwi member and Bay of Plenty Regional Councillor Tiipene Marr has long protested pollution of the Tarawera River.

Oji Fibre Solutions thanks Tiipene for his honesty and sharing his knowledge and experiences.

Oji Fibre Solutions asked Tiipene about his driving force for protesting the levels of pollution in the Tarawera River and the changes he has seen since December 2014, when the company took over ownership of the Tasman Mill. Below is an extract of our conversation with Tiipene.

In 2009 when Carter Holt Harvey and Norske Skog, the previous owners of the Tasman Mill, sought a new resource consent application, I fought against granting them the right to keep drawing water and discharging their effluent into the Tarawera. I would have like to have seen investment in a new filtration plant.

Although historically we have been isolated from the Tarawera because of pollution, our people who worked at the mills in Kawerau have nothing to feel guilty about. We know the mills have provided a chance to make a living locally.

CHANGES OVER THE LAST DECADE

While the awa has improved since the resource consent was issued in 2010 and after Oji purchased the pulp mill in 2014, it is not over for Oji Fibre Solutions. You are trying to improve the quality of the discharges, but not as hard as we would like. More needs to be done to make the Tarawera beyond the mills swimmable, so that we can once again enjoy fishing and enjoy our Maoritanga. The long-term effects of pollution on the people and our culture cannot be underestimated.

We now have a Memorandum of Understanding and welcome participation in cleaning up the river and converting the swamp area into wetlands. However, there is not enough funding behind this to see the significant changes needed.

I do see a change in attitude, a growing awareness of sustainability, of leaving something better for the kids and a recognition that it will cost more to clean up the river in the future.

As our generation is responsible for the pollution, it is up to us to improve the awa. It’s about the future for our tamariki and reconnecting with the cultural heritage of our river.

WORKING TOGETHER CONSTRUCTIVELY IS UNDERPINNED BY A MEMORANDUM OF UNDERSTANDING.

In 2010, Te Ru–nanga o Nga–ti Awa, Nga–ti Rangitihi, Ngāti Tu–wharetoa Settlement Trust, Carter Holt Harvey Pulp & Paper Ltd and Norske Skog Tasman Ltd signed a Memorandum of Understanding with the purpose of setting out shared objectives and to work constructively on environmental matters concerning the mills and in particular the mills’ activities on the Tarawera River.

Since taking over ownership of the pulp mill at Tasman, Oji Fibre Solutions has strived to play our part in improving the environmental quality of the Tarawera River. We have:

• Listened to community concerns

• Actively engaged with Iwi through our commitments under the MOU

• Monitored and improved treatment of effluent discharges

• Defined and implemented a colour research programme

• Continuously reduced colour load to levels well below consented targets

• Eliminated the use of bleaching chemicals and their loss to the environment (see Transforming the Tasman Mill on pages 36 & 37).

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Oji Fibre Solutions


43%Sodium hypochlorite

33,944tonnes of beneficial chemicals and by-products produced by our milling operations:

34%Tall oil

Maximising beneficial reuse of resources

In producing pulp and paper, our Kinleith and Tasman Mills also manufacture a range of chemicals as by-products.

Two wood-based by-products are crude tall oil, a precursor for a range of industrial chemicals and resins, and crude sulphate turpentine, for use in the production of a wide range of chemicals from perfume bases to disinfectants.

Other chemical by-products include liquid chlorine and hydrochloric acid, used by municipal water treatment, and sodium hypochlorite, typically used in swimming pools and household bleach.

1. A non-compliance with environmental laws and/or regulations is defined as an event resulting in a limit violation, or a warning, fine or other sanction from the regulator

2. Results exclude new to group Yatala and Cardboard Carton Solutions plants (80t in 2018). 2015&17 results adjusted due to landfill stockpiles held at Tasman Mill artificially lowering the results

3. GHG emission intensity is defined as tCO2-e direct (Scope 1) and indirect (Scope 2) emissions per tonne of total output. Total output includes market pulp, containerboard, fibre-based packaging products, chemicals and by-products

Creating value from using and recycling our own waste and waste from others.

• Forestry and sawmill residue and waste is used in our operations

• Sludge from our wastewater treatment facilities is used as the main component of vermicompost, which is used for agricultural purposes

• Lower quality biomass from sawmilling, forestry activities and our own chipping and debarking operations is used as bio-fuel

• We recover quality fibre to make value-added products.

190,298 tonnes of recycled fibre converted into containerboard products.

15%Hydrochloric acid

5%Turpentine

3%Chlorine

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Oji Fibre Solutions


Inspired by Oji Holdings’ aspiration to act in harmony with nature and society to achieve zero environmental burden, we have adopted three challenging environmental targets.

Targeting zero environmental burden

TARGETS2015

Base year2017

Results2018

Results 2020 Target

Zero non-compliance with environmental laws and regulations1 0 1 1 0

30% (dry basis) reduction in waste to landfill from 2015 levels before the end of 20202 41,165t 40,776t 44,780t 28,816t

6% reduction in GHG emission intensity from 2015 levels before the end of 20203

0.270

tCO2-e/t

0.291

tCO2-e/t

0.288

tCO2-e/t

0.254

tCO2-e/t

We are committed to complying with our legal obligations, and each year we strive to achieve zero non-compliance with environmental laws.

Recognising that one of the key issues of our time is climate change, and the necessity for decarbonisation, Oji Fibre Solutions adopted challenging emissions intensity reduction targets.

Being part of the circular economy, maximising beneficial reuse of resources and targeting reductions in waste to landfill is also key in our journey to a sustainable future.

We hold more than 40 environmental consents for our mills and packaging facilities in New Zealand and Australia.

Our facilities are subject to numerous conditions in relation to factors such as water abstraction, water quality, waste discharges, air quality and environmental monitoring.

TARGET: Zero non-compliance with environmental laws and regulations.

In 2018, we recorded one environmental non-compliance at our Lansvale site, when suspended solids exceeded trade waste consent limit for one day. No action was required by the consenting authority, and the site was confirmed to be operating within consented parameters the following day.

We regularly carry out compliance audits internally and by external third-party auditors to identify opportunities for improvement.

FUTURE FOCUSED

The transformation of the Tasman Mill is set to deliver multiple benefits, including improved environmental outcomes.

By unlocking the potential to use more clean geothermal steam, we can decommission an old power boiler. As a result, we expect to reduce CO2-e emissions from the Tasman Mill by 10,000 tonnes per annum and will be eliminating the need to landfill the ash created by the power boiler. These improvements should start to show in our greenhouse gas and landfill results from 2019.

In addition, we are well ahead of the regulated target to reduce the colour of the water discharge from Tasman Mill to less than 10 tonnes per day. This is the point at which it is considered inconspicuous. Measurements in early 2019 indicate we have already achieved the regulated target.

Please refer to pages 36 and 37 for more information on our transformation of the Tasman Mill.

43.6%To landfill

32.4% To recycling

23.6%To compost

0.4%Hazardous waste

WASTE STREAMS

Targeting waste to landfill

Transitioning to a low carbon economy requires rapid and far-reaching changes and the adoption of smarter ways of working and better resource use.

Oji Fibre Solutions believes pulp and paper – natural, renewable and recyclable and biodegradable products made from sustainable forestry resources – are part of the solution and will make a huge contribution in the transition to a low-carbon economy.

Climate Leaders Coalition

On 25 July 2018, we joined forces with 60 other like-minded businesses to commit to this transition at the launch of the Climate Leaders Coalition.1

We are pleased that more businesses are joining the Coalition and are committing to collective action on the issue of climate change.

With the backing of the Oji Group, the fifth largest pulp and paper company in the world, and its guiding philosophy ‘Beyond the Boundaries’, we are committed to transcend traditional boundaries to achieve further environmental improvements and to meet the challenge of taking action on climate change.

For the generations after us, for the country we love, for the viability of our businesses, we are ambitious for action on climate change. If we act now we can forge a path to create a future that is low-emission, positive for our businesses and economy, and inclusive for all New Zealanders.

We are committed to playing our part to make that future real. If we don’t, our competitiveness is at risk.

We take climate change seriously in our business:

• We measure our greenhouse gas emissions and publicly report on them

• We set a public emissions reduction target consistent with keeping within 2° of warming

• We work with our suppliers to reduce their greenhouse gas emissions

We believe the transition to a low emissions economy is an opportunity to improve New Zealand’s prosperity.

• We support the Paris Agreement & New Zealand’s commitment to it

• We support introduction of a climate commission and carbon budgets enshrined in law

2018 CLC STATEMENT

45

Oji Fibre Solutions


TARGET: 30% (dry basis) reduction in waste to landfill from 2015 levels before the end of 2020.

We continue to strive to find beneficial and economically viable uses for our production waste to minimise our waste to landfill and further promote the circular economy.

In 2018, production issues resulted in higher than anticipated levels of ash, lime and mud waste, principally from our two large pulp mills. This, and the closure of the composting service used by the Penrose recycling mill, has resulted in more landfill than optimal.

Our Packaging New Zealand sites decreased waste to landfill by 17% between 2017 and 2018.

In 2018, Packaging New Zealand converted its Southern Facility’s boiler from coal fired to a cleaner burning option. This resulted in the double benefit of eliminating the need to dispose of boiler ash and reducing emissions from the site. The transformation of the Tasman Mill, which includes the closure of a large power boiler in 2019, will result in less landfill and emissions from that site.

Smaller improvements have also contributed to reducing landfill from our packaging operations.

Our packaging sites encourage our suppliers to exercise product stewardship to further the circular economy. An example is the treatment of surplus ink, which is either reintroduced into the printing process or collected by our supplier to be remixed and repurposed.

Alternatives for sending waste to landfill are always explored; waste is sent to landfill only when no viable alternative can be found.

We have achieved an 85% reduction in rates across our 10 packaging sites in Australia and NZ.

WASTE TO LANDFILL

0

20

10

30

40

45

50

5

25

15

35

55

2015 2017 20182016 2020 target

41,1

65

40

,175

40

,776

44

,70

0

28,8

16

1. A group of New Zealand businesses

FUTURE FOCUSED

New Zealand 20181,2

Australia 2016/20173World 20164

83.3%

18.9% 24.3%

Purchased electricity In 2018 some 5.8% of our energy use was purchased electricity. The majority of this (98%) was used by our New Zealand manufacturing operations.

INTERNAL ELECTRICITY GENERATION:

Tasman Mill

56%

41%Kinleith Mill

WOOD WASTE PUT TO PRODUCTIVE USE AS BIOMASS, APPROX:

1/3is site generated from our chipping and debarking operations

2/3is from third-party sawmilling and forestry activities

18%of power used by Tasman Mill

GEOTHERMAL STEAM:

1. GHG emission intensity is defined as tCO2-e direct (Scope 1) and indirect (Scope 2) emissions per tonne of total output. Total output includes market pulp, containerboard, fibre-based packaging products, chemicals and by-products

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Oji Fibre Solutions


Targeting GHG emissions

As one of the largest consumers and producers of energy in New Zealand, the mix of energy we use is important. We are constantly seeking ways to increase our energy efficiency.

We produce renewable energy at large scale to power our pulp and paper mills, and we constantly work to reduce our reliance on fossil fuels.

Energy is generated at our Kinleith and Tasman Mills, primarily from biomass. The kraft pulp process produces black liquor, which is reused as an energy source in the production process. This is supplemented by wood wastes, including sawdust, bark and remains of fibres, while the Tasman Mill draws geothermal steam from a local bore owned and operated by local M–aori Ng–ati Tūwharetoa.

Using renewable energy means we have less reliance on fossil fuels, mitigating to greenhouse gas emissions.

78.6%RENEWABLE ENERGY TOTAL Biomass and geothermal steam.

OUR ENERGY CONSUMPTION PROFILE MANUFACTURING OPERATIONS: ENERGY SOURCES, 2018

RENEWABLE FUEL SOURCES HYDRO, SOLAR, WIND, BIOMASS, GEOTHERMAL STEAM

72.4%Biomass

6.2%Geothermal steam

12.5%Natural gas

2.9%Oil-based fuels

0.2%Coal

5.8%Purchased electricity

1. Four-quarter moving average ending 31/12/2018

2. New Zealand Energy Quarterly, December Quarter 2018 (MBIE: www.mbie.govt.nz)

3. 2018 Australian Energy Statistics, March 2019 (www.energy.gov.au)

4. IEA Key World Energy Statistics, 2018 edition (www.iea.org)

FUTURE FOCUSED

TARGET: 6% reduction in GHG emission intensity from 2015 levels before the end of 2020.1

We are pleased to have decreased our carbon intensity in 2018 despite needing to alter our energy mix due to incidents outside our control.

In late 2018, there was a shortage in natural gas supply in New Zealand. Our pulp mills were also affected by a lightning storm across the North Island of New Zealand.

Each year, we take action to reduce our GHG emissions. Two key programmes delivering immediate results in 2018 were at our Packaging New Zealand facilities: changing a coal fired boiler to a more efficient, cleaner burning fuel source; and converting the fork hoist fleet to electric power.

Now 92% of the fleet is electric powered. Options to change other mobile equipment such as floor sweepers and clamp trucks to electric power are being progressed.

GHG INTENSITY

0.23

0.27

0.25

0.29

0.24

0.28

0.26

0.30

0.2

70

0.2

87

0.2

91

0.2

78

0.2

54

2015 2017 20182016 2020 target

While Packaging Australia has changed some hoists to electric power, due to the proportion of purchased electricity that is generated from non-renewable fuel sources in Australia, there are fewer immediate environmental benefits from switching.

As part of our ongoing energy efficiency drive, we continued our programme of replacing fluorescent lights with LED lights.

With the decommissioning of an old power boiler at Tasman Mill further emissions reductions are on the horizon.

We are as good as the partnerships we make, so we work hard to build relationships that last and move us all forward.

How it takes true partnership to grow and improve

G R O W I N G

T O G E T H E R

T R U S T E D P A R T N E R


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Oji Fibre Solutions


Hazardous chemicals held on-site

Emergency scenarios and risks

Procedures for containing and controlling accidents

Coordination roles and personnel contract details

Alarms, evacuation procedures and community response information

Training and preparedness plans

EMERGENCY RESPONSE PLANS DETAIL

WORKING WITH OUR COMMUNITIES

Safety plans

Engaging our communities about our response plans

In developing our Safety Cases we consulted extensively with Civil Defence, Police and emergency services to access the best advice and ensure response services are across our plans.

We also actively engaged with our communities. Our people manned safety information hubs in Tokoroa and Kawerau to speak to as many people in the wider community as possible about our mill operations and incident management response plans.

Our engagement focus in 2019 is on refining our approach to quickly communicate with the community. It is important that everyone knows what to do in advance and that we get the messages out to emergency response services and the wider-community as quickly as possible. We are meeting with local industry, farmers and vulnerable groups, such as schools and hospitals.

We are also developing an information booklet for each business, school and home to have on hand.

Commitment across the business from the Board down is resulting in year-on-year reduction of the risk profile across both Mills and is embedding systematic approaches to process safety.

We are confident that the risk profiles at our Mills have reduced, and our preparedness for the unlikely event of a major incident has improved. Continuing to engage with our communities will help to ensure they are prepared too.

TRUSTED PARTNER

The safety of our people and the communities in which we operate is personal.

Our milling operations in Tokoroa and Kawerau have been part of those communities for more than 60 years, with several generations of the same families being employed by the sites.

These two Mills are defined as Major Hazard Facilities sites by New Zealand Health and Safety legislation. This makes it even more important to consider the impact the Mills potentially could have on their communities.

We also recognise our responsibility to ensure a major incident at the Mills would not negatively impact on the surrounding environment.

In April 2018, we submitted our Safety Cases to WorkSafe New Zealand detailing our ability and means to effectively control major incident hazards. Controls can be preventative (measures that stop the major incident from occurring) or mitigative (measures that reduce the effect of a major incident, in the unlikely event it occurs).

While our priority is to try to eliminate the risk of a major incident occurring, we also need to ensure we have properly defined the actions we will take in the unlikely event of major incident occurring.

The following three elements come together in our safety cases to provide a framework for identifying and implementing preventative and mitigative controls at the Mills:

• Developing scenarios of potential incidents that might affect our people on-site and in the surrounding communities and identifying the best ways to control and reduce the risks. We also continually review our plans to ask if they are enough and what we could do better

• Honing our Safety Management System (SMS) to ensure we take a systematic approach to reducing risks

• Embedding emergency response plans into operations to govern how we would manage a major incident and how we would minimise the effects for our people and our communities.

We take our safety responsibilities seriously and are striving to go beyond legal requirements for how we assess and plan for a potential incident at our Kinleith or Tasman Mill.

Now the focus at the Mills is on systematically assessing our process risks and refining our controls to reduce potential risks and communicating with our communities.

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Oji Fibre Solutions


We are active in our local communities

Our activities are centred on being a trusted partner in our local communities. We have partnered with local projects for several years, with the aim of being consistent in our relationships and developing shared knowledge and understanding.

This year, we take a closer look at our support for the Graeme Dingle Foundation and new partnership with the NSW Foodbank.

Graeme Dingle Foundation

Partnering with the Foodbank

Oji Fibre Solutions is a long-standing supporter of the Graeme Dingle Foundation, particularly the Kiwi Can and Stars programmes in Tokoroa, the community in which our Kinleith Mill is based.

Kiwi Can and Stars offer children year-long educational programmes that complement the school curriculum and help young people develop their self-confidence and unlock their potential. We share this strength-based spirit and are committed to building a strong future in our local communities.

The programmes are sequenced to be positive vehicles for change for young people. Everyone who participates in these programmes is bravely venturing outside their experiences and comfort zone on a transformational journey.

The value of these programmes, which promote self-worth, and the life skills to support local young people in their transition into positive adults, are limitless. To move, ‘Beyond the Boundaries’, is an aspiration Oji Fibre Solutions shares.

In line with our growing presence in the Australian market, we have extended our community sponsorship to the New South Wales Foodbank.In 2018, we were approached by Foodbank NSW about the potential to provide cartons.

Oji Fibre Solutions understands the important role of Foodbank NSW in sourcing food donations and distributing it to registered charities working with people in need.

We also understand the importance that well designed packaging plays

In 2018, we extended our support of the Graeme Dingle Foundation’s good work by sponsoring the Outstanding Contribution Award at the National Excellence Awards. Chief Operating Officer, Terry Skiffington, presented the award to Dan Allen-Gordon, who was recognised for his many years of mentoring school children and helping them to achieve their full potential.

The programmes we support are located at the following Waikato schools: David Henry School, Mangakino School, Tokoroa Central Primary, Tainui Primary, Whakamaru School, Tokoroa High School and Forest View High School.

in safely transporting the donations from Foodbank to the charities and on to the final recipients.

Knowing that packaging can be a mark of respect for those receiving food parcels, instead of donating a generic box, the Lansvale Packaging team designed and donated a ‘bread box’ made from our recycled board.

While our sponsorship started with the donation of bread boxes, the New South Wales sales team is looking forward to donating their time as volunteers to help pack products that are then distributed to the selected charities.

We are proud to be supporting the community by doing what we do best: delivering a purposed designed packaging solution with great presentation.

Award winner Dan Allen-Gordon with Terry Skiffington

Foodbank receives and collects food and grocery donations, which it then distributes to charities, who then distribute to people in need; providing food relief and making positive differences in their lives.

LOCAL COMMUNITY

GRAEME DINGLE FOUNDATION

12projects provided long-term support

1000+students supported annually

2High Schools:

• Tokoroa High School

• Forest View High School

5Primary Schools:

• David Henry School

• Mangakino School

• Tokoroa Central Primary

• Tainui Primary

• Whakamaru School

TRUSTED PARTNER

$87,500contributed to the Graeme Dingle Foundation

By 2050, New Zealand will be the best place in the world for kids to grow up.The Graeme Dingle Foundation vision

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Oji Fibre Solutions


Making natural origins count

Making sustainable packaging solutions

TRUSTED PARTNER

A shared commitment to products with provenance led to a strong partnership.

Oji Fibre Solutions’ beverage customer, The Apple Press® is a recent start-up, in a new state-of-the-art Krones manufacturing facility in the Hawke’s Bay of New Zealand. In 2018, we worked together on wrap-around packaging products for their juice lines.

The Apple Press cold press single variety Hawke’s Bay apples: Braeburn, JazzTM, Royal Gala, EnvyTM and Pink LadyTM. This enables the customer to experience the taste of a single variety and to know the source of the juice.

The Apple Press also sustainably sources cosmetically blemished apples that others reject on appearance grounds. The apples can be traced back to their orchards of origin.

Knowing packaging is an important element of the brand and wanting to work with a supplier that shared its natural origins approach, Oji Fibre Solutions is an ideal partner for The Apple Press. Not only can our virgin cardboard packing be tracked back to the location from which the wood was harvested, or in the case of recycled content from the mill at which it was reprocessed, our packaging is also recyclable.

The Apple Press is progressively transitioning the whole product range to cardboard packaging to deliver a sustainable packaging solution. It is also a good-looking box in which to deliver premium products to their customers and Facebook fans who may have been lucky enough to win The Apple Press prize packs or even a ‘year’s supply’!

Our Paper Bag facility has invested in new technology enabling quick response codes (QR codes) to be printed directly on our paper bags. By using these codes we can access the time and date the bag was made. We continue to talk to customers about any additional information they would like to be able to access through QR code technology.

From an export perspective, The Apple Press considers it crucial that the packaging protects and is an extension of their sustainable premium products. It is also important that the brand is showcased with high-quality printing on the outer packaging the entire way through the supply chain.

Oji Fibre Solutions has responded to any changes we’ve required quickly and with good customer service.

Amanda Lyon Head of Marketing The Apple Press

For more information on The Apple Press products, please see theapplepress.co.nz

It starts with wood-residuals from sustainably managed plantation forests in the central North Island of New Zealand.

Forest

The variety of paper grades we make start the same way: by suspending pulp (or recycled paper that has been repulped) in water on the continuous belt of the paper machine. Chemicals are added to provide specific qualities to the final paper, and the fibre is pressed and dried before being wound onto a parent reel. The paper is available for use by OjiFS Packaging facilities to make paper bags, paper cups and speciality corrugated board. This paper is also sold to external customers.

Paper

Residuals of the digesting process – black liquor, woody knots, chips & bark – are put to use as biofuel.

Recovery boiler and Evaporator

The containerboard is now available for sale and use by our packaging facilities to make quality cardboard boxes that have been designed, printed and custom cut to meet our customers’ needs.

Box

Wood chips are cooked at high pressure in a digester to unlock the cellulose fibre from the lignan that bonds the fibres together.

Wood chip

To form corrugated board, at least 3 sheets of paper are brought together: the top liner; a fluted (corrugated) medium and a bottom liner.

Corrugator

The fibre is washed and screened and, if appropriate, bleached using a 100% elemental chlorine free (ECF) process. The fibre is dried and is ready to be cut, compressed and packed for sale on the international market or stored on-site to be formed into paper.

Pulp

Our attention to the design details of our packaging solutions protects our customers’ products so they arrive as intended: in quality packaging that reinforces their brand. Once the customer has used the item (hopefully many times over) the box is ready to be recovered to start the cycle again.

Customer

Repulping

We have introduced the option of printing QR codes on our multi-wall bag, giving our customers a way to uniquely identify each bag.

Brent Coutts Facility Manager, Paper Bag

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Oji Fibre Solutions


Our awards

TRUSTED PARTNER

Our certifications and standards

ENVIRONMENTAL

Forest Stewardship Council® Chain of Custody (CoC) certification for pulp at both the Kinleith and Tasman Mills and for paper at Kinleith Mill.

Programme for the Endorsement of Forest Certification (PEFCTM) Chain of Custody (COC) certification for pulp at both Kinleith and Tasman Mills and for Paper at Kinleith Mill.

ISO 14001:2015-certified Environmental Management System at Tasman Mill.

FOOD SAFETY

ISO 22000:2018-certified Food Safety Management System at Packaging NZ Northern and Packaging NZ Southern.

ISO 22000:2005-certified at Packaging NZ Central.

Hazard Analysis and Critical Control Point (HACCP) compliance at Foodservice Packaging and Paper Bag where the HACCP applies to hygiene bag specifications for the manufacture of multi-ply bags for the dairy and food industry under a Food Safety System.

QUALITY

ISO 9001:2015 certified at our mill sites as follows:

- Kinleith for the design, development and dispatch of paper and the final drying, baling and dispatch of pulp.

- Tasman for the final drying, unitising and dispatch of pulp.

- Penrose for the manufacture and supply of paper.

ISO 9001:2015-certified Quality Management Systems at all Packaging New Zealand sites. Packaging Australia sites are certified as follows:

- Yatala, Lansvale and Noble Park manufacturing sites.

- Foodservice Packaging for the manufacture of paper containers for food and beverage for food service applications.

HEALTH & SAFETY

AS/NZS 4801:2001 Occupational Health and Safety Management System at Packaging Australia:

- Lansvale

- Yatala

- Noble Park.

Accredited Employer at tertiary level of the Accident Compensation Corporation (ACC) Partnership Programme in New Zealand.

AUSTRALASIAN PACKAGING INNOVATION & DESIGN AWARDS (PIDA)

2018DOMESTIC & HOUSEHOLD CATEGORY: HIGHLY COMMENDED

Feed my FurBabyUse of cardboard in industry dominated by plastic packaging, and includes a cut-out window and custom portion-control scoop.

2019FOOD CATEGORY: BRONZE AWARD

RJ’s Licorice Open top and open front shelf friendly packaging that was designed to handle export from New Zealand to Australia and stacking from pallet displays straight into supermarkets.

2019HEALTH, BEAUTY & WELLNESS CATEGORY: BRONZE AWARD

EcoStore Gift packs that hold products in place in smaller, lighter, eco-friendly 100% recyclable and compostable boxes.

Yatala facilityFor our Yatala state-of-the-art packaging facility in Queensland, Australia. Sustainability is designed into the plant, including a five-star environmental rating, automation and interconnectivity of machinery.

FOOD & BEVERAGE AWARDS

2018BEST IN DESIGN


Oji Fibre Solutions

Our memberships

Australian Packaging Covenant Organisation (APCO)

Bioenergy Association

Business Leaders’ Health & Safety Forum (ZeroHarm)

Business New Zealand

Climate Leaders Coalition

EMA

Forest Owners Association

Major Electricity Users Group

New Zealand Shippers Council

Packaging NZ

Paper Forum New Zealand

Sustainable Business Council (SBC)

Technical Association of the Australian and New Zealand Pulp and Paper Industry (Appita)

The Charted Institute of Logistics and Transport

WasteMINZ

Wood Council of New Zealand

Wood Processors & Manufacturers Association (WPMA) of New Zealand

Zero Waste Network

Partnership in Action: AppitaOji Fibre Solutions is one of the 120 company members of Appita, and many of our employees are professional members. Desirae Kirby was the New Zealand Section Chairperson for Appita in 2017-2018.

During my tenure my key focus has been on increasing the participation of younger members.

Desirae KirbyAppita NZ Section Chairman (2017-2018) Oji Fibre Solutions Research Programme Manager, Wastewater Colour

TRUSTED PARTNER

WHAT IS APPITA?

Appita is a stakeholder-driven organisation that facilitates the advancement of technical capability and expertise in the Australian and New Zealand pulp and paper industry. With over 1,100 members, we bring together a diverse group of mill staff, researchers, consultants and suppliers to share their experiences and world-class best practice.

HOW IS OJI FIBRE SOLUTIONS INVOLVED?

Oji Fibre Solutions is an active supporter of Appita as a member and regular sponsor. It is also involved in the Company Membership scheme, which provides our staff with access to technical meetings, training, conferences and journals. Part of Appita’s mission is to promote innovation that aligns with Oji Fibre Solutions corporate values of Innovation and Future Focus.

AS NZ SECTION CHAIRPERSON WHAT DID YOUR ROLE INVOLVE?

My role as NZ Section Chairman was to work with our national committee to deliver relevant training opportunities and to seek out expert speakers for our meeting programmes. We regularly include speakers from outside our industry to keep our members updated on national and global economic and sustainability issues that impact on our customers and our communities.

In 2015, the United Nations adopted 17 Sustainable Development Goals (SDGs) to end poverty and ensure prosperity for all, while protecting the planet.

The SDGs define the agenda for inclusive economic growth to 2030, offering a roadmap for business, government, NGO and community sectors to engage with each other and deliver on the SDGs.

In New Zealand there is momentum on the SDGs and cross-sector engagement to transform practices, products and services and the communities in which businesses are located.

By driving for sustainable outcomes and living our values of being built on strength, innovation, being future focused and a being trusted partner, Oji Fibre Solutions is contributing towards the SDGs and positive change.

Human history has been deeply influenced by the use of wood. Using wood is part of the common cultural heritage of humanity, and it is time we recognise the wider benefits sustainable wood can bring to society, the economy and the natural environment and that we advocate for its use.

Andrea StoccheroScion’s Sustainable Architect & representative at SW4SW1

for the international wood design and construction sector, New Zealand and Scion.

1. United Nations Food and Agriculture Organisation and partners hosted the Sustainable Wood for a Sustainable World (SW4SW) global meeting to discuss how forests and the use of sustainable wood products can contribute to the SDGs.

SUSTAINABLE DEVELOPMENT GOALSUnited Nations

Sustainable Development Goals

OJI FIBRE SOLUTIONS IS A MEMBER OF THE FOLLOWING ORGANISATIONS

Desirae’s Chairmanship is an example of the way our people are personally committed to progressing the industry.


Oji Fibre Solutions

Environmental dataOji Fibre

Solutions 2015

Oji Fibre Solutions

2016

Oji Fibre Solutions

2017

Oji Fibre Solutions

2018

Kinleith Mill

2018

Tasman Mill

2018

Penrose Mill

2018

Packaging NZ

2018

Packaging Aus1 2018

Units

OUTPUTS2

Market pulp and containerboard products tonne 940,204 912,074 928,664 905,715 549,151 270,898 84,215 0 0

Fibre-based packaging products tonne 175,293 182,753 187,543 214,285 0 0 0 136,642 77,643

Chemicals and by-products3 tonne 35,911 35,326 35,786 33,944 16,396 17,548 0 0 0

Total outputs2 tonne 1,151,408 1,130,153 1,151,993 1,153,944 565,547 288,446 84,215 136,642 77,643

RAW MATERIALS

Fibre inputs

Virgin wood (logs and chips) tonne 3,521,473 3,464,744 3,563,251 3,499,356 2,211,913 1,287,442 0 0 0

Market pulp tonne 9,538 10,559 8,058 7,455 7,455 0 0 0 0

Recovered fibre tonne 209,844 203,563 205,605 190,298 87,794 0 102,504 0 0

Paper, containerboard, wrapping, cores tonne 195,660 201,400 204,205 215,505 2,205 0 212 132,965 80,124

Total fibre tonne 3,936,515 3,880,266 3,981,119 3,912,614 2,309,367 1,287,442 102,717 132,965 80,124

Other significant inputs (approximate)4 tonne 118,453 114,301 114,609 97,091 54,630 32,095 706 8,047 1,613

ENERGY CONSUMPTION

Direct sources

Biomass: kraft black liquor, wood residues GJ 21,431,008 21,070,039 21,088,935 20,333,015 13,785,913 6,547,102 0 0 0

Fossil fuels5: natural gas, waste fuel oil, fuel oil, coal, diesel, petrol, LPG

GJ 3,561,501 4,205,551 4,646,002 4,390,835 2,873,106 879,912 465,973 92,849 78,995

Indirect sources (purchased)

Electricity GJ 1,861,902 1,748,706 1,587,752 1,628,989 1,138,585 264,420 146,805 47,313 31,866

Steam GJ 287,070 0 0 0 0 0 0 0 0

Geothermal steam6 GJ 1,408,426 1,591,588 1,734,418 1,730,799 0 1,730,799 0 0 0

Total energy consumption6 GJ 28,549,907 28,615,884 29,057,106 28,083,638 17,797,604 9,422,233 612,778 142,517 110,861

Electricity generation (fuels included above) GJ 1,284,089 1,217,413 358,429 314,616 220,766 93,850 0 0 0

WATER WITHDRAWAL

Municipal supply Ml 370 377 344 354 0 41 246 46 22

Surface water Ml 43,727 44,086 41,995 40,171 20,480 19,691 0 0 0

Ground water Ml 10,772 10,914 11,764 12,194 11,651 0 542 0 0

Total withdrawal Ml 54,869 55,376 54,103 52,719 32,131 19,732 788 46 22

EMISSIONS TO AIR

Scope 1 (direct) emissions (CO2-e)5,7 tonne 220,067 257,932 279,308 267,971 173,771 58,798 25,209 5,825 4,368

Scope 2 (indirect) emissions (CO2-e) tonne 91,172 65,992 56,123 63,630 30,981 19,543 3,995 1,287 7,824

Total Scope 1 and 2 emissions (CO2-e)5,7 tonne 311,239 323,924 335,431 331,601 204,752 78,341 29,203 7,113 12,192

Biomass CO2 emissions8 tonne 2,011,646 1,883,750 1,884,677 1,834,460 1,222,742 611,717 0 0 0

WASTE9

To landfill (approximate) dry tonne 39,507 40,507 42,103 44,780 24,576 9,148 9,467 1,252 338

To recycle dry tonne 26,900 30,225 29,317 33,173 758 1,704 0 20,777 9,934

To compost / vermicompost dry tonne 19,448 21,075 19,925 24,149 15,569 8,579 0 0 0

Hazardous waste (incl. EPA, Victoria) tonne 76 339 195 439 270 0 0 0 169

DISCHARGE TO WATER10,11

Volume Ml 55,722 56,778 57,323 75,277 33,698 20,789 300 N/A N/A

Treatment 1° & 2° 1° & 2° N/AMunicipal treatment

Municipal treatment

Discharge to Waikato

RiverTarawera

RiverMunicipal

sewerMunicipal

sewerMunicipal

sewer

Total Suspended Solids (TSS)12 tonne 1,193 749 102 N/A N/A

Biochemical Oxygen Demand (BOD)12 tonne 533 663 886 N/A N/A

A zero (0) in the table signifies the parameter is either not applicable or not material. ‘N/A’ signifies that the parameter is not available.1. Data includes new Yatala and Cardboard Carton

Solutions sites from 2018 2. Outputs are gross; i.e. includes internal transfers

between sites.3. Chemicals include: liquid chlorine, sodium

hypochlorite and hydrochloric acid. By-products include: crude tall oil and crude sulphate turpentine.

4. Other significant inputs include: Kinleith Mill: Alum, bale wire, burnt lime,

caustic soda, calcium carbonate, clay, hydrogen peroxide, oxygen, paper size, salt, starch, sulphuric acid.

Tasman Mill: Bale wire, burnt lime, caustic soda, hydrogen peroxide, lime rock, magnesium sulphate, oxygen, salt, saltcake, sulphuric acid.

Penrose Mill: Starch. Packaging NZ: Starch, adhesives, plastic film, inks. Packaging AUS: Starch, adhesives, coatings, inks.5. Direct emissions from on-site stationary and

mobile (vehicular) combustion of fossil fuels.6. 2017 restated as geothermal steam energy and

consequently total energy consumption was overstated.

7. Includes CH4 and N2O emissions from combustion of biomass.

8. Biomass-derived CO2 is reported separately for information only, in accordance with the GHG Protocol.

9. Solid wastes are reported on a ‘dry solids’ basis; waste to landfill is deposited in facilities owned by Oji Fibre Solutions or licensed third parties.

10. Discharges listed for Tasman Mill include those from neighbouring newsprint mill owned and operated by Norske Skog Tasman due to shared effluent treatment infrastructure.

11. Volume estimated for Tasman Mill and excludes contributions from Norske Skog Tasman newsprint mill and stormwater.

12. Measurements made at point of discharge to trade waste system.

Market pulp tonnages are expressed on an ‘air dry’ or 90/10 basis, under which pulp weights are derived by normalisation to 90% dry pulp solids, 10% moisture content, which is standard for the industry.

Employee data

Health & safety data2015 2016 2017 2018

Serious injuries2 0 0 0 1

Lost-time injury rate3 1.03 0.73 1.09 0.82

Total Injury Rate4 2.14 1.85 2.64 1.74

Product safety incidents5 0 0 0 0

1: Total employees. Including permanent, causal and fixed term employees.

2: Serious Injuries. A serious injury is defined as any condition that results in a person being permanently disabled or requiring immediate in-patient hospitalisation.

3: Lost-time Injury Rate. Frequency rate of accidents resulting in lost work time = (Lost-time injuries/total work time) *200,000.

4: Total Injury Rate. Frequency rate of accidents resulting in injury = (Lost-time injuries + restricted work injuries + medically treated injuries/total work time) * 200,000.

5: Product Safety Incidents. A product safety incident occurs where a defective product (i) causes an injury to a person or material damage to property, (ii) leads to an end consumer recall because it could cause such injury or damage, or (iii) is the subject of a formal safety notification to the authorities.

2015 2016 2017 2018

Total employees1 1,696 1,687 1,831 1,846

BUSINESS UNIT

Pulp and Paper 780 828 870 859

Packaging Australia 241 228 306 316

Packaging New Zealand 520 522 530 545

Corporate 155 109 125 126

LOCATION OF EMPLOYEES

New Zealand 1,447 1,451 1,517 1,521

Australia 241 228 306 316

China, Hong Kong, Malaysia 8 8 8 9

AGE PROFILE

under 30 years old N/A 6.5% 10.4% 11.7%

30 to 50 years old N/A 44.0% 46.1% 44.5%

over 50 years old N/A 49.5% 43.5% 43.8%

GENDER

Female 17.0% 17.0% 17.0% 17.5%

Male 83.0% 83.0% 83.0% 82.5%

NEW STARTERS AND TURNOVER

New graduates & apprentices 14 26 23 22

Permanent new starters 136 169 257 231

Voluntary turnover 7.4% 7.8% 13.9% 12.4%

OJI FIBRE SOLUTIONS IS OWNED BY OJI HOLDINGS CORPORATION AND INCJ, LTD.

Oji Holdings is one of the largest companies in the global pulp, paper and packaging sector. Based in Japan, it has operations across the Asia-Pacific Region, Europe and the Americas, with more than 36,000 employees on a consolidated basis.

INCJ, Ltd. operates under the Japanese Industrial Competitiveness Enhancement Act and engages in ‘value up’ initiatives aimed at promoting innovation for the prosperity of future generations.

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Oji Fibre Solutions


1. The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard www.ghgprotocol.org/standards/corporate-standard

2. Global Reporting Initiative (GRI) Sustainability Reporting Standard www.globalreporting.org

About this report

This Sustainability Report is our fourth report as Oji Fibre Solutions and continues our previous environmental and sustainability performance reporting (since 2007) under different ownership.

SCOPE

This report covers the calendar year 2018. Environmental performance data is for the manufacturing operations of Oji Fibre Solutions. Manufacturing operations are defined as Kinleith Mill, Tasman Mill, Penrose Mill, Packaging Australia (AUS) and Packaging New Zealand (NZ). Environmental performance data is not presented for the service-focused sectors: Corporate Offices, Fullcircle and Lodestar.

People and safety data covers manufacturing operations and the service-focused sectors.

REPORTING STANDARDS

Greenhouse gas (GHG) emissions are reported according to the GHG Protocol1 published by the World Resources Institute and the World Business Council for Sustainable Development. We have referred to the Global Reporting Initiative (GRI) Sustainability Reporting Standard 20162 for guidance in the production of this report. This report references topic-specific disclosures from the GRI Sustainability Reporting Standard 2016.

DATA

Data is collected and presented in reference to the following topic-specific disclosures:

301-1 Materials used by weight or volume

302-1 Energy consumption within the organisation

303-1 Water withdrawal by source

305-1 Direct (Scope 1) GHG emissions

305-2 Energy indirect (Scope 2) GHG emissions

305-4 GHG emission intensity

306-1 Water discharge by quality and destination

306-2 Waste by type and disposal method

307-1 Non-compliance with environmental laws and regulations

401-1 New employee hires and turnover

405-1 Diversity of governance bodies and employees

As a result of shared wastewater treatment infrastructure, certain effluent data presented for the Tasman Mill includes those from the neighbouring newsprint operation owned and operated by Norske Skog Tasman. These are identified in the notes to the data tables.

RESTATEMENTS

2017 Geothermal steam energy and total energy consumption

2015-17 Waste to landfill


Oji Fibre Solutions

ojifs.com

CONTACTFor more information or feedback, please email: Jen Cook, Sustainability Manager [email protected] Fibre Solutions Private Bag 92004, Victoria Street West Auckland 1142, New Zealandlinkedin.com/company/oji-fibre-solutions

DISCLAIMERThis report has been compiled by Oji Fibre Solutions (NZ) Limited (‘Oji Fibre Solutions’) for general information purposes. Oji Fibre Solutions has taken care in compiling this report and believes the information it contains to be correct, but does not warrant the completeness or accuracy of the information or any opinion or statement contained in this report.

Documents

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