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SUSTAINABILITY REPORT 2019

Delivering Solutions by Nature

We design and deliver packaging solutions to protect our customers’ products, so they arrive as intended.

Our market pulp is made from the long, high-density fibres of radiata pine.

Oji Fibre Solutions at a glance At Oji Fibre Solutions, we pride ourselves on our commitment to be a future focused company.

Being forward-looking also means our behaviour must be sustainable. This translates to our day-to-day activities: using our knowledge, our expertise, and our passion, we harness the strength of sustainably managed radiata pine plantations and recycled paper to deliver solutions by nature.

We are a business built on natural, renewable and low-carbon resources. Our 1,835 people and our contractors apply their skills and experience to produce quality kraft pulp, paper and fibre packaging products.

We are a values-based business, invested in the future and committed to doing good by both people and place.

Our values drive us forward on a sustainable path to create value for our people, the partners we work with, the customers we supply and the communities and environments in which we operate.

This sustainability report is built around the four key values that enable us to be a stable, successful business committed to delivering solutions by nature: innovation, built on strength, future focused and trusted partners.

Our products are used every day in households and businesses across New Zealand and Australia and in 30+ countries around the world. They include:

• cardboard boxes usedin supermarkets to keepproduce fresh

• paper bags or boxes forproduct deliveries

• products such as coffee filters,tissues, and nappies that containwood pulp

• cellulose fibre-reinforced cementboards used in buildings

• pine perfume bases usedin disinfectant

• chemicals used in water treatmentplants or swimming pools.

It is because of the products we make that the majority of Oji Fibre Solutions’ manufacturing operations have been considered essential during the response to the COVID-19 pandemic.

Welcome to our sustainability report

CONTENTS:

MARKET PULPWe produce kraft market pulps ideal for use in boards, tissues and specialty products.

CONTAINERBOARDWe produce kraft and recycled containerboards ideal for conversion into packaging products.

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

PAPER RECYCLINGFullcircle, our paper recovery service, collects waste paper from across New Zealand for transformation into new paper products at our mills.

LOGISTICSLodestar, our integrated logistics service, provides shipping and domestic transport solutions to deliver Oji Fibre Solutions’ and external customers’ products to global markets.

WE ARE A SPECIALIST IN:

Circular economy and 2019 value creation

01 Innovation by naturePage 6

02Stronger by nature Page 14

03Future focused by naturePage 24

04Partnership by nature Page 32

2019 results Page 44

1Sustainability Report 2019

Oji Fibre Solutions’ circular economy and value creation in 2019

2019 INPUTS: 2019 OUTPUTS:

559,903t of market pulp

376,490t of containerboard

211,023t of packaging products

34,531t of chemicals and by-products

53%diversion rate of wastes from landfill

0.279 tCO2-e/temission intensity

3packaging awards

Forest Wood chip Pulp Paper Corrugator Box Customer

Recovery boiler and evaporator

We start with wood residuals from sustainably managed forests.

We design and deliver packaging solutions to protect our customers’ products, so they arrive as intended.

341,911 GJ generated

9 manufacturing sites FSC® & PEFC™ Chain of Custody certified3

5+ million seedlings planted since 2007

1.64 total injury rate (6% reduction on 2018)

30+ number of markets in which we are operational

3,485,451tof virgin wood fibre (logs and chips)

228,400tof paper products that have been produced internally or purchased externally1

191,884tof recovered fibre

7,295tof purchased market pulp2

53,692Mllof water

78.8%renewable energy

73.4% from biomass

5.4% from geothermal steam

1,835employees

Recycling

Residuals of the digesting process are put to use as biofuel

We make pulp from radiata pine

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

2 All externally purchased market pulp is FSC® certified.3 Certified sites as at mid-2020.

OUTCOMES

Our values drive us 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.

Future Focused

Innovation

Trusted Partner

Built on Strength

Our most direct contribution to the United Nations Sustainable Development Goals is to:

2 3Oji Fibre Solutions Sustainability Report 2019

From our CEO

From our Chairman

Dr Jon Ryder Chief Executive Officer (CEO) Oji Fibre Solutions

Hiroyuki Isono Director and Chairman Oji Fibre Solutions

Director of the Board Oji Holdings Corporation

The groundwork laid over the last two years by Oji Fibre Solutions has put the company in a good position to manage the tightened international pulp and paper market in 2019, and the impacts of the global COVID-19 pandemic.

Over this period, more so than ever, our vertical integration is a core strength enabling the business to adapt and change in response to challenging external circumstances, while continuing to deliver for our customers. While there are many examples in this report of how we do this, I am particularly proud of the business’s response to the changing demands of the primary produce season. We strive to bring the skills and talents of our relationship managers and our integrated supply chain together to deliver on time, every time.

I am incredibly proud of the way in which my team of 1,835 employees has responded, dug deep and partnered with our customers to ensure continuity of supply.

In 2019, our stakeholders continued to be interested in the opportunities of the bio-circular economy to deliver renewable and recyclable alternatives to fossil fuel based products. We continue to work with customers to find solutions manufactured from renewable and sustainably sourced wood fibre.

As a further demonstration of our commitment to responsible sourcing, we extended PEFC™ and FSC® certification to all our mill operations in 2019 and over the course of 2020 will be certifying all our facilities.

As a solutions focused company, the business is always seeking new ways to strengthen its position as a supply partner to its customer base.

With the backing of Oji Holdings Corporation, the parent company of Oji Fibre Solutions, we have invested in the business to uplift capacity across the network of facilities within New Zealand and Australia.

In 2019, Oji Fibre Solutions announced plans to develop a $100+ million greenfield packaging facility in Christchurch. This new site will be the business’s South Island hub delivering improved product quality, transport efficiencies and safety and environmental benefits. Once completed in 2021, the business will be even better positioned to partner the South Island primary sector.

This development adds to the significant capital investments in the business over the last five years. These include the transformation of Tasman Mill completed in 2019, and investments to grow Oji Fibre Solutions' presence in the Australian' market through our two new packaging facilities of Cardboard Carton Solutions and the 5 Green Star rated facility at Yatala.

With the addition of the Yatala site, Oji Fibre Solutions is better able to service the Queensland primary sector. Recognising these opportunities, the business is continuing to invest in the facility and to recruit additional professional and production staff to the site.

These certifications provide a third party endorsement that the forests where our raw products come from and the supply chain to the customer is sustainably managed. As a result, our customers and in turn their consumers can take comfort from this additional layer of assurance.

In 2019, our ongoing focus on health and safety delivered good results. The Safety Case required under New Zealand legislation for Kinleith Mill was accepted with no conditions. Completing the transformation of Tasman Mill in the third quarter of 2019 reduced the amount of certain chemicals held on-site, resulting in the safety classification of the mill being significantly improved.

Transforming the Tasman Mill has also delivered environmental improvements. In 2019, we achieved a 20% reduction in greenhouse gas emission intensity at the mill compared to 2018 results. By eliminating coal and increasing the use of geothermal steam, 89% of the mill’s energy requirements are now met by renewable sources. Another benefit was achieving our pristine river clarity target mid-way through 2019, sixteen years ahead of the regulatory schedule.

Our values, integrated supply chain and dedicated teams across the business continue to provide strong foundations on which we can deliver solutions by nature and to face the future with optimism.

These investments are coupled with equally important but smaller scale investments to modernise packaging operations across the business and to deliver safety, environmental and efficiency improvements. We continue to look for further opportunities to serve the Australian and New Zealand markets.

In 2019, in conjunction with various in-mill improvements to reduce water use at Kinleith Mill, the business started the process of planning for and consulting with the community about a new waste water treatment plant at the mill.When completed the project will allow for wastewater from the mill to be treated to a standard that meets international best practice.

As part of Oji Holdings’ global network, Oji Fibre Solutions can leverage its scale to better manage today, while focusing on the future and investing for long-term success.

“ We are proud to be part of the bio-circular economy delivering solutions by nature.”

“ This year, Oji Fibre Solutions has taken several strides forward on its sustainability journey.”


01Innovation by natureInnovation is an important part of how we are delivering solutions by nature. We are natural problem solvers, and by thinking in new ways and striving to improve, we are building a more sustainable business.

We are always seeking to raise the standard of our products and services, and to ensure the success of our customers’ brands.

At Oji Fibre Solutions we are investing to be more efficient and to benefit our customers, our employees and the communities in which we are located.

Delivering a greenfields packaging facility in Christchurch.

6 7Sustainability Report 2019Oji Fibre Solutions

Investing in a sustainable future

Delivering a $100 million+ Greenfields Packaging Facility in Christchurch, New Zealand.As a solutions focused company, we are always looking at new ways we can support our customers as we strive to be more efficient and sustainable.

In November 2019, we announced our investment decision to purchase seven hectares in Christchurch for a purpose-built, corrugated-box plant.

When completed in 2021, this site will be the South Island hub for Oji Fibre Solutions’ operations and will include additional storage and loading facilities. It will produce sustainable packaging products for the South Island’s primary sector.

The site layout and buildings are being designed to provide for safer, more efficient operations and effective maintenance.

We invited original equipment manufacturers from around the globe to work with us to ensure we have the most modern and safe equipment available. The new machines will have finer product tolerances, deliver better print quality, and will be more efficient.

We have made decisions about the equipment from our current Christchurch facility that is appropriate to transfer to the new site. For example, this includes a flexo-folder gluer that will be fitted with the same state-of-the-art material handling equipment as the new machines.

We are confident that this investment will benefit our customers, our employees and the community.

Other ways we are investing in a sustainable futureInvestment in the new Christchurch packaging facility follows several large-scale investments in New Zealand and Australia over the last four years.

By investing in our sites and our processes we continue to improve our performance and to create shared value. Other recent investments include:

• $63m transformation of theTasman Mill, completed in 2019

• $70m new box plant in Yatala,Queensland, formally openedin 2018

• Purchase of Cardboard CartonSolutions speciality packagingplant in Melbourne in 2017

• $30m upgrade of the hygiene hallat the Paper Bag plant, Aucklandcompleted in 2016.

In 2019, we also commenced conversations with the local community about our proposed multi-million dollar upgrade to the Kinleith Mill wastewater treatment system.

“ The new Christchurch facility will replace the existing Shands Road operation with a purpose-built facility with state-of-the-art box-making equipment. By investing in the best available equipment, we will improve product quality and productivity, deliver environmental improvements and provide a safer operation than is possible in the current facility.”Grant Fitzgibbon Chief Operating Officer, Packaging

Numerous smaller-scale investments modernise our operations and drive our innovation potential, particularly at our packaging facilities. Notable technology investments in 2019 have included:

• a state-of-the-art rotarydie-cutter and new strappingline was installed at PackagingNorthern in Auckland, providingincreased safety, efficiency andproduct quality

• a new laminator was introducedat our Cardboard CartonSolutions facility in Melbourne.This new and modern machineis a good fit for our flatbed die-cutter. With better registrationand the ability to run at higherspeeds than previously, the resultis more efficient production withless waste

• a new steam boiler was installedat our Lansvale packaging facilityin Queensland. This more efficientand more sustainable boiler isdelivering energy, water, CO2-eand safety benefits

• a skywalk with prepress storagewas completed at the Yatalapackaging facility in Queensland,to provide for easy circulationand more efficient storage.

We are continuing to invest in our Yatala facility. In 2021, we will be enhancing it with a new rotary die-cutter and a flexo-folder gluer.

$63m transformation of the Tasman Mill, completed in 2019

$70m new box plant in Yatala, Queensland, formally opened in 2018

$30m hygiene hall upgraded at Paper Bag, Auckland, completed in 2016

1 The Fosber S-Line Corrugator is a 370m/min, 2.5m wide, double wall line with dual cut-off knives and fitted with the revolutionary Link M3 splicers

2 The work-in-progress and other conveyor lines are automated and fitted with full load-tracking systems

3 The Bahmüller Turbox BTX 1700 Specialty Gluer with PowerPacker is a 250m/min machine fitted with a MUK robotic load-building station

4 New hygiene hall at Oji Fibre Solutions' Paper Bag plant in Auckland

$100m+ new box plant in Christchurch to be opened in 2021

1 3

42

$100m+ new wastewater treatment plant at Kinleith Mill in 2021–2023

$20m new rotary die-cutter and flexo-folder gluer at Yatala in 2021


Overcoming complexity

Innovating to always deliver

Our award-winning retail-ready tray overcomes traditional complexity and weaknesses.

“ I am really thrilled for RJ's and my team that our innovative structural design has been recognised by PIDA and the WorldStar Packaging Awards.” Pete Cahill Creative Design and Innovation Manager

Being agile and innovative in our processes enables us to deliver when it counts.Oji Fibre Solutions is proud to be a trusted partner supplying packaging to many of the fruit packhouses in New Zealand and Australia.

At the height of the fruit-picking season, our customers rely on us to work alongside them, changing direction when needed to deliver on time, every time. All links in the chain — growers, packhouses, packaging providers and brand owners — work together to supply the freshest produce in prime condition.

The packhouses operate at speed and at scale. During the 16-week kiwifruit season in New Zealand — from early March to late May — larger facilities pack around 3,200 trays of kiwifruit per hour. The season is complex, and customer needs can change daily as crops ripen and the weather changes.

Our strengths support our customers though the busy season: paper production, packaging manufacture and supply, on-site tray making and quality service.

At some of the larger packhouses we deliver die-cut blanks to save space and employ local tray making contractors to erect trays on-site. In these cases, an Oji Fibre Solutions’ local manager is also on-site maintaining the mobile erecting machines, training our contractors to assemble the trays safely and effectively, and integrating our team seamlessly into the packhouse’s health and safety protocols.

“ As NZ’s largest packer of organic kiwifruit, sustainable packaging is very important to us. Heading into the season we were impressed with Oji Fibre Solutions’ ability to offer a truly local packaging solution. We have found Oji Fibre Solutions to be a thoroughly reliable supplier through a very challenging season and have enjoyed their customer focus and can-do attitude.”Mark Gardiner Managing Director, Whitehall Fruitpackers

RJ’s Liquorice approached Oji Fibre Solutions seeking to overcome a key challenge of retail-ready packaging: how to deliver structural reliability and simple assembly while ensuring shoppers have maximum access to the product when it is presented in-store.

The box we designed for RJ’s Liquorice has an open top and open front, and is designed to handle confectionary exported from New Zealand to the United Kingdom. The added advantage of the design is its ability to be loaded onto pallets to be delivered straight into supermarkets for display.

Many product boxes are designed with double-strength corners that are difficult to put together because the outer flaps are folded up and over the inner flaps. Oji Fibre Solutions’ technical innovation team overcame this challenge by creating a jigsaw shape on the edges of the inner flaps; they also altered the folding sequence to make the box easier to assemble. This design innovation also made adding the stacking lugs straightforward.

For retailers, preparing the display is easy. They simply take the pallet into store and once the stretch wrap is removed no further set up is required.

In store, multiple layers of the product can be displayed at once. Shoppers can access the product through the open front and top of the box.

Our team’s unique design approach was awarded a bronze medal in the food category of the 2019 Australasian Packaging and Design Awards (PIDA).

PIDA recognition propelled our design to a truly international level, securing its entry to the WorldStar Packaging Awards, the pre-eminent international award in packaging.

In 2020, the RJ’s retail-ready tray was announced as a winner in the food category.

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

In early 2020 we took this a step further, with our design team having some fun developing tables for the Zespri Momentum conference.

Photo: Apoorv Mehrotra, of Oji Fibre Solutions with Dr Carol Kilcullen-Lawrence, the former National President of the Australian Institute of Packaging, at the PIDA Awards


How seeking a locally sourced and 100% natural solution reinforces the circular economy.

WOOP is a meal-delivery company that supplies semi-prepared meal-kits to homes across New Zealand. The company focuses on locally sourced and 100% natural ingredients for health-conscious, ethical Kiwi's.

When WOOP reviewed its packaging, it looked for a sustainable outer-packaging solution.

WOOP’s requirement for design excellence The customer’s key criteria were to protect and keep WOOP’s fresh produce chilled, to be 100% recyclable, and to have great visual appeal.

Our design engineers worked with WOOP to understand the design requirements and finalised the containerboard grades to be used in the box construction. The linerboard provided by Oji Fibre Solutions is natural and made in New Zealand.

In this design we use a combination of the HIGOLD™ kraft linerboard we manufacture at our Kinleith Mill and the ECOFLEX™ recycled medium we manufacture at our Penrose Mill. The box includes 47% recycled material — a fact that is proudly displayed on the box.

We collaborated with WOOP on field trials to fine-tune the design and to craft a box that hits the high notes for structural integrity, aesthetic appeal, costs and sustainability.

“ The team at Oji Fibre Solutions were solution focused and able to deliver a design that not only met the technical requirements but provided a uniquely WOOP design.”William Lockie General Manager, Operations & Food Evangelist, WOOP

100% New Zealand made

47% recycled material

100% recyclable domestically

100% natural and locally sourced

A successful design solutionJust six weeks after our initial conversation with WOOP, our customer had the confidence in our design to sign it off. The first orders were delivered in August 2019 and since then Oji Fibre Solutions has become the sole box supplier for WOOP.

The final box is easy to form, and is cut from one sheet of containerboard with friction tabs on the side walls to ensure the box locks together well. It has been designed with finger holes allowing final users to easily flatten the box for disposal.

Our relationship now extends to Fullcircle collecting end-of-life boxes from WOOP to be recycled at our Penrose Mill.

Together we are contributing to New Zealand’s circular economy.

Design features• 100% New Zealand made

• made from 47% recycled material

• great visual appeal

• recyclable domestically

• aligns with WOOP’s philosophy.


02Stronger by nature

9 manufacturing sites are FSC® and PEFC™ Chain of Custody certified.

Continuing to build on our strong foundations is vital in ensuring we can continue to deliver solutions by nature. It’s about adding to the strength and sustainability of every part of our business, from source and product to process and people.

By extending our FSC® and PEFC™ certification we can now offer our pulp, paper and packaging customers the benefits of independently certified product.


Commitment to sustainable fibre

Extending Chain of Custody (CoC) certification to all our manufacturing sites.Our commitment to sustainability means we are dedicated to using only sustainable wood fibre to make our products.

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 independently certified to international standards. We appreciate this certification provides our customers, and in turn their consumers confidence that the raw wood fibre inputs in their products come from well-managed, legally harvested and sustainable forests.

Kinleith and Tasman Mills have been Forest Stewardship Council FSC® CoC certified for more than ten

years and Programme for the Endorsement of Forest Certification PEFC™ CoC certified for four years.

Since making the decision in early 2019 to extend certification from these mills to our other sites, nine of our manufacturing facilities are now PEFC™ and FSC® CoC certified.

December 2019 saw Oji Fibre Solutions successfully expand PEFC™ and FSC® multi-site CoC certification from the Kinleith and Tasman Mills to include the Penrose Mill, and on downstream to our Yatala, Lansvale and Noble Park packaging facilities in Australia. Our New Zealand packaging sites of Northern, Central and Southern have been quickly added to our multi-site certification.

These manufacturing facilities have been audited for compliance to PEFC™ and FSC® standards. To ensure the process ran smoothly, in preparation for the audit each site was trained on how the certification

systems function and collaborative planning and implementation sessions were held with site managers, warehouse managers, planners, customer services and IT teams.

We are proud of the collaboration by our teams from across the business to extend our certification across all manufacturing sites and offer our customers the option to purchase certified products.

Our goal is to certify our four specialty packaging facilities in the second half of 2020. At that point all our manufacturing sites will be CoC certified.

By extending COC certification to our packaging facilities, from mid-2020 we will be in a position to sell certified packaging products, as well as the certified pulp and paper products we have been selling for many years.

What is Chain of Custody certification?This certification is voluntary and authenticates that a wood fibre product has been manufactured in a manner that supports a broad range of positive social, environmental and economic outcomes.

Chain of custody refers to the verification and tracking processes which guarantee that a fibre product and its components have maintained PEFC™ and FSC® certification standards at each stage, or each ‘chain-link’, of the journey from forest to end-consumer.

In this way, certification provides for the fibre to be tracked from the point of harvest through to the finished product delivered to our customers.

“ Achieving PEFC and FSC Chain of Custody certification across our manufacturing sites enables us to provide our customers with enhanced product assurances and to further support their own sustainability values.” Philip Millichamp Group Manager, Environment & External Relations 1 Adapted from the WBCSD 2019 Forest Sector

SGD Roadmap.

SUSTAINABLE FOREST

RESOURCES

Mill Wood chip, recovered paper,

pulp, paper products

Plant Corrugated containers,

speciality boards

Sales, management and logistics

Customers, distribution, consumers

Independently certified products

Waste paper

CE

R

T IF I CATI ON

FM

CE

R

T IF I CATI ON

CoC

CE

R

T IF I CATI ON

CoC

The Programme for the Endorsement of Forest Certification (PEFC™) and the Forest Stewardship Council (FSC®) are recognised and respected around the world in the traceability and promotion of responsible forest management. These standards are independently audited.

For more information visit: PEFC.org and ic.FSC.org/en

The Benefits of CoC Certification1

Social Environmental Economic• Safeguarding the social

values of forests

• Improving working conditions,health and safety requirementsfor workers

• Providing jobs, capacitybuilding and training

• Community engagementand well-being.

• Contributing to improvedmanagement of theworld’s forests

• Preservation of ecosystemservices

• Contribution to waterstewardship, clean air andcarbon sequestration.

• Access to a growing marketfor certified products

• Third-party/independentverification of managementpractices and product origin

• Risk management through supplychain transparency from forestto the product.

CE

R

T IF I CATI ON

CoC

17Sustainability Report 201916 Oji Fibre Solutions

Raw timber products

Sawmill residue

Processed timber products

Wood chip

By-products and chemicals

Pulp Woody biomass fuel

Timber products

CASCADING USE OF FOREST RESOURCES

Small

diam

eter wood Round logs for tim

ber

SUSTAINABLY MANAGED FOREST

A

B

D

E

F

C

C

Adding value to sustainable fibre

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

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

Our fibre procurement strategy is focused on pulp logs and chips that would otherwise have limited value. These wood supplies consist of residuals from other parts of the forest industry including lower-value industrial logs, toplogs not suitable for use by a sawmill and chips sourced from sawmills.

We also use the lower quality residuals from sawmilling, forestry activities and our own chipping and debarking operations, which are not suitable for pulp, as biomass fuel.

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

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

• illegally

• in violation of traditional and human rights

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

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

• from forests in which genetically modified trees are planted.

The FSC® approved Centralised National Risk Assessment for New Zealand evaluates the risk of sourcing wood fibre from unacceptable sources as low risk across the above five categories. Nevertheless, we obtain as much wood as is practicable from PEFCTM and/or FSC® certified forests, with the balance meeting certification input requirements for mixed or controlled sources.

The role of virgin fibreProducing an effective paper package relies on a determination of the amount of recycled and virgin fibre that is needed for optimal structural integrity.

The different characteristics of paper are achieved in a number of ways, including by varying the amount and type of recycled paper used.

For example, demand for paper products for packaging dairy, horticulture, meat and other food products is weighted towards higher virgin fibre and lower recycled content paper to withstand cool store environments.

Typically, the fibres that make up what we know as ‘paper’ can be recycled five to eight times. Eventually they deteriorate to a point where they can no longer be recycled, at which point many of the fibres are ‘biodegraded’ though waste systems into carbon dioxide and water.

The addition of virgin fibre to the total volume of paper products in circulation at any one time maintains the quality of the products being manufactured and the quality of the paper making and recycling processes overall.

A

B

C

D

E

F

BARK Used for bio-energy

SAWLOG 1 Used for timber products, building furniture

SLABWOOD Used for pulp

SAWLOG 2 Used for timber products, building furniture

TOPLOG 1 Used for pulp and timber products

TOPLOG 2 Used for pulp

19Sustainability Report 201918 Oji Fibre Solutions

2019 WHERE WE WORK 2019 OUR AGE PROFILE

46%

44%

17%

31%

8%

43%

11.0%


46%

44%

17%

31%

8%

43%

11.0%

Helping our people reach their potential.Our 1,835 people are integral to our productivity and ongoing ability to meet our customers’ needs on time, every time.

Our employees are hard-working, skilled and passionate about what they do. Our commitment is to continue to support their professional development and well-being, and to ensure they work in a safe and healthy environment.

Through our in-house learning management system, myOjiFS, we provide our employees with job relevant learning opportunities and enable effective scheduling, delivery and refreshing of instruction and training in an engaging learning environment. Our aim for myOjiFS is to support our people to systematically work through their assigned learning modules at a time that works for them. Employees can select additional material of interest to them.

Initially focused on health and safety, operational effectiveness and required compliance, we have extended the myOjiFS content to include several professional development and leadership modules. There are also dedicated areas within the system to support communities of practice among our professionals.

We also support our employees with face-to-face training when that is required, such as for practical skills acquisition and initial qualification completion.

Our employees• 21 new graduates and apprentices

• 203 permanent new starters

• 4.6% voluntary turnover

• 17.5% of employees are female

• 25% of managers are female

• 40% of employees are salaried

• 60% of employees are waged.

Supporting the well-being of our employeesOji Fibre Solutions supports employees to be the best they can be, 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.

Through our well-being programme “Flourish” we help our people to be ready and fit for work. Flourish’s on-line resources and team challenges provide strategies, tools and support to enhance mental and physical well-being. In 2019, a total of 1,520 challenges were completed by our people, which is an increase of 80% on the number completed in 2018. We also make Flourish available to our employees’ immediate family.

A confidential and independent counselling service is available for any employee to access in person, on-line or by phone. Tools and advice to support well-being is also available through this service, as is career, personal legal and financial advice.

2019: OUR AGE PROFILE2019: WHERE WE WORK

Upskilling to grow our strong and resilient workforce

21 new graduates and apprentices

25% of managers are female

60% of employees are waged

2019 ENERGY CONSUMPTION USING RENEWABLE ENERGY TO MITIGATE GHG EMISSION pg23

73.4%

15.8%

5.4%5.4%

Packaging Australia


73.4%

15.8%

5.4%5.4%

Over 50 years old

Pulp and Paper


46%

44%

17%

31%

8%

43%

11.0%

30 to 50 years old


46%

44%

17%

31%

8%

43%

11.0%


73.4%

15.8%

5.4%5.4%Packaging

New Zealand


73.4%

15.8%

5.4%5.4%Under 30

years old


73.4%

15.8%

5.4%5.4%

Corporate

Countries we work in

New Zealand 1,514 people

Australia 313 people

China, Hong Kong, Malaysia 8 people


Focus on health & safety

Our health and safety aim is simple: to send everyone safely home every day.To help achieve this aim, we are constantly looking at how we can improve our health and safety systems and processes. One notable achievement in 2019 was the introduction of an updated safety management system for the company, which drew on the good foundations it had in place, and has enhanced this to reflect the specific environment we operate in and current legislative and best practice expectations.

In recent years we have had a particular focus on process safety. We are proud to have made changes at the Tasman Mill to reduce the amounts of certain potentially hazardous chemicals held on-site, with the result that the mill is no longer classified as an Upper Tier, Major Hazard Facility1. This is official recognition from WorkSafe under the relevant regulations that the mill has been made safer by these changes.

We were also very pleased that the Safety Case for our Kinleith Mill was accepted by WorkSafe NZ in 2019 with no conditions. A Safety Case is a requirement for Upper Tier Major Hazard Facilities and is essentially the written demonstration of our safety management systems. For Kinleith Mill, the approved Safety Case represents real investments in safety training, process

improvements, maintenance, operations and emergency planning. WorkSafe’s acceptance means they are satisfied with the progress we have made and that we can operate a Major Hazard Facility safely.

Since the Safety Case was approved, we have launched a dedicated website to provide the communities at and surrounding Kinleith Mill with up to date information on any issues that impact public health and safety. Through this website we can quickly get messages out to the emergency response services and the wider community.

We also sought in 2019 to roll out some of the lessons from the process safety improvements at our mills to our other manufacturing sites. This is an example of the ongoing collaboration amongst health and safety professionals to share knowledge and learnings across our business units.

Underpinning the work we have done on systems and processes are our people. All our people have an important role in managing risks and workplace health and safety. Their strong and positive culture is supported by five simple mantras.

Our quality and safety systems are applied across all aspects of our manufacturing, from sourcing raw materials to manufacture to product delivery.

1 Major Hazard Facilities are defined by New Zealand Health and Safety legislation

2 A product safety incident occurs where a defective product causes an injury to a person or material damage to property; leads to an end-consumer recall because it could cause such injury or damage; or is the subject of a formal safety notification to the authorities.

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

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

TARGET

Zero product safety incidents2

This year we have achieved our target of zero product incidents.

TARGET

50% reduction in Lost-time Injury Rate (LTIR)3 and 50% reduction in Total Injury Rate (TIR)4 from 2017 levels before the end of 2020In 2019, our key indicators of LTIR and TIR improved again. These results compare very favourably with sector averages.

TARGET

Zero serious injuriesUnfortunately one of our team members experienced a serious injury to their hand while at work this year. Additional preventative measures have been implemented to manage the manual handling risk that resulted in the injury. Following a period of recuperation the injured person has returned to full-time work.

Update for 2020: Keeping essential workers safe during Covid-19

The business moved quickly to put in place additional health and safety measures to help us to protect our workers and to reduce the risk of the spread of Covid-19. Site protocols during this time included physical distancing, increased cleaning, health screening and contact-tracing measures. As part of our well-being programme, we provided advice and guidance to people on stress management and reminded them of the counselling services available during this uncertain time.

TIR & LTIR RESULTS

TIR & LTIR Results

02015 2018 2019

0.5

1.0

1.5

2.0

2.5

3.0

Targeting 50% reduction Total Injury Rate from 2017 levels by 2020 YE

Targeting 50% reduction Lost-Time Rate from 2017 levels by 2020 YE

Take 5 tostay alive

Make thesafe waythe right

way

Safetystarts

and endswith me

Don’t walkpast a

problem

Think safe;act saferGood health and

safety performanceis simply part

of what we do.

Key health and safety indicators


03Future focused by natureIn a changing world, we remain focused on what will sustain our future. Adapting to change, progressing towards our goals and acting responsibly means we can deliver solutions by nature long into the future.

We look towards the future, and welcome change. Sustainability is core to our operations.

Fullcircle recovers used papers from across New Zealand.

Oji Fibre Solutions operates at scale to recover and recycle paper. We are using our knowledge and experience to help our customers and the community achieve greater circularity, renewability and a sustainable future.


Generating new value

How we are generating new value from recovered and recycled fibre.Oji Fibre Solutions is the only business in New Zealand operating at scale to recover used paper and cardboard to recycle it into new packaging products.

Our paper recovery service, Fullcircle, is a key link in the integrated solutions we offer customers.

Fullcircle closes the loop in our circular economy by working closely with communities and businesses across New Zealand to recover reusable paper, cardboard and containerboards. Once collected the recovered material is baled at one of our 14 baling plants prior to being transported to our Kinleith and Penrose paper mills to be recycled.

In the cities of Dunedin and Wellington, Fullcircle operates Materials Recovery Facilities, where we sort household recyclables such as cardboard, glass and plastics. We recycle the recovered paper and cardboard and work with other recyclers to close the loop for non-fibre recyclables.

In 2019, Fullcircle collected 267,140 tonnes of recovered paper and cardboard. 191,884 tonnes was remanufactured into paper products at our Penrose and Kinleith mills and a small amount was used by other local manufacturers. In total, 72% of the fibre collected by Fullcircle was recycled within New Zealand.

The recovered paper reprocessed at our Penrose Mill is used to produce 100% recycled paper. The majority of this is then used by our packaging plants in New Zealand and Australia as the middle (fluted) layer in corrugated board.

In 2019, work commenced to extend the FSC® and PEFC™ Chain of Custody (CoC) certifications held by Oji Fibre Solutions to include Penrose Mill. The mill is now CoC certified for recycled fibre and is selling 100% recycled FSC® certified paper to a variety of customers in New Zealand and overseas.

Kinleith Mill also reprocesses recovered paper, including clippings from our packaging sites and cardboard recovered by Fullcircle. This is regularly used as an input to various paper grades manufactured at the mill.

By closing the used paper resource loop we are well placed to support our paper and packaging customers’ requests for quality products made from renewable resources with optimised recycled content and to deliver an end-of-life recycling solution.

We are also proud to underpin the country’s ability to sustainably manage used paper and cardboard by turning these resources into new products.

Changes in the recycling marketing continued to challenge in 2019 Used paper and cardboard that could not be recycled domestically by Oji Fibre Solutions or other local recyclers has traditionally been exported to be recycled internationally.

Prior to 2018, China was the largest importer and recycler of household and other recovered materials. China’s concern at the volume of waste generated from cross-contaminated recyclables has resulted in tighter quality specifications being applied to these materials. Other countries have been quick to follow China’s example, accepting only those recyclables with low rates of contamination.

191,884t of recovered fibre remanufactured by our mills

Similarly, the New Zealand and Australia Governments have introduced initiatives to promote recycling and find solutions for recyclable material collected in excess of domestic recycling capacity.

Oji Fibre Solutions is supportive of tighter international controls on limiting the cross-contamination of recyclables as the logical move from a linear — take, make, waste — economy to a circular one.

We know there are many opportunities to promote circularity, and respond to stakeholder interest about the sustainability of products.

The emergence of a circular bio-economy

The dual concept of the circular bio-economy brings together the principles of efficiency and closed loop usage of resources to achieve circularity, whereby bio-industries can provide consumers with products made from natural, renewable resources.

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

In addition, trees absorb carbon dioxide (CO2) from the atmosphere as they grow and together with wood based products store carbon. After harvest, CO2 continues to be stored in the wood products, including paper.

In practice, the circular bio-economy is about driving the move from fossil-based materials towards renewable alternatives and more sustainable consumption.

Oji Fibre Solutions is proud to harness the strength of natural, renewable resources and to recycle these throughout our value chain.

The growing concern around some types of waste is an opportunity to promote the benefits of the bio-circular economy and paper-based products.

Fullcircle has been assisting the Ministry for the Environment’s (MfE's) National Resource Recovery Project since 2018 with policy and practical discussion about ways in which New Zealand can improve resource recovery rates. For example, MfE’s investigation of a country-wide container return scheme is also an opportunity to promote separation of recyclables at source to reduce contamination.

Our four decades of knowledge and experience in recovering, recycling and manufacturing of paper packaging, is being applied to help the community and our customers advance their renewability, circularity and sustainability goals.

267,140t of recovered fibre collected by Fullcircle

14 recovered paper baling sites nationwide in New Zealand

2 Materials Recovery Facilities in Wellington and Dunedin

“ Consumers’ awareness of sustainability has really helped highlight the benefits of paper.”Matthew Hitchings Manager, Fullcircle


Targeting zero

Our aim is to achieve zero environmental burden.Inspired by the aspiration of our parent company, Oji Holdings’, to act in harmony with nature and society to achieve zero environmental burden, four years ago we adopted three environmental targets to provide direction on our journey to become a more sustainable business.

TARGET

Zero non-compliance with environmental laws and regulations1 Each year we strive to achieve zero non-compliance with New Zealand and Australian environmental laws. Oji Fibre Solutions holds more than 40 environmental consents for our milling and packaging operations covering conditions such as water withdrawal and discharge, air quality and environmental monitoring.

In 2019, four incidents failed our strict compliance criteria. All related to limit violations and were quickly rectified. There were no warnings or sanctions from regulatory authorities and no environmental impacts.

TARGET

30% (dry basis) reduction in waste to landfill from 2015 levels before the end of 20202 Oji Fibre Solutions continues to be an important part of New Zealand’s recycling industry, collecting around one half of the country’s waste paper and reprocessing about one third into new products. We also play a big part in using wastes from the forestry industry.

In 2019, 53% of the waste generated by our manufacturing sites was diverted away from landfill. The amount sent to landfill remains above our plan.

The increase in waste to landfill during 2019 was a result of operational challenges at our largest pulp and paper facilities in New Zealand. However, there were improvements in managing waste at many of the smaller sites across our business, including:

How do our kraft mills produce energy?

The kraft pulp process separates lignin, the material that binds the fibres, from the wood and produces black liquor as a by-product. This is used as biofuel in the production process and is supplemented by wood wastes, such as bark. The Tasman Mill also draws geothermal steam from a local bore owned and operated by Ngāti Tūwharetoa Geothermal Assets.

• A 21% decrease on 2018 results in waste to landfill from our packaging sites in Australia due to an improved source separation system at most sites and working with an industrial composting facility to take wastewater sludge from our Yatala site

• A 27% reduction on 2018 results in waste to landfill from our Christchurch site due to the 2018 conversion of the coal-fired boiler to a cleaner burning option.

TARGET

6% reduction in GHG emission intensity from 2015 levels before the end of 20203 Close to 75% of total energy consumption in 2019 was from renewable sources. Most of this was from biomass at our pulp mills.

Greenhouse gas intensity across the business has continued to decrease since 2017 tracking towards our target. In 2019 emission intensity was 0.279tCO2-e4 per tonne of product (down almost 2.8% compared to 2018). Projects contributing to 2019 reductions include:

• The 2018 coal boiler conversion at our Christchurch site, where emissions decreased by 493tCO2e (18%) compared to 2018

• The boiler conversion from diesel to gas at our Yatala site in mid-2019

• A more efficient gas boiler installed at our Noble Park site

• A 12% decrease in emissions at our Lansvale site, partly driven by converting factory lighting from fluorescent lights to LED lights

• Transitioning hoists from LPG to electricity across the Packaging New Zealand network of facilities.

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

2 Waste to landfill targets exclude new sites of Yatala and Cardboard Carton Solutions facilities. In 2019, combined these sites recorded 61 tonnes of waste to landfill and achieved 98% waste diversion rate.

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.

4 Carbon dioxide equivalent emissions.

“ Transforming Tasman Mill has improved environmental outcomes and decreased greenhouse gas emissions. We are very pleased to have driven down emissions from the mill by 8,300tCO2-e in 2019.”Terry Skiffington Chief Operating Officer, Pulp and Paper

Waste Streams (tonnes) pg 23

19,448

26,900

41,165

21,075

30,225

40,175

19,925

29,317

40,776

24,149

33,173

44,700

22,982

30,190

46,566

0

40,000

80,000

120,000

2015 2016 2017 2018 2019

Waste to landfill

WASTE STREAMS2

To compost


19,448

26,900

41,165

21,075

30,225

40,175

19,925

29,317

40,776

24,149

33,173

44,700

22,982

30,190

46,566

0

40,000

80,000

120,000

2015 2016 2017 2018 2019


19,448

26,900

41,165

21,075

30,225

40,175

19,925

29,317

40,776

24,149

33,173

44,700

22,982

30,190

46,566

0

40,000

80,000

120,000

2015 2016 2017 2018 2019

To recycle


19,448

26,900

41,165

21,075

30,225

40,175

19,925

29,317

40,776

24,149

33,173

44,700

22,982

30,190

46,566

0

40,000

80,000

120,000

2015 2016 2017 2018 2019

GHG INTENSITY 2015–2019

GHG INTENSITY 2015 – 2019 TCO2-E/T TOTAL PRODUCTION pg 23

0.270

0.2870.291

0.2870.279

0.254

0.202015 2016 2017 2018 2019 TARGET 2020

0.21

0.22

0.23

0.24

0.25

0.26

0.27

0.28

0.29

0.30


73.4%

15.8%

5.4%5.4%

2019 ENERGY CONSUMPTIONUsing renewable energy to mitigate GHG emissions


73.4%

15.8%

5.4%5.4%

Fossil fuels: natural gas, waste fuel oil, fuel oil, coal, diesel

Biomass: kraft black liquor, wood residues


73.4%

15.8%

5.4%5.4%2019 ENERGY CONSUMPTION USING RENEWABLE

ENERGY TO MITIGATE GHG EMISSION pg23

73.4%

15.8%

5.4%5.4%


73.4%

15.8%

5.4%5.4%

Electricity Geothermal steam

The three-year, $63 million project to transform the Tasman Mill was mostly completed by mid-2019 and resulted in emissions reducing by more than 8,300tCO2-e between 2018 and 2019. During the same period emissions intensity at Tasman Mill improved from 0.272t to 0.219tCO2-e (almost 20%).

We transformed the Tasman Mill by refocusing the pulp product mix and substantially changing the mill’s energy systems. See our case study about how we did this at climateleaderscoalition.org.nz

~20% emission intensity improvement at Tasman Mill

53% of wastes diverted from landfill

78.8% renewable energy

341,910 GJ of power generated

tCO

2-e/

t to

tal p

rod

ucti

on

tonn

es


Managing the water we use

Upgrading the water treatment plant at Kinleith Mill

The plan to commission a state-of-the-art wastewater treatment plant continues at Kinleith Mill and we are on track to replace the relevant resource consents for the mill. When completed the project will allow us to treat wastewater to a standard that meets international best practice.

This project is being driven by our parent company, Oji Holdings, as part of their aspiration to reduce the environmental burden of their operations across the globe.

We have already begun to make improvements within the mill to

accommodate the new treatment plant by reducing loads and water use. Once the resource consents are granted, we plan to begin the design and construction phase of a new high-tech activated sludge system and tertiary treatment plant at a site to the south of the mill.

We continued to talk to the local community and Tangata Whenua about the project, including discussions about options for rehabilitating the old treatment infrastructure, and we hope this engagement carries on into the future.

Our operations have a responsibility to use, treat and monitor water in accordance with environmental consents, trade waste permits and local regulations.All major processes in our mills use and reuse water — from log debarking, chip washing to pulp washing and screening and in the paper machines. Water is also used to generate steam for process heat and on-site power generation.

In addition to water being used when we make pulp and paper, our packaging plants also use it when we make corrugated board and packaging. Water is used in several processes, including to make steam to heat the corrugator rollers, to make the starch that bonds the layers of containerboard together, and as a component in the printing process.

Our two largest sites, Kinleith and Tasman Mills, operate primary and secondary water treatment systems before discharging into local rivers. At Kinleith this is solely managed by Oji Fibre Solutions. At Tasman this is co-managed with the neighbouring operation, Norske Skog Tasman.

The discharge of treated process water by these mills is governed by strict resource consent requirements by the Waikato and Bay of Plenty Regional Councils. Monitoring reports are regularly provided to the councils for compliance with a range of parameters. These reports are also made available to Tangata Whenua, the mills’ community consultation groups and to the general public via the councils or on request.

TARGET

Water colour reduction target achieved Oji Fibre Solutions co-manages the wastewater treatment plant at Tasman Mill with the neighbouring operation Norske Skog Mill.

The regulated target for colour of the water discharged from the treatment plant is less than 10 tonnes per day (Pt-Co Equivalent)

by 2035; the point at which it is considered to be inconspicuous.

This target was achieved in mid-2019, sixteen years ahead of schedule. Oji Fibre Solutions has made several improvements in recent years to contribute to this but the most significant has been the bleach plant closure, part of the $63 million Mill transformation project, which was mostly completed in mid-2019.

In 2019, we announced our plans to futureproof the mill’s wastewater management and treatment systems.

Precipitation

Evapo-transpiration

Surfa

ce water run-o� and ground water recharge

Other water inputs

Water in products

FORESTS

MANUFACTURING

Surface waterGround waterMunicipal water

Water in wood

Products

Non-fibreraw material

Waste

water

trea

tmen

t

Proce

ss w

aste

wat

er

Stea

m

WATER CYCLE

2019 WATER SOURCEALL MANUFACTURING OPERATIONS

77%

22%

1%

2019: WATER SOURCE All manufacturing operations


73.4%

15.8%

5.4%5.4%

Ground water Surface water


73.4%

15.8%

5.4%5.4%


73.4%

15.8%

5.4%5.4%Municipal supply

PROGRESS OF TASMAN MILL POND COLOURPERFORMANCE VS CONSENT

TARGET 20342010 2018 2019 20220

5

10

15

20

25

30

35

TASMAN MILL COLOUR DISCHARGE CONSENTTarget achieved 16 years ahead of schedule

Out colour performance


19,448

26,900

41,165

21,075

30,225

40,175

19,925

29,317

40,776

24,149

33,173

44,700

22,982

30,190

46,566

0

40,000

80,000

120,000

2015 2016 2017 2018 2019

Consent colour limits


19,448

26,900

41,165

21,075

30,225

40,175

19,925

29,317

40,776

24,149

33,173

44,700

22,982

30,190

46,566

0

40,000

80,000

120,000

2015 2016 2017 2018 2019

Av.

30

-day

mov

ing

po

nd o

ut c

olo

ur (

T/D

)

THE WATER CYCLE


04Partnership by natureTrue partnership brings opportunity, drives growth, and most importantly, ensures strength and stability. By building on the trust we have earned and working together with our partners, our people and our communities, we are able to deliver better solutions by nature.

At Oji Fibre Solutions we strive to develop strong and mutually beneficial relationships with our customers, the communities in which we are located and our suppliers.

12 local community initiatives provided long-term support.


We act as a trusted partner in our communities.We are proud of being purposeful and consistent in our community relationships. By doing so we work alongside our charity partners to promote shared knowledge, understanding and provide certainty of support.

We are also proud to engage in our local communities by doing what we do best; providing cardboard packaging solutions with great presentation to selected grass-roots initiatives.

School Savvy CQAfter opening our state-of-the-art distribution centre in Bundaberg, Queensland in 2019 we got behind the local community by supporting School Savvy CQ, an annual back to school resources initiative aimed at children and families who need financial assistance. School Savvy CQ collect

Engaging in our communities

OUR COMMUNITY INVESTMENTS IN 20191

RemarkITIn 2019, we entered a new partnership with RemarkIT Solutions and the Digital Wings programme to repurpose our ‘end-of-life’ IT equipment. This is now being reused or recycled, with much of the viable equipment donated to charities and community groups across New Zealand. In 2019, Digital Wings supported 129 new charities and diverted 155 tonnes of potential e-waste to reuse.

Fill a boxThis initiative aims to spread kindness and to help alleviate stress during the Christmas season. Each year the Levin community rallies around families in need though this local project by donating items to fill a box. The boxes are then delivered to families the week before Christmas, which is usually a surprise to the family receiving them. As a large employer in the local area, Oji Fibre Solutions is proud to have lent our support to this initiative, to help those in need, by providing our A4 file boxes to those coordinating the collection.

Graeme Dingle FoundationOji Fibre Solutions is a proud supporter of the Graeme Dingle Foundation’s Kiwi Can and Stars programmes in Tokoroa, the community in which our Kinleith Mill is based. In 2019, we supported 1,436 local young people aged 5-18 to build their resilience, confidence and belief in their own potential — setting them up with a platform to launch from when they leave school.

Duffy Books in Homes

Duffy Books in Homes’ vision is to inspire a love of books in children, so they become adults who inspire a love of reading. They do this by creating and enhancing the desire of children to read through book ownership. We sponsor the programme in four schools close to our mills in the central North Island of New Zealand: David Henry School, Tainui Full Primary School and Strathmore School in Tokoroa and Kawerau South School in Kawerau. Though our sponsorship, the children at these schools received more than 1,250 new books of their choice in 2019.

“ Collection bins donated by Oji Fibre Solutions were very professional and highly visible. This kind donation enabled School Savvy to help 555 children in Bundaberg and 519 children in the Rockhampton region.”Maija Stewart Coordinator, Business Development, CentraCare CQ

pre-loved uniform and basic stationery supplies for redistribution, but they needed a sustainable collection solution to place around the region. We were happy to lend our core skills and expertise to the wider community by providing collection boxes.

1 Children from Tokoroa involved in the Graeme Dingle Foundation

2 Anna from Centacare CQ with Colleen from Capricorn Educational Resources

1 Excludes commercial sponsorships.

1

2

TOTAL $234,000

EN

VIR

ON

ME

NT

44%

ED

UC

AT

ION

41%

WE

LLB

EIN

G 7%

SPO

RT

5%

CO

MM

UN

ITY

3%

$80,000 contributed to the Graeme Dingle Foundation

$234,000provided to community initiatives


Our memberships include:

Australian Forest Products Association (AFPA)

Australian Packaging Covenant Organisation (APCO)

Bioenergy Association

Business Leaders’ Health & Safety Forum (ZeroHarm)

Business New Zealand

Climate Leaders Coalition

Employers and Manufactures Association (EMA)

Forest Owners Association

Gen Less

Major Electricity Users Group

Packaging NZ

Paper Forum New Zealand

SEDEX (Supplier Ethical Data Exchange)

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

Supplier Code of Conduct

Taking the pulse of our partners

Ensuring those we work with uphold the same values and standards.At Oji Fibre Solutions, we recognise our good reputation depends on our relationships with our suppliers, as well as managing the impacts of our supply chain. As a significant player in the fibre industry, we can use our purchasing power to improve economic, social and governance outcomes, and encourage suppliers to continuously improve.

A step forward in working together toward sustainable business.At Oji Fibre Solutions we believe that working collaboratively with a wide cross-section of stakeholders is the best way to share knowledge and experience, to raise awareness about the challenges and potential of the industry, and to accelerate our sustainable journey.

In late 2019, we commenced consultation with stakeholders from across our value chain about the issues that matter most to them and which Oji Fibre Solutions has an impact on.

This confirmed the importance of supply chain security, fibre sourcing and recycling and the approach we take to manage our environmental and social impacts.

This materiality assessment provided rich insights, and coupled with our experience in early 2020 of operating as an essential service during the COVID-19 pandemic, is helping to shape our sustainability agenda for 2021 and beyond.

At the end of 2019, we launched our Supplier Code of Conduct, which is included in our contracts with suppliers. It formalises our expectation that our suppliers uphold our values and standards of operation and share our drive for sustainable outcomes.

In the Code, we state the minimum obligations we expect our suppliers to meet in doing business with us. Suppliers must:

• Comply with all applicable laws

• Undertake ethical business practices

• Avoid the procurement of wood from unacceptable sources

• Protect human rights and labour standards

“ We have long held the expectation that our suppliers be ethical and environmentally and socially responsible, and so it’s a really positive step to record this in our Supplier Code of Conduct to confirm our commitment to a sustainable supply chain.”Simon Codling General Counsel

• Prioritise workplace health and safety and provide secure, safe and healthy work sites

• Manage their business in an environmentally responsible manner

• Commit to open communication and positive relationships with the local communities in which they operate.

The Supplier Code of Conduct is an integral part of our procurement and contracting process and is being implemented in contracts with all new suppliers. A staged approach is being taken to rolling out the Code to existing suppliers.

The full Supplier Code of Conduct is available on our website.


Meet the Oji Fibre Solutions’ Leadership Team

Our ownership

Leadership team, left to right:Simon Codling, General Counsel; Karl Klinge, Chief Financial Officer; Grant Wilcock, Vice President Paper Sales & Marketing; Dr Jon Ryder, Chief Executive Officer; Grant Fitzgibbon, Chief Operating Officer — Packaging; Hiroyuki Isono, Director and Chairman; Mike Meiring, Vice President Pulp Sales & Marketing; Terry Skiffington, Chief Operating Officer — Pulp & Paper; Shunsuke Okubo, General Manager — Group Management Coordination Office

At Oji Fibre Solutions our leadership team has deep experience of the pulp, paper and packaging industry gained within the company, across Australasia and further afield. We believe in developing, nurturing and bringing talent through the business’s many operating units.

Oji Fibre Solutions is a strong, integrated fibre solutions business that benefits from Oji Holdings Corporation and INCJ, Ltd ownership.

Oji Holdings Corporation 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

Our governance and ownership

Our certifications and standards

We and our partners benefit from the continuity of leadership delivered by this philosophy. We also have the benefit of being part of Oji Holdings Group and accessing the skills and experience of a wider network of employees seconded to business to learn and develop.

promoting innovation for the prosperity of future generations.

Beyond the Boundaries expresses Oji Holdings’ commitment to actively go beyond the ‘boundaries’ of business domains, countries, and the respective capabilities of individuals with the aim of positively contributing to society, the world and the future.

Demonstrating our commitment to conduct business ethically and legally and in compliance with recognised industry standards.

Food SafetyISO 22000:2018-certified Food Safety Management System at Packaging New Zealand's Northern, Central, Southern and Paper Bag manufacturing sites:

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

EnvironmentalForest Stewardship Council® Chain of Custody (CoC) certification for pulp at both the Kinleith and Tasman Mills, for paper at Kinleith Mill and Penrose Mill, and for packaging at six packaging manufacturing sites: Northern, Central, Southern, Yatala, Lansvale and Noble Park.

Programme for the Endorsement of Forest Certification Chain of Custody (COC) certification for pulp at both Kinleith and Tasman Mills, for paper at Kinleith Mill and Penrose Mill, and for packaging at six packaging manufacturing sites: Northern, Central, Southern, Yatala, Lansvale and Noble Park.

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

Health & SafetyAS/NZS 4801:2001 Occupational Health and Safety Management System at Packaging Australia Lansvale, Noble Park and Yatala packaging manufacturing sites.

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

QualityISO 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 our New Zealand packaging sites and in Australia as follows:

• Lansvale, Noble Park and Yatala manufacturing sites

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


Market PulpWe 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.

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, liquid packaging board, filter papers and tissue products.

is a wood pulp used in the production of high-quality fibre cement-based building boards. It has been developed by Oji Fibre Solutions and is manufactured solely at Tasman Mill on a dedicated pulp line and dryer.

Tasman Paper Grade Unbleached Kraft Pulp (UKP) This 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.

Our products

Our services

ContainerboardWe produce kraft and recycled fibre-based containerboards in a wide range of weights. These are ideal for conversion into high-quality packaging products.

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

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

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

is a fully recycled medium made at Penrose Mill for use in standard packaging environments.

is a range of kraft-top liners made at Kinleith Mill, which blends virgin wood fibre on the surface for colour and consistency and recovered fibre as the balance material.

PackagingOji Fibre Solutions packaging business is one of Australasia’s largest fibre-based manufacturers. We specialise in converting quality containerboards into fit-for-purpose packaging solutions that meet our customers individual needs.

Cardboard Packaging At our six corrugating facilities throughout New Zealand and Australia we manufacture a comprehensive selection of cardboard products for the use in a wide range of industries including horticulture, dairy, meat, seafood and industrial manufacturing.

Paper Bag At our Auckland paper bag facility, we specialise in complex multi-ply bags where product integrity and efficient distribution are critical, supported by high-quality graphics and options of traceability through QR coding. Our product range includes bags for dairy, cement, flour and sugar industries, from 5kg sizes through to 50kg industrial bags.

Specialty Boards and Cardboard Carton Solutions At these two dedicated facilities we manufacture custom-made corrugated and solid fibre packaging, including heavy-duty packaging, frozen and chilled products packaging, point-of-sale displays, solid fibre slip-sheets and bulk bins.

Paper Cups We manufacture paper cups for a wide range of beverage and other products that benefit from being presented in well-designed packaging.

FullcircleFullcircle 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.

Fullcircle uses purpose-built vehicles to service our customers. The most common vehicles are front-loading and rear-loading trucks. These safely lift wheelie bins and large metal cages carry paper, cardboard, film and other recyclables. The range of equipment options can be seen at ojifs.com/fullcircle

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

LogisticsLodestar 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 joint venture Bearing360 Ltd, 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.

• We sell our products to 30+ countries

• Approx. 70,000 containers (teu) managed across multiple shipping lines

• 3 open hatch bulk charters operated, of 38,000 DWT each

• 3.4m tonnes of export cargo under management within New Zealand: rail, road and coastal

• 46,000sqm storage facility at the Port of Tauranga for paper and forest products, giving strategic access to export terminals and container yards.

“ We are continuing to broaden our product portfolio for specialty UKP and are currently focused on the development of a premium electrical grade.”Mike Meiring Vice President, Pulp Sales & Marketing


U N I T E D S T A T E S

B R A Z I L

GERMANY

LITHUANIA

BELGIUM

FIJI

NIGERIA

PAKISTAN

SRI LANKA

BANGLADESH

CAMBODIA

VIETNAM

SAUDIARABIA

INDIA

ICELAND

NETHERLANDS

SOUTH AFRICA

COLOMBIA

CHILE

ARGENTINA

URUGUAY

PHILIPPINES

INDONESIA

JAPAN

THAILAND

SINGAPORE

SOUTH KOREA

TAIWANUNITEDARAB EMIRATES

Jinan

Kuala Lumpur

FoodservicePackaging

Lansvale

Yatala

Hong Kong

PenroseNorthern

Paper Bag

Tasman

Kinleith

Central

Specialty Boards

Southern

Noble Park

Cardboard Carton Solutions

C H I N A

MALAYSIA

A U S T R A L I AN E W

Z E A L A N D

Mill

Corrugated Box Facility

Other Converting Facility

Sales O�ce

Operating Markets

KEY

Our global reach

We are proud to have a strong base in regional New Zealand and Australia and to make our products available internationally. The fibre strength and consistent quality of our pulp, paper and packaging products are sought after by customers across the globe.

2 kraft pulp mills: Kinleith and Tasman

30+ markets internationally

1 kraft paper machine: Kinleith

14 recovered fibre baling sites in New Zealand

1 recycled paper machine: Penrose

60+ moveable box-erecting machines

3 sales offices in Hong Kong, Jinan and Kuala Lumpur

25 distribution centres

10 converting plants throughout Australia and New Zealand


2019 results

Production dataOji Fibre

Solutions 2017

Oji Fibre Solutions

20181

Oji Fibre Solutions

2019

Kinleith Mill

2019

Tasman Mill

2019

Penrose Mill

2019

Packaging NZ

2019

Packaging Aus1 2019

Units

PRODUCTION OUTPUTS2

Market pulp and containerboard products tonne 928,664 905,715 936,393 547,743 303,563 85,087 0 0

Fibre-based packaging products tonne 187,543 214,285 211,023 0 0 0 134,668 76,355

Chemicals and by-products3 tonne 35,786 33,944 34,531 19,118 15,413 0 0 0

Total outputs2 tonne 1,151,993 1,153,944 1,181,947 566,861 318,976 85,087 134,668 76,355

RAW MATERIALS INPUTS

Fibre inputs

Virgin wood (logs and chips) tonne 3,563,251 3,499,356 3,485,451 2,152,649 1,332,802 0 0 0

Market pulp tonne 8,058 7,455 7,295 7,295 0 0 0 0

Recovered fibre tonne 205,605 190,298 191,884 90,447 0 101,437 0 0

Paper, containerboard, wrapping, cores tonne 204,205 215,505 228,400 12,091 0 230 132,539 83,540

Total fibre tonne 3,981,119 3,912,614 3,913,030 2,262,482 1,332,802 101,667 132,539 83,540

Other significant inputs (approximate)4 tonne 114,609 97,091 111,452 64,336 36,091 742 8,744 1,539

Environmental dataENERGY CONSUMPTION

Direct sources

Biomass: kraft black liquor, wood residues GJ 21,088,935 20,333,015 20,345,672 13,677,981 6,667,691 0 0 0

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

GJ 4,646,002 4,390,835 4,389,752 2,975,636 786,183 459,765 92,822 75,346

Indirect sources (purchased)

Electricity GJ 1,587,752 1,628,989 1,488,943 1,039,354 226,008 147,404 45,964 30,213

Steam GJ 0 0 0 0 0 0 0 0

Geothermal steam GJ 1,734,418 1,730,799 1,508,031 0 1,508,031 0 0 0

Total energy consumption GJ 29,057,106 28,083,638 27,732,398 17,692,971 9,187,913 607,169 138,786 105,559

Electricity generation (fuels included above) GJ 358,429 314,616 341,911 250,891 91,020 0 0 0

WATER WITHDRAWAL

Municipal supply Ml 344 354 434 0 42 327 33 32

Surface water Ml 41,995 40,171 41,627 20,691 20,936 0 0 0

Ground water Ml 11,764 12,194 11,631 11,155 0 476 0 0

Total withdrawal Ml 54,103 52,719 53,692 31,846 20,978 803 33 32

EMISSIONS TO AIR

Scope 1 (direct) emissions (CO2-e)5,6 tonne 279,308 267,971 264,206 177,998 51,745 24,932 5,475 4,056

Scope 2 (indirect) emissions (CO2-e) tonne 56,123 63,630 65,938 33,945 18,269 4,814 1,501 7,409

Total Scope 1 and 2 emissions (CO2-e)5,6 tonne 335,431 331,601 330,145 211,943 70,014 29,747 6,976 11,465

Biomass CO2 emissions7 tonne 1,884,677 1,834,460 1,831,689 1,213,337 618,352 0 0 0

WASTE8

To landfill (approximate) dry tonne 40,175 40,776 46,628 25,076 10,387 9,545 1,357 263

To recycle dry tonne 29,317 33,173 30,190 372 148 0 18,931 10,739

To compost/vermicompost dry tonne 19,925 24,149 22,982 16,196 6,763 0 0 23

Hazardous waste (incl. EPA, Victoria) tonne 195 178 61 6 1 0 0 54

DISCHARGE TO WATER9,10

Volume Ml 57,323 54,786 64,560 30,101 34,154 305 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)11 tonne 1,383 718 319 N/A N/A

Biochemical Oxygen Demand (BOD)11 tonne 575 528 882 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. Includes CH4 and N2O emissions from combustion of biomass.

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

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

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

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

11. 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.

12. All employees. Including permanent, causal and fixed-term employees.

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

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

15. 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.

16. 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-of-consumer recall because it could cause such injury or damage, or (iii) is the subject of a formal safety notification to the authorities.

Employee dataOji Fibre

Solutions 2017

Oji Fibre Solutions

2018

Oji Fibre Solutions

2019

Total employees12 1,831 1,846 1,835

BUSINESS UNIT

Pulp and Paper 870 859 816

Packaging Australia 306 316 313

Packaging New Zealand 530 545 565

Corporate 125 126 141

LOCATION OF EMPLOYEES

New Zealand 1,517 1,521 1,514

Australia 306 316 313

China, Hong Kong, Malaysia 8 9 8

AGE PROFILE

Under 30 years old 10.4% 11.7% 10.9%

30 to 50 years old 46.1% 44.5% 46.2%

Over 50 years old 43.5% 43.8% 42.9%

GENDER

Female 17.0% 17.5% 17.5%

Male 83.0% 82.5% 82.5%

NEW STARTERS AND TURNOVER

New graduates & apprentices 23 22 21

Permanent new starters 257 231 203

Voluntary turnover 13.9% 12.4% 4.6%

Health, safety & wellness dataSerious injuries13 0 1 1

Lost-time injury rate14 1.09 0.82 0.78

Total injury rate15 2.64 1.74 1.64

Product safety incidents16 0 0 0


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

2. Global Reporting initiative (GRI) Sustainability Reporting Standard globalreporting.org and <IR> principles integratedreporting.org

This Sustainability Report is our fifth report as Oji Fibre Solutions and continues previous environmental and sustainability reporting, since 2007, under different ownership.

ScopeData in this report is for the 2019 calendar year.

Environmental performance data is for the manufacturing sites of Oji Fibre Solutions, defined as Kinleith Mill, Tasman Mill, Penrose Mill, Packaging Australia and Packaging New Zealand. Environmental performance data is not presented for the service-focused corporate offices, Fullcircle and Lodestar operations.

People and health and safety data is for all manufacturing sites and the service-focused operations.

Reporting standardsGreenhouse gas (GHG) emission are reported according to the GHG Protocol published by the World Resources institute and the World Business Council for Sustainable Development. We have referred to Integrated Reporting <IR> guiding principles and the Global Reporting Initiative (GRI) Sustainability Reporting Standard for guidance in the production of this report.

DataThis report references topic-specific disclosures from the GRI Sustainability Reporting Standard 2016:

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

306-2 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 Tasman Mill includes those from the neighbouring operation owned and operated by Norske Skog Tasman. These are identified in the notes to the data tables.

About this report

46 Oji Fibre Solutions

CONTACTAt Oji Fibre Solutions we welcome your input.For more information or to provide 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.

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