1

Heat Treated PalletsILC Dover Supply Chain

Main Discussion Points:

1. Effective June 10, 2013 all pallets used for the storage and transport of Pharm raw material and components must be housed on a clean heat treated pallet that are stamped ISPM 15 - HT

2. All Pharm out-bound shipments will continue to be housed on heat treated pallets as they currently are today

3. Pharm raw materials and components will have a dedicated storage area in building 2 & 3

4. Heat Treated Pallets used for the storage of Pharm raw material and components cannot be placed next to or against non-heat treated pallets

5. Heat treated pallets must be clean

6. All shipments destined for a country other than the USA must be housed on heat treated pallet.

2

Why and What is this all about?Why are these new processes being put into place?

Many of ILC customers require a very strict standard of cleanliness due to the nature of the critical work they perform. In order for us to gain their trust and business we must comply with these requests.

What are ISPM 15 hear treated pallets and how do they function compared to a regular pallet?

ISPM – International Standard for Phytosanitary Measures # 15 is a measure developed by the IPPC – International Plant Protection Convention – that directly addresses the need to treat wood material of a thickness greater than 6mm used to ship material and product between countries. Its main purpose is to prevent the international transport and spread of disease and insects that could negatively infect plants, trees or the ecosystems.

ISPM Heat Treated pallets are heated until its core temperature reaches 133 degrees for at least 30 minutes. This procedure can only be conducted by a certified company.

After the wood is effectively heated a special seal call a “wheat stamp” is placed on the pallet.

3

Continued

There is a secondary method to treat pallets to prevent the spread of insects and disease. This secondary method is through a fumigation process. In this process the pallet is saturated with a chemical called “Methyl Bromide”. After fumigation, a similar “wheat seal” is placed on the pallet – however this seal is slightly different.

IMPORTANT: Methyl Bromide treated pallets are never to be used in the ILC supply chain. They may omit an odor to can potentially contaminate our products.

ILC Dover will only allow the use of “Heat Treated Pallets in its Supply Chain

4

Wheat Seals1. IPPC official seal = Left Box 2. Country where certified and certification facility number =

Top Right Box 3. Treatment type Lower Left - HT = Heat Treated

MB stands for Methyl Bromide – which is not allowed in the ILC Supply Chain

If infiltration should occur these pallets must be quarantined outside and subsequently removed from the campus

5

New Pharm Storage Footprint1. Pharm Material that is being stored in advance of production must be

contained in its own standalone delineated footprint 2. All Pharm materials must be housed on a clean heat treated pallet 3. Pharm material may not be comingled with non-pharm materials 4. Pharm material on heat treated pallets may not be stored next two a heat

treated pallet

Pharm Storage Footprint Delineation

LocationPharm Material

Allowed

Non Pharm Material Allowed

Non Heat Treated Pallets

AllowedHeat Treated

Pallets AllowedBld 3 - 126 and North NO YES YES YESBld 3 - 147 and North NO YES YES YESBalance of Building 3 YES NO NO YES

All of Building 2 YES NO NO YES

6

Footprint / Delineation Transition PlanHow will we transition to this new footprint?

1. Labor assignment – when capacity is available 2. In-bound natural migration

Critical Factors:

1. Accurate move transactions sin Pro 3 – verify contents and count before move

2. Transfer non – needed / non-pharm to Seaford 3. Adherence to transition plan and sustainability thereafter

What is the time frame to accomplish this transition?

Our goal is within the next 45 days

Additional success factors:

1. Emendation that Pharm suppliers use clean heat treated pallets 2. Augment RI process to validate clean heat treated pallets are being used by

Project 3400 suppliers during the incoming inspection process for the material being purchased

7

Clean Heat Treated Pallets ONLY! – in the ILC Pharm Supply Chain

Acceptable versus Non Acceptable Heated Treated Pallets that may be used in the ILC Supply Chain

Our intent is to capture N/C pallets during the RI inspection process. However, we still need you help during the transition plan as well as an overall safety net!

Acceptable Validation of HSTM 15 – HT seal

Unacceptable Major decay Dirt or grime on pallet surface Indication of bird dropping or spider webs Conspicuous stains Protruding nails or cleats Broken or splintered boards Sign of animal nesting Mold

No HSTM 15 – HT - Seal

8

Additional Information

Pests Of Concern Metallic Beetles Long Horned Beetles Carpenter & Leopard Moths Bark Weevils Pinhole Borers Bark Beetles Clearwing Moths Wood Wasps

9

Non -Acceptable ISPM Pallets

10

Acceptable next to Non - Acceptable