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TREND PACKAGING & OUTLOOK [email protected] Functional BARRIER FILMS in FLEXIBLE PACKAGING

Functional barrier films in flexible packaging industry

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Page 1: Functional barrier films in flexible packaging industry

TREND PACKAGING & OUTLOOK

[email protected]

Functional BARRIER FILMS in FLEXIBLE PACKAGING

Page 2: Functional barrier films in flexible packaging industry

Global Trends Packaging Requirements

Packaging and Processing

Page 3: Functional barrier films in flexible packaging industry
Page 4: Functional barrier films in flexible packaging industry

Source: Standard Chartered

Page 5: Functional barrier films in flexible packaging industry

The Middle Class Spending Journey

Middle class rise

Increase in available

consumer credit Small amount to

LARGE number

LOW income

Purchase BIG ticket :

Electronic,Furniture,

Auto

lifestyle

Choose where to shop or

entertained.

Farther home

Increase demand for

travel and leisure service

Greater emphasize for

entertainment and leisure Retirement

Healthcare

Child education

Increased demand

for financial

services

Page 7: Functional barrier films in flexible packaging industry

Years ahead : Indonesia retail growth 2nd best after china

Page 9: Functional barrier films in flexible packaging industry

Brand engagement to boost consumption

We - commerce

Page 10: Functional barrier films in flexible packaging industry

Easy to use packaging

Page 11: Functional barrier films in flexible packaging industry

The Business

Stuck on the -er words

• Bigger

• Brighter

• Better

• Stronger

• Faster

• Easier

• Newer

• Cheaper !

imagin

Page 12: Functional barrier films in flexible packaging industry

Co

pyr

igh

t ©

2013

Th

e N

iels

en C

om

pan

y. C

on

fid

enti

al a

nd

pro

pri

etar

y.

31

No differentiation means price

Page 13: Functional barrier films in flexible packaging industry

More Convenient

Anytime, anywhere

HOW YOU CREATE POSSIBLE

SURPRISE

THAT KIDS AND FAMILY LOVE …

Page 14: Functional barrier films in flexible packaging industry

Experience Economy

Lets move

Page 15: Functional barrier films in flexible packaging industry
Page 16: Functional barrier films in flexible packaging industry

The Magic Triangle of Packaging:

Customer

Packaging Material Packaging Machine

Packaging System

Functionality

compliance

Page 17: Functional barrier films in flexible packaging industry

Globalization Customer Delivered Value Networked Technology Product Life Cycle Compression Supply Chain Management Mass Customization Digital Business

Page 18: Functional barrier films in flexible packaging industry

Productvalue

Servicesvalue

Personnelvalue

Imagevalue

Total customer valueTCV

Monetarycost

Timecost

Energycost

Psychiccost

Total customer costTCC

Customer delivered valueCDV

CDV = TCV - TCC TCV = Bundle of benefits expected from product TCC = Bundle of costs expected to evaluate, obtain,

and use the product

Page 19: Functional barrier films in flexible packaging industry

Raw Material Suppliers

Converters (at full capacity/overcapacity)

Food/Pharma Manufacturers

Consumers

Converters are squeezed

Design Process

Packing Process

Distribution Process

Page 20: Functional barrier films in flexible packaging industry

HIGH-PERFORMANCE BARRIER FILMS: Examining Global Trends from Our Perspective

Page 21: Functional barrier films in flexible packaging industry

The global packaging market is huge; offering many opportunities in barrier packaging, led by flexibles.

N. America and Europe account for roughly 55% of global packaging value, but growing at slower rates than rapidly developing regions such as Asia

Global Packaging Market(value of shipments-all structures)

$450 Billion

Annual Growth2-3%

(>5% Asia)

Page 22: Functional barrier films in flexible packaging industry

High-performance barrier packaging films is specific, as follows.

Film structures providing high barrier levels to oxygen, water vapor,aromas/flavors, and/or UV light

– A barrier film is usually a coextruded, coated, or metallized substrate

– Barrier components include PVdC resin/coating, EVOH, nylon, MET films,or Al2O3 or SiOx

– But excludes all structures that use Al foil as the barrier, paper as astructural member, or MET films used only for graphic enhancement

Film structures <10 mil (e.g. multilayers of printed layer, barrier & sealant)

Includes film structure laminations (with a barrier film), or a coextrusioncontaining a layer of barrier resin, or a substrate coated with a barriermaterial that might also function as a sealant

A mono-structure of only barrier film is very rare; real value is created when the barrier film is a ‘component’ that enables the final package

Page 23: Functional barrier films in flexible packaging industry

The market for H.P. barrier packaging films is positively influenced by many factors.

Cost ReductionRigids to flexible; less R.M. & lower freight

Process ImprovementCoEx & laminatesoffset resin cost

High growth ofConvenience food

Home Ready - Ready to Cook

Smaller packagesMore barrier needed,

Higher surface-volume ratioAlternative Packaging

Smart, security, reclosability, etc.

Market forMarket forHigh PerformanceHigh PerformanceBarrier PackagingBarrier Packaging

FilmsFilms

Geo-Cultural & Trade

Impacts

Our focus is on food packaging, with some comments on medical devices

Page 24: Functional barrier films in flexible packaging industry

Business opportunity emanates from the value chain continuum of application, film and structure.

PackageStructure

Markets &Applications Barrier Film

Perishable Food-Fresh meat-Prepared food-Processedmeat & cheese

Dry Food-Confections &snack bars

-Pet food-Snacks &baked snacks

Medical & others

PVdCEVOHNylonMetallizedSpecialty oxidesCoEx. &laminates

BagsLid stockStand-uppouchesFormingwebWraps

Barrier Film

Package Structure

Markets & Applications

BusinessOpportunity

Barrier Film

Package Structure

Markets & Applications

BusinessOpportunity

US H.P. Barrier Film$1.2 BIL

We use sophisticated applications model to combine film & package conversion costs, area and package structure to determine various market size relationships

Page 25: Functional barrier films in flexible packaging industry

StructureFilm Markets

The overall barrier film market is forecast to grow at a good AAGR of 4.8% over the next five years.

0

1

2

3

4

5

6

7

Overallmarket, 4.8%

Aver

age

annu

al g

row

th, %

Perishable food Dry food

Freshmeat

Processedmeat

Cheeseand dairy

Preparedfood

TotalPerishable

Food($950 MIL)

Snackfood

Bakedsnacks

Drymixes

Confectionsand snack bars

Petfood

Coffee

TotalDry Food

($250 MIL)

Largest Share82% Perishables

Smallest3% of Perishables

Largest Share70% Dry Food

Coffee & Pet Small Share<5% of Dry Food

Page 26: Functional barrier films in flexible packaging industry

StructureFilm Markets

In perishable food, consumption of barrier films for fresh-meat applications is to grow AAGR of 5.6%.

Key Stats: Fresh Red Meat:•$720-740 MIL Film•5.6% Growth/yr•82% of Perishables•67% of Barrier Pkg

Examples:•Case-ready red meat focus•Pork & poultry alreadycase-ready & maturing

Penetration of case-ready meat to drive growth of barrier films

Trend toward the production of more case-ready red-meat products

Increase in the use of shrink bags for case-ready and value-added products

Refrigerated space allocated for fresh meat expected to decline, asconsumers demand convenience products; i.e. need increased O2 barrier &shelf life

Page 27: Functional barrier films in flexible packaging industry

StructureFilm Markets

Processed meat, cheese and dairy segments will exhibit more steady growth, at about 3-3.5%.

Key Stats: Proc. meats, cheese, dairy:•$100-110 MIL Film•3-3.5% Growth/yr•14% of Perishables•11% of Barrier Pkg

Examples:•Deli meat & cheese slices•Natural chunk cheese•Milk, pudding, yogurt

The image of processed meats (deli) as unhealthy is changing, with someproducts now viewed by consumers as convenient sources of protein

The use of barrier films to package cheese will continue to increase asconsumers’ preference for natural cheese continues to grow at the expense ofprocessed cheese that requires less barrier packaging

Consumer demand for smaller, more convenient packages will contribute to theincrease in barrier film consumption

Cost reduction will continue to drive the trend toward replacement oflaminations with coextrusion technology

Page 28: Functional barrier films in flexible packaging industry

StructureFilm Markets

In dry-foods, consumption of barrier films for dry-mixes is forecast strong AAGR of 4.2%.

Key Stats: Dry mixes:•$25-30 MIL Film•4.2% Growth/yr•12% of Dry Foods•2% of Barrier Pkg

Examples:•Cake mixes•Pudding powder•Powder flavoring

The dry food category is much smaller than perishables at about $250 MIL,or 20% of barrier film share

Dry mixes is a relatively small part of the dry food category, driven byconsumer preference for standup pouches and away from rigid packaging

To reduce investment risk, many companies are increasing the use ofcontract packagers as a means of converting to standup pouches

Trend toward clear packaging to view contents favors clear barrier filmsolutions

Page 29: Functional barrier films in flexible packaging industry

StructureFilm Markets

Snack-foods & baked-snacks to have respective modest growth, at AAGR of 2.3% & 2% each.

Key Stats: Snack food/baked-snacks:•$160-170 MIL Film•2-2.5% Growth/yr•79% of Dry Foods•16% of Barrier Pkg

Examples:•Chips, nuts, cookies, driedfruits, raisins, etc

•Baked (healthy snacks) –no preservatives

One of the biggest trends in snack foods is the move toward productspackaged in single servings that are easily portable and consumed on-the-go; we work 24/7, have a family and need convenience

The snack food category will continue to move away from rigidcontainers in favor of flexible packaging (SUP), with new introductions bymajor suppliers of snack nuts, cookies, and most recently, crackers

The use of barrier films in the baked-snack segment is expected toincrease overall, driven by consumer desire for healthier products thatrequire more protection from moisture and oxygen to retain freshness

Page 30: Functional barrier films in flexible packaging industry

StructureFilm Markets

High-growth expected in perishable foods for EVOH & Al2O3-PET films (8%+); in dry-foods PVdC-PET (9.2%).

0

1

2

3

4

5

6

7

8

9

10

Overallmarket, 4.8%

Aver

age

annu

al g

row

th, %

Perishable food Dry food

PVdC45%

EVOH25%

Nylon25%

PVdC-coated

PET

TotalPerishable Food

($950 MIL)

Al2O3-coated

PETMETnylon

SiOx-coated

PET

PVdC-coated

PP

PVdC-Coated PP

50%MET-PP

35%

MET-PET10%

PVdC-coatedPET

EVOH

TotalDry-Food

($250 MIL)

METPETFresh &

Processed Meats

Fresh Foods, Meats & Tray

Lidding

Fresh Foods, Meats &

Lam-Trays

Retort; Japan & Europe interest

Retort; Japan & Europe interest

High-growth, but small

market today

Snacks & Baked

Snacks & Baked

Displacing PVdC

SUP Clarity Applications

Page 31: Functional barrier films in flexible packaging industry

StructureFilm Markets

Primary converters of shrink bags for fresh & processed meat entrenched in PVdC CoEx-tech.

Although PVdC is inherently difficult to process, primary converters of shrink bags for packaging fresh and processed meat (Cryovac, Curwood,and Amcor) are entrenched in PVdC coextrusion technology for narrow web

Dow has introduced patented encapsulation technology to blow multilayerfilm and for producing wider width substrate. Licensing of this technology islikely to spur growth of PVdC resin for blown multilayer film

New growth markets for PVdC include lid stock and retort applications forprepared foods, which require moisture stability

Despite environmental issues, PVdC is still widely used for shrink bags inEurope, and its use in the U.S. does not appear to be a threatened

Page 32: Functional barrier films in flexible packaging industry

StructureFilm Markets

PVdC-coated PET, used as lid-stock & inner ply of clear standup pouches for is growing.

Increase in the use of PVdC-coated PET lid stock for packaging preparedfoods – MAP, hot-fill and retort

The use of PVdC-coated PET in packaging processed meats will decline

Lamination and coating processes are being displaced by coextrusions

However, PVdC-coated PET, commonly used as the inner ply of standuppouches for snack foods, dry mixes, and pet food, is expect to grow forapplications requiring clarity

Page 33: Functional barrier films in flexible packaging industry

BARRIER COATED FILMS

Barrier Coated Moisture Barrier Films on BOPP, on PET and on NYLON

are specially coated films to enhance Moisture Barrier and Oxygen

Barrier. There are able to reduce Moisture Barrier and Oxygen Barrier by

more than 50 % of uncoated plain films. It is also more cost effective than

PVDC and EVOH. The Barrier Coating materials is 100% Waterbased.

And this film totally environmentally friendly. It is proven to be more

cost effective, when compared to 3 or 4 layers laminating structures

without compromising the Moisture/Oxygen Barrier of the Packaging.

Most importantly these Films are able to reduce Carbon Footprint in

Flexible Packaging by minimum 10%.

Page 34: Functional barrier films in flexible packaging industry

MOISTURE / OXYGEN BARRIER OF VARIOUS FILMS &

COATINGS

* Total Film+ Coating Thickness 25µ gms/sqm gms/100 in² cc/sqm cc/100 in² EVOH* Dry 0.20 0.01

Moist (90%RH) 58.90 3.80 2.70 0.17 HB-PVDC* 0.78 0.05 1.20 0.08 PVDC (15µ BOPET) ∆ 14.00 0.90 6.00 0.40 HDPE 25µ ∆ 9.00 0.30 3,000.00 195.00 LDPE 25µ ∆ 18.00 1.20 8,000.00 519.00 CPP 25µ ∆ 12.00 0.80 4,200.00 272.00 BOPP 20µ ∆ 8.00 0.50 2,500.00 162.00 MYLAR™ BOPET 12µ ∆ 40.00 2.60 140.00 9.00 BOPA 15µ ∆ 250.00 16.20 90.00 5.80 K-BOPET 15µ 5.40 0.35 7.00 0.45 K-NYLON 17µ 4.00 0.25 6.00 0.40 EVAL™ EF-CR 15µ ∆ 142.00 9.20 1.50 0.10 EVAL™ EF-XL 15µ ∆ 29.00 1.90 1.00 0.06 BICOR™ 20MB666 7.00 0.45 1,000.00 65.00 BICOR™ 21MB866 (PVOH) 4.00 0.26 0.70 0.05 Barrier Coated-P20 (BOPP 20µ) 5.00 0.30 1,210.00 79.00 Barrier Coated-P18NS (BOPP 18µ) 6.00 0.40 8.00 0.50 Barrier Coated-P20NS (BOPP 20µ) 5.30 0.35 8.00 0.50 Barrier Coated-T12NS (BOPET 12µ) 14.00 0.90 4.60 0.30

MVTR (24 hrs/38°C/90%RH) OTR (24 hrs/23°C/1 ATM)FILMS

* Coated on BOPP 25µ Films

BarrierCoated Films Tested by Labthink Instruments Co., Ltd. On Perma W03/030 MVTR Unit (ASTM F1249) & Perma OX2-231 OTR Unit (ASTM

D1434) Source *: Current Technologies in Flexible Packaging- STP 912 by Michael L. Troedel

Source ∆: Dupont Teijin Film™ Specification Sheet.

BICOR™ is a product of ExxonMobile

EVAL™ is a product of Kuraray Co., Ltd.

MYLAR™ is a product of Dupont Teijin Film™

Page 35: Functional barrier films in flexible packaging industry

Polyamide provides

oxygen and aroma barrier

heat resistance

good mechanical properties

thermoformability

Polyethylene provides

high water barrier

sealability

multilayer film combines properties of multiple components

Multi-layer Film

2

Page 36: Functional barrier films in flexible packaging industry

5-layer PE/tie/PA/tie/PE

+ PA protected from humidity

7-layer PE/tie/PA/tie/PA/tie/PE

+ split PA - improved thermoformability

7-layer PE/tie/PA/EVOH/PA/tie/PE

+ very high barrier

+ good thermoformability

● 9-layer PE/PE/tie/PA/EVOH/PA/tie/PE1/PE2

+ sealing PE + antiblock/slip in PE1

+ reclosable in PE2

Coextrusion Film: Symmetric Structures

5

Page 37: Functional barrier films in flexible packaging industry

+ fast sealing due to heat-resistant PA skin layer

- curl

● 3-layer PE/tie/PA

● 5-layer PE1/PE2/PE2/tie/PA

+ sealing material, antiblock/slip in PE1

+ simple polyolefins in PE2

● 5-layer PE/tie/PA/tie/PA

+ split PA - improved thermoforming

● 5-layer PE/tie/PA/EVOH/PA

● 7-layer PE/tie/PA/EVOH/PA/tie/PA

● 9-layer PE/tie/PA/EVOH/PA/tie/PE/tie/PA

Coextrusion Film: Asymmetric Structures

6

Page 38: Functional barrier films in flexible packaging industry

Double/Triple bubble process

o Extrusion (downward/watercool)

o Blow-up

o Annealing

40-50% shrink

For :

o shrink bottom seal bags

o shrinkable lidding for rigid tray

o shrinkable bottom + lidding film

Shrink Bag / Shrink Film

10

Page 39: Functional barrier films in flexible packaging industry

StructureFilm Markets

Growth in case-ready MAP for fresh meat will translate into growth for multilayer EVOH film.

EVOH coextrusions in packaging processed meats and cheese willcontinue to displace more expensive PVdC-coated films

Trend toward clear EVOH/nylon structures as replacements for METPET in prepared foods and bag-in-box wines

EVOH to continue growing in laminated food trays

Page 40: Functional barrier films in flexible packaging industry

StructureFilm Markets

MET PP has all but replaced higher-priced MET PET in the snack foods category.

MET PP is the film of choice in packaging candy and snack bars (graphicsappeal)

Use of MET PET as the inner ply of standup pouches for snack foods, drymixes, and pet food will continue due to good dimensional stability and heatresistance are critical

The use of MET PET bags in foodservice applications, will continue to growwith the trend toward clear barrier films, replacing metal cans

Page 41: Functional barrier films in flexible packaging industry

StructureFilm Markets

Barrier packaging films for lid stock & standup pouchesin the food sectors forecast to grow at above rates.

Lid stock

-4

-2

0

2

4

6

8

10

Overallmarket, 4.8%

Aver

age

annu

al g

row

th, %

Perishable food Dry food

Lidstock

Bags

Standuppouches

Wraps Totalperishable

foodsegment

Bags Wraps Totaldry-foodsegment

Formingweb

Standuppouches

interestAbove average growth

Above average growth

Above average growth

Page 42: Functional barrier films in flexible packaging industry

StructureFilm Markets

Bags continue to be the major flexible barrier packaging structure, growing at average rates.

Bags are extensively used in packaging dry foods — most are pillow packs & bag-in-box type, supplied as rollstock to end users to run on form/fill/seal lines

Square-bottom bags, used to package coffee, becoming popular for other dryfood with improved graphics, reclosability & overall cost reduction vs. bag-in-box

Increases in oil prices will continue to fuel growth in 1 gal foodservice bags asreplacements for #10 metal cans

The use of barrier shrink bags for packaging case-ready & processed meatsgrowing at about 3-4%, led by convenience products - fresh meat & cooked

Page 43: Functional barrier films in flexible packaging industry

StructureFilm Markets

Standup pouches are being introduced into every category of dry-foods to differentiate products.

Standup pouches with zippers offer reclosability, improved barrier & materialsavings in a one-component flexible package vs. multi-component rigidcontainers they are replacing for packaging dry food

Rising fuel prices drive the trend toward metal can replacement with standuppouches; one truckload of flat bags/pouches equals 25 truckloads of cans

Sales of shelf-stable foods in retort pouches grown 20-30% in recent years,reaching $100 MIL in pouches. Many are foil laminates with clear barrier films

Standup pouches are also gaining popularity for packaging processed meatslike bacon bits and pre-cooked bacon.

Page 44: Functional barrier films in flexible packaging industry

Thermoforming

– forming (bottom) web

– lidding

Bags

– tubular bags

– side-seal bags

Pouches

– VFFS vertical form/fill/seal

– HFFS horizontal form/fill/seal

Shrink Bags / Film

Barrier Film Applications

7

Page 45: Functional barrier films in flexible packaging industry

9

PE/tie/PA 75-150µm Heavy bulk bags (unprinted)

CPA//PE 75-150µm Bulk bags

BOPA//PE 60-120µm Printed pouches

PE/tie/PA/tie/PE 60-100µm Pouches /face-to-back sealing

BOPET//PE/tie/PA/EVOH/PA/tie/PE

60-100µm

High-barrier pouches (printed)

BOPET//Alu//BOPA//PE

90-120µm

High-barrier pouches for

retort applications

Typical Bag/Pouch Film Structures

Page 46: Functional barrier films in flexible packaging industry

PE / tie / PA

CPA // PE

BOPA // PE

BOPET // (PE/tie/PA/EVOH/PA/tie/PE)

70-120µm

thickness of lidding film is determined as the residual wall thickness of formed web

Typical Structures of Lidding Film

8

Page 47: Functional barrier films in flexible packaging industry

Going forward, the outlook for high performance barrier packaging films is very positive.

Large and non-cyclical market

Sustainable growth drivers– Cost reduction– Convenience-oriented food– Smaller packages– Demand for alternate packaging formats

Page 48: Functional barrier films in flexible packaging industry

Product Name Existing Developing

Detergent Powder:Philippines,Indonesia.

PET (12µ)/Print/LLDPE (45µ)

OTR: 200gm/m²/24hrMVTR: 7.0gm/m²/24hr

• 2 Ply Laminate Structure

Barrier Coated-P35NS/Print/LTS2502,LTS2502H

OTR: 5.0gm/m²/24hrMVTR: 2.0gm/m²/24hr

• 1 Layer Structure

•Coated-P35NS : BOPP 35µ

Global Customer Move

Pattern Coat, 3 gsm for Sealing

Purpose: Reduce Plastics Consuming from 2 Layers to 1 Layer.

Page 49: Functional barrier films in flexible packaging industry

ProductName

Existing Developing

Snacks/Chips:Indonesia,

South Africa-NAMPAK Flexible

Packaging.

• PET/Print/MPET/LLDPEOTR: 1.20gm/m²/24hrMVTR: 0.90gm/m²/24hr

• PET/Print/PE/MPET/LLDPEOTR: 1.0gm/m²/24hrMVTR: 0.75gm/m²/24hr

Barrier Coated-P18NS/Print/VMCPP OTR: 0.15gm/m²/24hr MVTR: 0.80gm/m²/24hrorBarrier Coated-T12NS/Print/VMCPP OTR: 0.07gm/m²/24hr MVTR: 0.90gm/m²/24hr

• 2 Layers

•Coated-P18NS : BOPP 18µ•Coated-T12NS : BOPET 12µ

Global Customer MovePurpose: Reduce Plastics Consuming from 3-4 Layers to 2 Layers.

Page 50: Functional barrier films in flexible packaging industry

Product Name Existing Developing

Instant Noodle:Malaysia,Indonesia

Salad/Vegetables:Australia

BOPP/Print/PPOTR: 1100gm/m²/24hrMVTR: 5.0gm/m²/24hr

BOPP/Print/PEOTR: 1300gm/m²/24hrMVTR: 5.0gm/m²/24hr

PET/PRINT/LLDPEOTR: 200gm/m²/24hrMVTR: 7.0gm/m²/24hr

•2 Ply Laminate Structure

BARCO-P35NS/Print/LTS2502,LTS2502HOTR: 5.0gm/m²/24hrMVTR: 2.0gm/m²/24hr

• 1 Ply Laminate Structure

•BARCO-P35NS : BOPP 35µ

Global Customer Move

Pattern Coat, 3 g. for Sealing

Purpose: Reduce Plastics Consuming from 2 Layers to 1 Layer.

Page 51: Functional barrier films in flexible packaging industry

Cost Competitive StudyProductName

Existing Structures Laminating Structures using Barrier Coated Films

InstantCoffee:

Indonesia

A)PET/Print/Al/LLDPEOTR: 0.20gm/m²/24hrMVTR: 0.30gm/m²/24hrCost/100sqm: USD 42.00

B)PET/PRINT/VMPET/LLDPEOTR: 1.20gm/m²/24hrMVTR: 0.90gm/m²/24hrCost/100sqm: USD 37.00

C)PET/PRINT/VMPET/CPPOTR: 1.60gm/m²/24hrMVTR: 0.80gm/m²/24hrCost/100sqm: USD 26.50

•3-Ply laminate Structures

Barrier Coated-P18NS/Print/VMCPP OTR: 0.15gm/m²/24hr MVTR: 0.80gm/m²/24hrCost/100sqm: USD 26.50

• 2-Ply Laminate Structures.

• Coated-P18NS : BOPP 18µ

•58% lower cost with Coated 2-Ply > (A).•39% lower cost with Coated 2-Ply > (B).

Reduction of laminating structures from 3 Layers to 2 Layer.

Page 52: Functional barrier films in flexible packaging industry

In pharmaceuticals, flexible H.P. barrier packaging is insignificant; growth of unit-dose blister packs

The pharmaceutical segment is comprised of prescription drugs, medications, and dietarysupplements sold over-the-counter (OTC)World demand for pharma packaging to reach $24 BIL in 2009, increasing 4-5% annually.80% of demand from the US, Japan, China, Germany, France, UK, Italy, & Switzerland. The USwill remain the largest consumer driven by aging baby boomersBlister packaging is the fastest-growing segment of the pharma market. Worldwide demandexpected to grow 7% AAGR, reaching $5.6 BIL by 2009, driven by unit dose & sterile applicationsIt is estimated that less than 1% of all pharmaceuticals are packaged in barrier films, as definedby our definition and therefore not a significant consuming segment of barrier filmsHowever, future barrier may be needed to maintain drug potency or inhibit degradation. Amoisture barrier is critical for gels or liquids, sensitive to moisture loss. Foil used for UV barrierIn addition to unit-dose blister packs, companies are converting to flexible pouchesUnit doses maintain the ‘five rights’ of medicine monitoring: Right patient, right drug, right dose,right time, and right route of administration. Thus safer & tamper resistantNew delivery systems, nasal, transdermal and parenterals in home-care and self-care applicationsalso growing - not having to visit a doctor’s office cuts costs and saves timeKey trend is aging population - 75% of pharma consumers are senior citizens

– Healthy lifestyle & fitness craze has fuel popularity of vitamins and dietary supplements– The market for cosmeceuticals also experiencing rapid growth - aged refuse to look old– Opportunities exist for the growth of barrier films in alternative pharma delivery. The use of

Al2O3- and SiOx-coated films are expected to grow in niche applications

Page 53: Functional barrier films in flexible packaging industry

Packaging opportunities gleaned from other regions.

Drivers Western Europe China & Japan

ConsumerPreference

Traditional frequent trips to marketFew long lunches at home; grab-n-goHigher income – spend more at stores

Rapid lunches-aesthetics outweigh costsLocal shops provide flexible single serveRefrigerator limitations (small or none)

Low birth-rateMore singles & elderlyDisplaced families - move to coastal cities

Environmental directives affect plastics useSpace and waste reduction, recyclingEnergy from incinerationEye-catching aesthetics importantEnvironmental awarenessWant more efficient products, i.e. reducepackage size - easy to store/use

Packagers switch to new materialsLess concern on amortizing investmentsUsing new barrier films for perishable foodJapanese resin innovation, e.g. Mitsui

Demographics Smaller families – singles,working womenGrowth in aged and non-married womenSmall apartments, urban pop. densitySmaller package – growth of single-serve

Environment European Union packaging directiveSpace and waste reduction, recycling

PromotionMarketing

Package catches the consumer’s eyeBrand owner marketing influenceBrand owner environmental awarenessPerception that less is more; buy efficientproducts, e.g. dry detergent; smaller size

InnovationTechnology

New solutions – quick digital printing, e.g.– team logo on package, quick to shelf

Use of alternative substrates, e.g. barrierNew resin technology drives innovation

–- e.g. Topas COC, new metallocenes

Page 54: Functional barrier films in flexible packaging industry

Europe & Asia markets have similarities and yet differences vs. the US; but, flexibles are favored.

Europe– Improved package shelf-life; high-quality techno-product needs; new advances in

flexible aseptic dairy packaging - flexibles environment & disposal convenience– Bundle brand recognition and functionality with new flexible designs– Coffee in single portion flexibles to increase convenience; coffee in regular size flex

packs increase product quality, brand differentiation– Growth in frozen food flexible packaging market due to stronger brand development

and increased popularity of prepared foodsAsia

– Improved aesthetics via flexible constructions; improve recloseability and dispensingsystems, less freight for flexibles (China is key)

– Japan leads in different MAP balances for different products; create new asepticflexible packaging designs; unique combination of materials for new function

– Flexible structures to withstand pasteurization at 116 degrees C - crucial in thesterilization of low-acid foods like milk, meat and vegetables.

– Need shelf-life with no significant difference in taste, compared to glass– Compared to Japan, the rest of Asia is less advanced in packaging. Many rely on

innovations from Japan and West; advances from S. Korea, Singapore & Taiwan– Packaging materials in Japan, Singapore, Korea are influenced by disposability

recycling laws; incineration laws ban PVC; China’s new 5-year plan pro-environment

Page 55: Functional barrier films in flexible packaging industry

To summarize, opportunities are created when your solution meets the unmet needs of end users.

Adhesive &Ink

Producers

SpecialtyFilm

Producers

Resin Producers

Con

vert

ers

Increasing difficulty of communication

Packagers/Brand

Owners/Retailers

Packagers/Brand

Owners/Retailers

MaterialsSuppliers

Technologies:LaminationCoextrusionAdhesionPrintingConversion

Materials/ Resin

Influencers

Materials:PETEVOHNylonPolyolefins

Capturedvalue

Needs-based analysis is difficult

due to communication / business-related

industry barriers…

TechnologyInfluencers

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Protection and integrity Quality and safety Shelf-life Environmental respect Supply Chain handling and identification On-Shelf/ Off-Shelf needs

Image and appearance Aesthetic and appeal Brand awareness Visual Communication Display needs

Cost competitiveness Manufacturing and supply chain performance Machinability Specifications Modularity and flexibility

Emotion / satisfaction Consumer benefits Differentiation Information

Ergonomic Convenience Easiness and comfort

Any package is a Combination of three Core Requirements influenced by four main Factors

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Worldwide Regulatory Compliance

All information available required by the FDA guideline “Container Closure Systems for Packaging Human Drugs and Biologics”. All information available required by the EU guideline EMEA “Plastic Immediate Packaging Materials” (May 05). An up to date DMF type III is on file at the FDA and reviewed in conjunction with NDA’s on a regular basis All production facilities are ISO9001 certified All production facilities work under cGMP standards.

Goal: trouble free global submissions of new products in USA, Europe and Japan:

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Packaging Center New: camera inspection system operational

Position on the reel Type of defect, Size of defect,

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AFAP Product Safety System Description - Documents Product Safety Policy Statement

Product Safety Policy

Raw Material Approval

• Questionnaires for suppliers• Procedure

Product Development

•Questionnaire forcustomers •Documents of Compliancetemplates • Procedure (PSCS)

Documented Change Control

•Procedure and standard•Template for temporary deviation tocommercial spec

Product Safety Excellence Base (PSEB)

audit document

Product Safety Alert

• Procedure• Template

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• higher level of convenience & functionality

easy opening

dispensing systems

reclose options

valves

design

• product differentiation

Add-on features and design

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Proprietary & Confidential ©2014 Printpack, Inc. All rights reserved.

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100% Degradable applications

Stretch Wrap

Carrier Bags

Food Packing Trays

Garbage bags

Healthcare

Bubble Wrap

Label & tapes

Stretch Films

Cutlery and Cups

Slider Zip lock Bags

Flower wraps

Bread Bags

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Process Product

Material

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• Flavored carbonated soft drinks, such as colas,are micro-biologically stable, i.e. “not sensitive”

• Micro-organism can’t grow in the beverages,due to:• Very low pH• High CO2 level• No fruit juice content

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Definition

• Package is sterilized andbeverage is bottled in acold aseptic environment

• Milk, juice, tea, andisotonics are possiblecandidates for asepticfilling

5-Jul-12

103

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• Commercial sterility is “the absence ofmicroorganisms capable of reproduction inthe food under normal conditions of storage anddistribution”• not necessarily kill the germs, but make sure

they cannot multiply• Inhibit the process

• “Commercial sterility” and “sterility” are twodifferent concepts

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• Carbonation or sugar content• Preservatives• Hot Filling• Aseptic Filling• In bottle sterilization

• Pasteurization• Retort

• Selection of filling methods dependupon:• Product• Cost• Brand image• Shelf life expectation

57

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Technique Strength Weakness

Peroxyacetic Acid (PAA) Well established Cold Sterilant

Needs rinsing Strong Smell Wet Environment Long Treatment

Hydrogen Peroxide Well established for Peroxide residues high cartons temperature requirement

Ozonized Water Unknown Efficiency Level

UV Irradiation Simple, no residues Shadow Effect

Gamma Irradiation Well established in medical application

Expensive Batch Process

Heat (Steam, air) Used widely for machine sterilization

Not possible for heat sensitive plastics

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Aseptic Filling Line

Sources: Krones

24-Mar-14 110

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