SUSTAINABILITY REPORT 2017

GROWING STRENGTH

Our products are made from one of the strongest fibres in the world, New Zealand-grown pinus radiata.

GROWING INNOVATION

The success of our customers, the standard of our products and the shape of the future depend upon our ability to innovate.

GROWING OUR FUTURE

We look towards the future and welcome change.

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GROWING PARTNERSHIPS

Relationships are at the heart of our business.

WE ARE A SPECIALIST IN

We are committed to delivering smart sustainable solutions.

We will innovate, adapt and grow. We will embrace the cycle of change, of investing in better ways, of developing partnerships, of looking to a future that is sustainable for us, our place and our collective future.

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

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

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

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

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

WE ARE OJI FIBRE SOLUTIONS

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HIGHLIGHTSNEW

TARGET

299,403

5* GREEN STAR-RATED BUILDING28 NEW JOBS TO DATE55,704 SQUARE METRE SITE

1 Non-compliance with environmental laws and/or regulations0 Product safety incidents0 Serious injuries

Recovered fibre collected by Fullcircle in 2017 with 205,605 tonnes used in our mills.

kWh GENERATED IN 2017: IN 2017:

NEW GRADUATES AND APPRENTICES

PERMANENT NEW STARTERS

VOLUNTARY TURNOVER

15% of our senior managers are female, up from 14% senior managers in 2016.

Located in New Zealand: 1,475 Australia: 288 China, Hong Kong, Malaysia: 8

72.3% Energy from biomass 6.3% Energy from geothermal steam

Up from 44% in 2016

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

Up from 46% in 2016

78.6%

SEPTEMBER 2017

EMPLOYEES RENEWABLE ENERGY

TON

NE

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Purchase of Cardboard Cartons business

FEMALE EMPLOYEES

paper-based packaging facility in Queensland, Australia, opened

INTERNALLY GENERATED ELECTRICITY

INTERNALLY GENERATED ELECTRICITY

47% 54%

17%

KINLEITH MILL

ELECTRICITY

MANUFACTURING OPERATIONS: 2017 ENERGY SOURCES

TASMAN MILL

53% Purchased electricity 46% Purchased electricity

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The information in this report complements the sustainability reporting of the Oji Group. Like the Oji Group, we are focused on achieving our sustainability targets and meeting the Group-wide aspiration of ‘zero-environmental burden’.

We continue to receive support from Oji Holdings to enable our future growth and success. We are determined to continue to develop a portfolio of products that address the needs of the sectors we support.

In 2017, we made another investment in our packaging business to support our objective to grow our packaging solutions market share in New Zealand and Australia. The acquisition of Cardboard Cartons in Victoria, Australia, in September 2017 expands the choice of products we can make available to our customers, and we have enjoyed welcoming a further 19 employees to the Oji Fibre Solutions family. In addition, we started manufacturing at our new $70 million Green Star-rated paper-based packaging facility in Yatala, Queensland in late 2017, while in New Zealand, our $30 million paper bag hygiene line and warehouse was officially opened in February 2017. These investments have allowed us to increase our production capacity, provide additional product solutions for our existing and future customers and add greater value to our local economies.

We are also putting a considerable amount of effort into optimising opportunities in the pulp and paper markets. As part of growing our strengths, we will be closing our bleaching operations at the Tasman Mill in early 2019. This will allow us to produce more world-class fibre cement pulp and other unbleached kraft pulp product solutions.

In our determination for a successful future, we are working to constantly improve our reliability, processes and product quality and to create opportunities for our customers to succeed. This all contributes to making Oji Fibre Solutions a more sustainable business.

We continue our journey to transform and become a more efficient and sustainable business. This year we added to the sustainability targets put in place in 2016 with updated health and safety targets taking us to the end of 2020. These targets complement the targets we set in 2016.

For us 2017 was a challenging year; however, I am pleased to say the team at Oji Fibre Solutions has put a huge amount of energy into improving our operations. I am confident this will improve our business performance and be reflected in our waste to landfill and greenhouse gas emission intensity results in the future.

Health and safety remains a top priority. Over the past two years, one of our major focuses has been on preparing Safety Cases for our Kinleith and Tasman Mills. We submitted these to WorkSafe in April 2018. The Safety Cases involved a detailed assessment of the major hazards at our mills, as well as identifying further changes we will put in place over the next two years to improve the safety of our operations and the communities that surround them.

Our people are constantly challenging themselves to develop solutions that will improve the way we do things and are working hard to develop innovative products that solve our customers’ challenges. With their help, we are looking forward to growing our future, our partnerships, our strengths and our innovations to become a more sustainable company. Please read on and enjoy our Sustainability Report.

We are committed to implementing activities to achieve a high level of results.

We are investing to enable our future growth and success.

DR JON RYDERCHIEF EXECUTIVE OFFICER (CEO)OJI FIBRE SOLUTIONS

HIROYUKI ISONODIRECTOR AND CHAIRMANOJI FIBRE SOLUTIONS

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FIBRE

RECOVERED

MARKET PULP

CONTAINERBOARD

PACKAGING

VIRGIN FIBRE

LOG

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PAPER RECYCLING Fullcircle is our recycling service, with 14 baling sites supplying recovered fibre to our mills.

OUR CUSTOMERS Our products are sold to more than 25 countries. We service the horticulture, dairy, meat, seafood, beverage, construction and personal care sectors.

THREE PULP AND PAPER MILLS Kinleith Mill, Tasman Mill, Penrose Mill. Our mills use elemental chlorine-free (ECF) bleaching processes.

TEN PACKAGING OPERATIONS In New Zealand and Australia.

TWO NEW PACKAGING FACILITIES One facility opened and one facility purchased in 2017.

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

MARKET PULP We produce kraft market pulps at our Kinleith and Tasman Mills for use in various boards, tissues and specialty products.

CONTAINERBOARD We produce kraft and recycled containerboards at our Kinleith and Penrose Mills to be converted into packaging products.

PACKAGING Our 10 converting sites in New Zealand and Australia provide smart packaging solutions – boxes, multiwall bags, specialty boards and paper cups.

HOW WE GROW VALUEWe are part of a circular economy, from virgin wood fibre to packaging products.

WHERE WE ARE

Our products are sold to more than 25 countries

NEW ZEALAND

MARKET PULP- Tokoroa- KawerauCONTAINERBOARD- Auckland- TokoroaPACKAGING- Auckland- Hamilton- Levin- ChristchurchPAPER RECYCLING - 14 Fullcircle sites

throughout New ZealandLOGISTICS- Auckland (Office)- Mount Maunganui

CHINA

MARKET PULP- Shanghai (Office)CONTAINERBOARD- Shanghai (Office)

MALAYSIA

CONTAINERBOARD- Kuala Lumpur (Office)

HONG KONG

CONTAINERBOARD- Hong Kong (Office)

AUSTRALIA

PACKAGING- Yatala - Brisbane- Sydney- Melbourne

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Ei-ichi Shibusawa creates Japan’s modern paper manufacturing industry with the establishment of Shoshi Kaisha (shoshi meaning paper making).

Series of expansions and mergers in the paper and packaging sector.

A mill is built in Oji, Tokyo, and commences production of paper from waste cloth.

Oji Paper Co., Ltd. transferred to a pure holding company system and started anew under the trade name “Oji Holdings Corporation”.

NZ$30 million investment in state-of- the-art Paper Bag facility upgrade.

Opening of new paper-based packaging facility in Yatala, Queensland, Australia.

2017

Purchase of Cardboard Cartons, Victoria, Australia.

2016

JAPAN NEW ZEALAND & AUSTRALIA

Keta Mill in Shizuoka starts Japan’s first use of wood pulp for procurement.

The company is renamed Oji Paper, after its founding location.

A STRATEGIC PARTNERSHIP

GROWING TOGETHER

Robert Holt’s steam sawmill opens.

Carter Holt acquires Alex Harvey Industries to form Carter Holt Harvey (CHH).

Alex Harvey commences tin-can manufacturing.

Purchase of Tasman Mill.

Acquisition of Carter Holt Harvey by Rank Group.

First Carter sawmill venture.

Merger of Carter & Holt operations into Carter Holt Holdings.

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After the purchase by Oji Holdings and Innovation Network Corporation of Japan (INCJ) of Carter Holt Harvey Limited’s pulp, paper and packaging businesses, a new company emerged: Oji Fibre Solutions. A company built upon, and supported by, an established, solid heritage.

2014

After the purchase by Oji Holdings and Innovation Network Corporation of Japan (INCJ) of

Carter Holt Harvey Limited’s pulp, paper and packaging businesses, a new company emerged:

Oji Fibre Solutions. A company built upon, and supported by, an established, solid heritage.

2014

Oji Fibre Solutions

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13GROWING

OUR FUTURE

We look towards the future and welcome change. We are proud to be a business built

on renewable and low carbon resources. We aspire to achieve zero environmental

burden. Our business is here for the long term.

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WE LOOK TOWARDS THE FUTURE AND WELCOME CHANGE

Wednesday 25th October 2017 marked a very special day for our Yatala site; we began production at our new state-of-the-art packaging facility in Queensland, Australia.

The new Yatala facility manufactures paper-based packaging for markets throughout Queensland, northern New South Wales and Northern Territory, Australia.

The facility uses the latest manufacturing technology. Our customers benefit from both advanced technologies and improved operating systems housed within a 5-star Green Star-rated building, with rainwater harvesting, energy efficiency systems and solar electricity generation.

This $70 million investment is an exciting development for Oji Fibre Solutions. It expands our packaging business in Australia, allowing us to better service existing customers and to grow our customer network.

New distribution centres have been opened in Mareeba and Bundaberg, Queensland, to support this facility, with plans to open further centres as demand grows.

YATALA PROVIDES SOLUTIONS TO

MEAT Providing exceptional strength characteristics for challenging refrigerated and frozen supply chains.

HORTICULTURE Delivering performance characteristics to protect fruit and produce from damage in chilled, cold store and export environments.

BEVERAGE Delivering high-quality, flat corrugated board, flexographic and pre-print solutions.

YATALA FACILITY

RAINWATER HARVESTING

SOLAR GENERATION

NEW JOBS TO DATE

SQUARE METRE SITE

5 GREEN STAR- RATED BUILDING

SEAFOOD Packing at sea, processing on shore or exporting, we have solutions to transport seafood products from boat to market in the best possible condition.

DAIRY Confidently export cartons worldwide and within the domestic markets, utilising kraft papers, which provide exceptional strength characteristics ideal for challenging supply chains.

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DELIVERING CHOICE FOR OUR CUSTOMERS

In September 2017, we announced a further step in the growth of Oji Fibre Solutions’ paper-based packaging business with the purchase of Cardboard Cartons Pty Limited.

Located in Dandenong South, Victoria, Australia, the newly named Oji Cardboard Carton Solutions is a leading manufacturer and supplier of specialty packaging solutions, including plain and printed corrugated cartons, litho printed cartons, shelf-ready cartons and point of purchase displays. Oji Cardboard Carton Solutions supplies to a variety of industries including fast moving consumer goods, wine, automotive and horticulture.

Oji Cardboard Carton Solutions employs 19 people, whom we are proud to welcome into our Oji Fibre Solutions family. We are excited to learn from them and integrate their expertise and knowledge into the business.

This acquisition reinforces our aim to provide our customers with high-quality product solutions and grow our market share in New Zealand and Australia. Oji Cardboard Carton Solutions expands our packaging business and allows for increased vertical integration, while providing complementary manufacturing capabilities and product lines for our customers.

SUPPLIER OF SPECIALTY PACKAGING TO:

- Fast Moving Consumer Goods- Wine- Automotive- Horticulture

The purchase confirms our commitment to provide our customers with a broader service and product solutions.

Oji Cardboard Carton Solutions expands our packaging business and allows for increased vertical integration, while providing complementary manufacturing capabilities and product lines for our customers.

NICK MOLLOYGENERAL MANAGER PACKAGING AUS

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A NEW ERA AT TASMAN MILL

In June 2018, we announced that Tasman Mill, located in Kawerau, New Zealand, will be focusing on unbleached kraft market pulp products. As a result, we aim to cease bleaching operations in March 2019.

Oji Fibre Solutions’ K25 is recognised as a leading brand of fibre cement pulp (FCP), which is used in the building industry to make various fibre cement building products. Unbleached pulp, such as K25, has replaced the historical use of asbestos in these end-uses, creating safer building products and homes for our families.

The Tasman Mill is a leader in the manufacture of fibre cement pulp, and our unbleached kraft pulps have a long-established history. New Zealand-grown pinus radiata produces ideal cellulose fibre qualities for these end-use products.

Chief Executive Officer Dr Jon Ryder says, “The changes place us in a position to support further growth of our premium FCP K25 product and at the same time respond to the growing demand for unbleached packing grades and other specialty unbleached products.”

In the future, production of bleached kraft market pulp will be focused at Oji Fibre Solutions Kinleith Mill, while the Tasman Mill will operate at capacity producing unbleached kraft market pulp products to ensure a continued long-term future for the Tasman Mill.

Our strategic directional change at the Tasman Mill to focus on unbleached kraft pulp provides an opportunity for us to build long-term relationships with existing and new customers. Truly a new era for Oji Fibre Solutions and our customers.MIKE MEIRINGVICE PRESIDENT – SALES & MARKETING – PULP

We are making changes to focus on what we do best at the Tasman Mill, which is to produce more world-class fibre cement pulp and to meet growing demand for other unbleached kraft pulp products.

TERRY SKIFFINGTON CHIEF OPERATING OFFICER

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

2 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.

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

4 A serious injury is defined as any condition that results in a person being permanently disabled or requiring immediate in-patient hospitalisation.5 Frequency rate of accidents resulting in lost work time = (Lost-time injuries/total work time) * 200,000.6 Frequency rate of accidents resulting in injury = (Lost-time injuries + restricted work injuries + medically treated injuries/total work time) * 200,000.

WE CONTINUE TO TARGET ZERO

TARGET 2015 (BASELINE) 2016 2017 2020 TARGET

Zero non-compliance with environmental laws and regulations1

0 0 1 0

6% reduction in GHG emission intensity from 2015 levels before the end of 20202

0.270 tCO2-e/t 0.287 tCO2-e/t 0.291 tCO2-e/t 0.254 tCO2-e/t

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

39,507 t 40,507 t 42,103 t 27,655 t

Zero product safety incidents3 0 0 0 0

TARGET 2015 2016 (BASELINE) 2017 2017 TARGET

Zero serious injuries4 0 0 0 0

10% reduction Lost-time Injury Rate (LTIR) in 20175 1.03 0.73 1.09 0.66

8% reduction Total Injury Rate (TIR) in 20176 2.14 1.85 2.64 1.71

Oji Holdings aspires to operate in harmony with the environment. Its environmental action programme is defined by the aspiration of “zero environmental burden”.

Driven by the same aspirations, we have set five-year targets with 2015 as the base year, which reflects the purchase of our business by Oji Holdings and Innovation Network Corporation of Japan (INCJ) in late 2014.

As we transform for a sustainable future, we have set and presented our targets publicly in the Oji Fibre Solutions Sustainability Report in support of Oji Holdings’ aspirational targets.

TARGETING WASTE

DRY BASIS

Reduction in waste to landfill from 2015 levelsBefore the end of 2020

TARGETING COMPLIANCE

TARGETING GREENHOUSE GAS (GHG) EMISSIONS

ZERONon-compliance with environmental laws and regulations1

Reduction in GHG emission intensity from 2015 levelsBefore the end of 20202

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

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

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TARGET

Zero non-compliance with environmental laws and regulations.1

TARGETING ZERO NON-COMPLIANCE

Oji Fibre Solutions is committed to complying with our legal obligations as expressed in our zero-non-compliance target. 1

At 31st December 2017, Oji Fibre Solutions held 42 environmental consents for our mills and packaging facilities in New Zealand and Australia. Our facilities are subject to numerous conditions in relation to factors such as water abstraction, water quality, waste discharges, air quality and environmental monitoring.

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

NON-COMPLIANCE SITE DETAILS OF NON-COMPLIANCE

Regulatory limit violation

Tasman Mill Mill-wide particulate emissions to air exceeded the site consent limit as a result of a rolling annual average calculation. Emission sources were operating within their normal range at the time. The result was caused by insufficient monitoring. The monitoring approach is now rectified and emissions remain within limits.

In 2017, we did not achieve zero non-compliance with environmental laws and regulations. We had one regulatory limit violation. In this instance, remedial action was taken immediately and processes reviewed to minimise a reoccurrence.

In 2017, we continued to undertake annual compliance audits both internally and by external third-party auditors. In addition, we continued the review of our environmental management systems at our packaging facilities in New Zealand and extended the process to our Australian sites. This effort continues to lead to improvements across the business.

Zero non-compliance with environmental laws and regulations.1

TARGET:

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TOWARDS ZERO WASTE

MANUFACTURING OPERATIONS: WASTE DESTINATIONS, 2017

Oji Fibre Solutions is a major user and recycler of both its own waste and waste from customers and others. Paper waste from our customers and packaging facilities is utilised in our paper mills to produced recycled paper.

Sludge from our wastewater treatment facilities is used as the main component of vermicompost, which is sold for agricultural use. Biomass from sawmilling, forestry activities and our own chipping and debarking operations is used as fuel, and by-products from our processes are ingredients for other manufacturers’ products.

TO COMPOST

TO RECYCLE

HAZARDOUS WASTE

TO LANDFILL

205,605 of recovered fibre utilised by Kinleith and Penrose Mills for conversion into containerboard products in 2017.

WASTE TO LANDFILL

45

40

35

30

25

20

15

10

5

0

2015 2016 2017 TARGET 2020

’00

0 T

ON

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(D

RY

BA

SIS)

27,6

55

We are striving to maximise our waste usage and minimise our waste to landfill. In 2017, our reduction efforts were offset by production issues at our pulp and paper mills in New Zealand, but we continued to focus on finding solutions at these sites.

We have worked to reduce lime waste production in-mill and to develop systems for reliably using lime wastes as a fertiliser on farm land. We have also looked closely at options for wood ash from the Kinleith Mill’s power boiler.

These projects are likely to result in large amounts of waste diverted from landfill and add to the in-mill recycling efforts and other measures, so we expect to reap benefits by 2020.

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

TARGET:

(DRY BASIS)

TONNES

TARGET REDUCE WASTE TO

LANDFILL BY:

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SOURCES:1 Data for 12 months ending 30/09/20172 New Zealand Energy Quarterly; September Quarter 2017

(released December 2017) (MBIE: www.mbie.govt.nz)3 2017 Australian Energy Update, August 2017

(DEE: www.energy.gov.au)4 Key World Energy Statistics 2017

(International Energy Agency: www.iea.org)

In 2017, 98.4% of our total purchased electricity was consumed in New Zealand, with the remaining 1.6% in Australia.

New Zealand generated 83.4% of its electricity in 2017 from renewable sources.

SUSTAINABLE ENERGY SOURCESOji Fibre Solutions is one of New Zealand’s largest consumers and producers of energy.

Electricity is generated on-site using biomass sourced from black liquor, a by-product of pulp production, wood waste residues and natural gas.

The majority of wood-waste residues come from third-party sawmilling and forestry activities and approximately one-third is site-generated from our chipping and debarking operations.

Our energy consumption profile shows 72.3% of our energy was from biomass in 2017.

PURCHASED ELECTRICITY GENERATION 83.4%

23.1%

85.2%

New Zealand (2017) 1, 2

Australia (2015/2016) 3

World (2015/2016) 4

RENEWABLE FUEL SOURCES Hydro, solar, wind, biomass, geothermal steam

NON-RENEWABLE FUEL SOURCES Natural gas, coal, oil, nuclear

0.29

0.28

0.27

0.26

0.25

0.24

0.23

2015 2016 2017 TARGET 2020

tCO

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t TO

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GHG EMISSION INTENSITY

WHAT IS ‘GHG EMISSION INTENSITY’?

Greenhouse gas (GHG) emission intensity for Oji Fibre Solutions 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.

WHAT ARE SCOPE 1 AND SCOPE 2 EMISSIONS?

The GHG Protocol1, an internationally recognised standard, provides a classification of GHG emissions, which we have adopted.

Scope 1 Direct GHG emissions = GHG emissions from sources that are owned or controlled by Oji Fibre Solutions.

Scope 2 Indirect GHG emissions = GHG emissions that result from the generation of purchased electricity or geothermal steam consumed by Oji Fibre Solutions.

WHAT ARE CO2 EQUIVALENT (CO2-e) EMISSIONS?

CO2-e is an abbreviation of ‘carbon dioxide equivalent’ and is the internationally recognised measure of greenhouse gas emissions. It is a measure used to compare the emissions from various types of greenhouse gases based on their global warming potential (GWP). The CO2 equivalent for a gas is determined by multiplying the metric tonnes of the gas by the associated GWP. Oji Fibre Solutions’ CO2-e includes carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O) emissions as these are the most relevant for the pulp and paper industry.

TARGET REDUCE GHG

EMISSION INTENSITY BY:

0.25

4

MANUFACTURING OPERATIONS: ENERGY CONSUMPTION PROFILE, 2017

78.6% RENEWABLE ENERGY (Biomass, geothermal steam)1

1 Contribution from purchased electricity is not included.

6.3%

72.3%

PURCHASED ELECTRICITY

BIOMASS

COAL

GEOTHERMAL STEAM

NATURAL GAS

OIL-BASED FUELS

In 2017, our GHG emission intensity was 0.291 tCO2-e/t. We have been working with the New Zealand Energy Efficiency and Conservation Authority (EECA) and other partners to identify and progress projects that reduce GHG emissions.

We have started to implement these; some are small projects and some large. For example, we have started installing advanced metering at our packaging sites to enable detailed targeting and monitoring of energy use.

The New Zealand electricity transmission company Transpower is in the process of rebuilding the Kinleith substation, which will improve site reliability and reduce requirements for auxiliary steam from our gas boilers.

6% reduction in GHG emission intensity from 2015 levels before the end of 2020.

TARGET:

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

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RESPONSIBLE MANAGEMENT OF WATER RESOURCES

MANUFACTURING OPERATIONS:WATER SOURCES, 2017

Surface Water 77.8%

Groundwater 21.8%

Municipal Water 0.6%

FORESTS WATER CYCLE

WASTEWATER TREATMENT

PRODUCTS

NON-FIBRE RAW MATERIAL

Precipitation

Evapo-transpiration

Surface water run-off and groundwater recharge

Surface waterGroundwater

Municipal water

SteamOther water input

Process wastewaterWater in products

Water in wood

MANUFACTURING

Oji Fibre Solutions strives to use and manage water responsibly. Water is used and reused in all our major process stages – from log debarking to chip washing, pulp washing and screening – and in the paper machines. Water is also used to generate steam for use in production processes, on-site power generation, process cooling, equipment cleaning and general facility operations.

In New Zealand, our mills have a responsibility to use, treat and monitor water in accordance with their environmental consents under the Resource Management Act (RMA). Process water from our Kinleith and Tasman Mills undergo primary and secondary treatment before being discharged into local rivers. These discharges are regularly monitored and reported to the local councils for a range of parameters including total suspended solids, biochemical oxygen demand (BOD), colour, toxicity, organic chemicals, chlorinated organic chemicals (AOX), pH, chemical oxygen demand (COD), nitrogen and phosphorus. Our other operations manage wastewater to meet the standards required for discharge into council-managed trade waste systems.

TASMAN MILL EFFLUENT COLOUR REDUCTION PROGRAMME

Oji Fibre Solutions recognises that effluent colour discharges at Tasman Mill are an amenity concern for the local community, so colour reduction is a continuing priority.

Tasman Mill co-manages its wastewater treatment infrastructure with the neighbouring newsprint operation, Norske Skog Tasman. We are committed to a colour reduction-programme with a goal to reduce colour to the regulated target of 10 tonnes per day (Pt-Co Equivalent) by 2035. This is the point at which it is considered to be inconspicuous.

We are ahead of our interim regulatory targets. In 2017, the average colour load was 15.7 tonnes per day.

TASMAN MILL COLOUR DISCHARGE AND CONSENT LIMIT

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02000 2017 2035

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t/d)

Consent limit

Discharge

WHERE TO FIND OUT ABOUT THE QUALITY OF THE RIVER AND THE MILL DISCHARGE

The Waikato Regional Council and Bay of Plenty Regional Council monitor waterways and compliance with consents.

Both councils hold copies of our monitoring reports. However, we are happy to send our compliance reports to anyone who is interested.

TONNES PER DAY

REGULATED TARGET

(Pt-Co EQUIVALENT) BY 2035

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INSPIRING THE NEXT GENERATION

Tarawera High School Year 13 science students brought their learning out of the classroom in June during a field trip to the Oji Fibre Solutions Tasman Mill in Kawerau, New Zealand.

Currently studying processes, having the opportunity to visit Oji Fibre Solutions was extremely beneficial to the students’ learning. It was fantastic to get students through and inspire them and it was rewarding for our people to see the lightbulb moment when a student grasps a concept. The students got the whole mill experience. The day started off with a safety induction, which had the students decked out in high-viz jackets, hard hats, safety glasses and ear plugs before they were able to go through the whole pulping process from start to finish.

Science teacher Jalaja Balakrishnan said it was fascinating seeing the process in person. “As a science teacher, I deal with the theory all the time, but it was amazing seeing it occurring in front of you. We’re really privileged that Oji Fibre Solutions allowed our students this opportunity. It’s relevant to the students’ learning as well as to their understanding of the very town they live in.”

Head girl Taylor Van Gulick agreed, saying, “It’s given me a better understanding of my community. It’s been amazing seeing the mill that our town was built around.”

Students saw first-hand how the wood comes in, where it’s stored and how it’s transported and cut up. They saw the chipper, the digesters and the kilns. Students were allowed into the control room, where they got the chance to take a seat at the control desks. From here, the students toured the washers and dryers, where they were able to see the pulping process at different stages and get a hands-on experience; getting to feel the pulp at each different stage.

The tour was wrapped up in the packaging department where the students saw the process in which the pulp is weighed, wrapped and distributed to the customer.

The trip proved to be an insightful and interesting session where students asked questions not only on the processes but also on life in the workplace and pathways to becoming an engineer or a worker on an industrial site.

- Supplied by Tarawera High School

As a science teacher, I deal with the theory all the time, but it was amazing seeing it occurring in front of you. We’re really privileged that Oji Fibre Solutions allowed our students this opportunity. It’s relevant to the students’ learning as well as to their understanding of the very town they live in.JALAJA BALAKRISHNANSCIENCE TEACHER TARAWERA HIGH SCHOOL

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Relationships are at the heart of our business.Our customers can trust our products because

our people are the best at what they do.As a solutions-focused company, we are continually looking at new ways we can

support our customers.

GROWING PARTNERSHIPS

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OUR CUSTOMERSOur customers trust us to deliver high-quality products that solve their problems, whether big or small, and help improve their competitiveness.

Our shareholders

Our people

Unions

Customers

Suppliers

Local communities

Local iwi

Local and central government

Non-governmental organisations (NGOs)

The media

OUR STAKEHOLDERS

RELATIONSHIPS ARE AT THE HEART OF OUR BUSINESS

We work to be trusted by our employees, our communities, our customers and other stakeholders by investing our energy and time into creating and maintaining meaningful relationships.

Our customers trust us to deliver high-quality products that solve their problems, whether big or small, and help improve their competitiveness. Our people are problem solvers and the best at what they do. From converting our virgin wood and recovered fibre into pulp, paper or packaging product solutions, our people are there to help our customers along, every step of the way.

We invest in our people’s training and professional development to drive performance. No one understands pulp, paper and packaging better than we do.

We interact with our stakeholders, via forums, meetings, site visits, charitable partnerships and association memberships, to ensure we are working towards the same sustainable future.

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COMMITTED TO THE WELLBEING OF OUR PEOPLE

Our people are what make our organisation successful, and we want them all to be the best that they can be; both in their personal lives and at work. This is beneficial for both employees and the company.

In 2017 we launched a new online wellbeing portal – “Flourish” – to support our commitment to enhancing the wellbeing of our people. It is designed to help employees and their families achieve health and fitness goals by providing access to a range of health-related tools and activities, such as recipes, exercise guides, an online health assessment, team and individual challenges and discounts on health products and services.

NEW WELLBEING PROGRAMME

67,831,512 TOTAL STEPS

KM TRAVELLED

OF PARTICIPANTS FELT MOTIVATED TO MAKE POSITIVE LIFESTYLE CHANGES

OF PARTICIPANTS FELT THEIR ENERGY AND PRODUCTIVITY LEVELS HAD BEEN IMPROVED

SHIFT CHALLENGE

260 of our people, in 65 teams, participated in the inaugural Flourish ‘Shift’ challenge in March 2017.

The four-week challenge encouraged movement and activity through the counting and logging of steps but, equally importantly, generated a sense of wellbeing through team camaraderie and friendly competition.

EVERYONE SAFELY HOME EVERY DAY

In 2017, we had zero serious injuries but did not achieve our one-year Lost-time Injury Rate (LTIR) nor our Total Injury Rate (TIR) targets.

We have refreshed our health and safety strategy and updated our injury targets taking us to the end of 2020; aiming for 50% reduction in LTIR and TIR by 2020 compared to 2017.

We have worked on culture, employee engagement and incident management resulting in additional commitments in these areas. These targets and initiatives complement the rest of our sustainability targets set in 2016.

OUR AIM To send everyone Safely Home Every Day.

OUR VISION Good health and safety performance

is simply part of what we do.

Don’t walk past a

problem

Think safe; act safer

Safety starts and ends with me

Make the safe way the

right way

Take 5 to stay alive

OUR MANTRAS

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OUR H&S FOCUS

Our Safety Case documents have been submitted for approval to WorkSafe NZ. The continued development of process safety management capability at our two Major Hazard Facility sites – Kinleith and Tasman Mills – will remain a major focus.

SAFETY CASE COMPLETION AND IMPLEMENTATION

The development of a strong and positive safety culture is critical to our future success. Our focus will be to develop and implement structured and coordinated programmes to increase employee involvement and engagement; and to promote positive behaviour and attitudes across our whole workforce.

CULTURE AND BEHAVIOURAL DEVELOPMENT

To maintain and strengthen our approach to health, wellbeing and fitness for work for our people from the day they join Oji Fibre Solutions.

OCCUPATIONAL HEALTH, WELLBEING AND FITNESS FOR WORK

Effective communication of health and safety messages and information is key to driving awareness, understanding, engagement and behaviour. We will focus on ensuring all messages are delivered in a consistent manner and format and they reach their target audience in the most understandable and impactful way possible.

COMMUNICATIONS PROGRAMME

90%

0

HEALTH & SAFETY CULTUREAchieve minimum 90% positive response score in the health and safety culture survey.

WELLBEING PROMOTIONMinimum 50% of employees signed-up to our wellbeing programme, Flourish, by the end of 2020.

ZERO SERIOUS INJURIESA serious injury is defined as any condition that results in a person being permanently disabled or requiring immediate in-patient hospitalisation.

REDUCTION IN LOST-TIME INJURY RATE(LTIR) from 2017 levels by the end of 2020. Frequency rate of accidents resulting in lost work time = (Lost-time injuries/total work time) x 200,000.

REDUCTION IN TOTAL INJURY RATE(TIR) from 2017 levels by the end of 2020. Frequency rate of accidents resulting in injury = (Lost-time injuries + restricted work injuries + medically treated injuries/total work time) x 200,000.

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SUPPORTING OUR CUSTOMERS

Honest is a small company with big ideas who want people to drink capsule coffee that’s great for our planet.

Honest was developed to address the issue of coffee capsules going to landfill. The team at Honest wanted to provide an environmentally sustainable option, which tastes great and is great for the planet. This philosophy extended to their packaging and their work with the team at Oji Fibre Solutions.

For more information, please visit: www.honestcoffee.co.nz

Feed My Furbaby is a tailored pet food delivery service in New Zealand, and their packaging is a breakthrough for the pet food industry.

One of the company’s main drivers is to give pet parents the opportunity to make responsible choices on behalf of their pets – the unique and innovative box is a big part of this story.

The Oji Fibre Solutions packaging team came up with an innovative design which includes a cut-out scoop to enable the ‘furbaby’ to be fed the right amount each meal. The box also has a cut-out window to keep an eye on how much food is left. Most importantly, the outer box is 100% recyclable and made in New Zealand from responsibly sourced materials.

The rigid cardboard outer packaging reduces the plastic required by up to 50%. The 5kg box of food has carry handles so it is much easier to handle than big awkward plastic bags, and it is designed for daily use and tidy storage in the home. No more plastic storage containers required. The team at Feed My Furbaby aims to further improve the sustainability of their product as they grow and are working with some exciting companies to make their product 100% plastic free.

For more information, please visit: www.feedmyfurbaby.co.nz

Our packaging is our absolute pride and joy. We have worked for three months with Oji Fibre Solutions’ Auckland-based designers and packaging specialists to produce Honest’s very first packaging offering.

Subscription services are becoming very popular, and people understand the concept now as a business model, that is why we have looked for unique selling points. Our packaging is a big differentiator for us, as is the convenience of our tailored feeding plan.

JOSH COLEOWNER & FOUNDER HONEST COFFEE

AMY AND BEN RENELLFOUNDERS FEED MY FURBABY

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COMMUNITY PARTNERSHIP PROGRAMME

We have been supporting the Graeme Dingle Foundation to help school-age children in local communities, particularly in Tokoroa, for several years.

The Graeme Dingle Foundation aims to inspire all school-age New Zealand children to reach their full potential through programmes that help build self-esteem, promote good values and which teach valuable life, education and health skills.

Over 1,000 Tokoroa children and young people, their families and community are supported by the Graeme Dingle Foundation Waikato programmes.

For more information, please visit: www.dinglefoundation.org.nz

WE ARE PROUD TO SUPPORT KIWI CAN AND STARS PROGRAMME AT:David Henry Primary, Mangakakino School, Strathmore Primary, Tokoroa Central Primary, Tainui Primary, Whakamaru School, Tokoroa High, and Forest View High.

GRAEME DINGLE FOUNDATION

Collectively we raised $1,650 to help support and develop local children from communities of the highest need in New Zealand. We as a company also donated a further $1,900 towards this initiative.DR JON RYDERCHIEF EXECUTIVE OFFICER, OJI FIBRE SOLUTIONS

DROP YOUR BOSS

In 2017, we took part in an exciting event to raise money for the Graeme Dingle Foundation to support their fantastic work.

It’s called Drop Your Boss and it literally is just that! We had four brave bosses ready to plummet off Auckland’s iconic Skytower all in the name of raising money for a good cause. The catch was only one boss would have the exciting opportunity to take the plunge – and our people would donate and vote to see who this would be!

When we tallied up the donations the winner was… our Chief Information Officer (CIO), Deon Snyders. Deon raised the most money so had the opportunity to jump. On a sunny Thursday morning in June, our unsuspecting CIO was told that he was our winner. And just an hour later, he leapt off the Skytower for a great cause.

DUFFY BOOKS IN HOMES

KAWERAU WOODFEST

Oji Fibre Solutions shares the Duffy Books in Homes vision to inspire a love of books in children so they become adults with a love of reading.

Prominent New Zealanders are engaged to talk to children about their achievements and goals. They tell them “It’s cool to read, and cool to achieve” and make a connection between success and reading. Twice a year, special Role Model assemblies are held where the children are presented with their books.

Oji Fibre Solutions sponsors Duffy Books in Homes in three schools in the Waikato region: David Henry School and Strathmore School in Tokoroa, and Kawerau South School. In 2017, our sponsorship provided the children at these schools five new books of their choice, which equates to over 3,200 books and around 550 happy children.

For more information, please visit: www.booksinhomes.org.nz

Oji Fibre Solutions supported the Kawerau Woodfest in the Bay of Plenty. The Kawerau Woodfest and National Woodskills Competition is New Zealand’s premier festival celebrating

all things wood, attracting around 12,000 people. With a huge range of activities and attractions, there is something for visitors of all ages to enjoy. Oji Fibre Solutions sponsored “The Big Dig World Champs”, a woodchip shovelling competition for adults and children. We were present during the events through a promotional trailer, providing information on the Tasman Mill and some hand-outs for kids. Involvement in this event shows how we are part of our communities, which is one of the strengths of our business.

The community were impressed and our people proud that Oji Fibre Solutions took part in the festival and put us out there for their families to see. “Our families and friends hear about the Mill and drive past it every day, but our families don’t really know anything about our work. It was awesome – the actual word they used was tumeke!”

WE ARE PROUD TO SUPPORT:David Henry School and Strathmore School in Tokoroa and Kawerau South School.

KINLEITH FUN RUNOn Saturday 18th November, the 6th annual Kinleith Fun Run/Walk Event was held at the South Waikato Sport and Events Centre and Cougar Park in Tokoroa.

With 325 entries, including 150 children, it was a great sunny day for the community, family and friends. There was entertainment, face painting, coffee, ice cream trucks and a gourmet BBQ lunch. Events includes a 1km and 2km kids’ fun run/walk and a 5km or 10km fun run/walk for adults. There was over $10,000 worth of major and minor spot prizes, everyone was keen to stay for the prizegiving to try their luck.

The Kinleith Fun Run committee donated money to two charities from the local community: South Waikato Living without Violence Trust and Tokoroa Council of Social Services (TCOSS). The event was a success with the help of 30 volunteers from the Kinleith Wellness Committee, Kinleith Mill employees, local sports clubs and generous donations from local and nationwide businesses.

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Our logistics team at Lodestar have been working collaboratively with the Port of Tauranga to commission a brand-new paper and forest products storage facility at the port. The facility was commissioned in April 2017 and is now fully utilised as a key component of our export supply chain.

The Port of Tauranga is an important business partner for Oji Fibre Solutions, as the port is the gateway for delivering more than a million tonnes of export cargo produced in the company’s two large pulp and paper mills to global markets.

The new facility, known as Shed 16, is 22,000 square metres, and represents a significant enhancement to the quality of our export logistics solution delivered to our customers.

Shed 16 is strategically placed on port land, directly adjacent to the export terminal, and in close proximity to container yards, which enhances our ability to optimise container flows into the facility, while maintaining our strategic access to the export terminal. This has future-proofed our operations and enables us to provide a smoother supply chain for our customers.

This is a great example of partnering, not only with the Port of Tauranga, but also with our customers and shipping providers. The strategic alliance with Oji Fibre Solutions allows the Port of Tauranga to invest with confidence, while delivering savings to our shipping lines and creating a smoother supply chain for our customers.

PARTNERING WITH THE PORT OF TAURANGA

FUTURE-PROOFING OUR OPERATIONS

Square metre storage facility for paper and forest products.

Strategic access to export terminals and container yards.

OUR PARTNERSPartnering with the Port of Tauranga and shipping lines to create a smoother supply chain for our customers.

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ISO 9001:2008-certified or ISO 9001:2015-certified Quality Management Systems at all Oji Fibre Solutions’ manufacturing sites.

ISO 14001:2004-certified Environmental Management System at Tasman Mill.

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

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

ISO 22000:2005-certified Food Safety Management System at Packaging NZ – Northern, Packaging NZ – Central and Packaging NZ – Southern.

Hazard Analysis and Critical Control Point (HACCP) compliance at Paper Bag and Foodservice Packaging.

AS/NZS 4801:2001 Occupational Health and Safety Management System at Packaging AUS – Lansvale and Noble Park sites.

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

OUR CERTIFICATIONS & STANDARDS

To note: our newly opened packaging facility in Yatala, Queensland, Australia and newly purchased Oji Cardboard Carton Solutions packaging facility in Melbourne, Victoria, Australia have yet to undergo certification processes.

SHARING KNOWLEDGE WITH INDUSTRY PEERS

OUR MEMBERSHIPS INCLUDE:

Oji Fibre Solutions actively shares knowledge with industry peers. These two-way relationships provide growth for both our employees and business, while benefiting the wider New Zealand and Australian industry.

WOOD PROCESSORS & MANUFACTURERS ASSOCIATION (WPMA) OF NEW ZEALAND

The Wood Processors & Manufacturers Association brings together all parts of New Zealand’s wood supply chain in one industry organisation to give strength and unity to dealing with the challenges facing the industry.

TECHNICAL ASSOCIATION OF THE AUSTRALIAN AND NEW ZEALAND PULP AND PAPER INDUSTRY (APPITA)

Appita facilitates the network of stakeholders to advance the technical capability and expertise of the Australian and New Zealand pulp and paper industry.

PAPER FORUM NEW ZEALANDThe New Zealand Paper Forum was established with a mandate to represent the

interests of all parts of the paper supply chain, from manufacturers and importers to printers, publishers and recyclers.

AUSTRALIAN PACKAGING COVENANT (APC)The Australian Packaging Covenant has been in effect from 1 July 2010.

This covenant focuses on improved packaging design, ‘away from home’ recycling, litter reduction and increased engagement across the supply chain through product stewardship.

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Our products are made from one of the strongest fibres in the world, New Zealand-grown pinus radiata.

Add to that our heritage, our connection with an inspirational global company and

our great people and you have a very strong combination.

GROWING STRENGTH

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We are specialists in market pulp, containerboard and paper-based packaging.

MARKET PULP

PACKAGING PRODUCTS CONTAINERBOARD

THE SOLUTIONS WE OFFER

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We produce kraft and recycled containerboards to be converted into packaging products. Our kraft and recycled fibre-based containerboards are chosen by our customers to meet their specific requirements.

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

GRAPHIX™ is a high-strength white liner that delivers quality graphics.

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

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

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

MARKET PULP

CONTAINERBOARD

Our paper products are used to package high-quality products all around the world. From locally grown kiwifruit to high-value Korean electronics and the Wilson tennis balls used in the US Open. In each case, our customers use our high-performance papers in the knowledge that their goods will reach their final destination in pristine condition.”GRANT WILCOCKVICE PRESIDENT SALES & MARKETING – PAPER

We produce kraft market pulps for use in various boards, tissues and specialty products. Customers trust us to deliver uniform quality products on time, every time.

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

HI WHITE LCP™ brand of bleached radiata pine kraft pulp is produced from specially selected woodchips. It is designed for tissue products where both softness and strength are important qualities for end consumers.

K25™ is a wood pulp used in the production of high-quality cement-based building boards. Customers value the special fibre properties together with the very tightly controlled quality parameters and product consistency.

To thrive, we need to be adaptable to our environment, foster productive customer relationships and build a sense of community within our business. We aim to make that our strength.

MIKE MEIRINGVICE PRESIDENT SALES & MARKETING – PULP

OJI FIBRE SOLUTIONS: OUTPUTS, 2017

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We are very conscious of our environmental responsibilities and the opportunity this creates to establish competitive advantage for our customers and organisation. This is reflected in our new state-of-the-art, 75,000 tonne capacity corrugated packaging facility in Yatala, Queensland, Australia.NICK MOLLOYGENERAL MANAGER PACKAGING AUS

We provide smart packaging solutions such as boxes, multiwall bags, specialty boards and paper cups. Our fibre-based packaging solutions are chosen by our customers to meet their individual specifications.

CARDBOARD PACKAGING We produce a comprehensive selection of cardboard products for numerous industries, including horticulture, dairy, meat, beverage, seafood, reseller and industrial manufacturing.

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

SPECIALTY BOARDS Our specialty boards are used in the manufacture of heavy-duty packaging, packaging for frozen and chilled products, point-of-sale displays, solid fibre slipsheets and bulk bins.

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

PACKAGING

Our strength is based on tailoring our products and services to customer needs – developing an innovative new traceability technology for application on our paper bags is just one example.

GRANT FITZGIBBONGROUP GENERAL MANAGER PACKAGING NZ

PAPER RECYCLING

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

14 BALING PLANTSNationwide in New Zealand from Auckland to Invercargill.

2 CHARTER SHIPS

MATERIALS RECOVERY FACILITIESIn partnership with Wellington City Council and Dunedin Regional Council.

TEU CONTAINERS PER ANNUM

299,403TONNES OF RECOVERED FIBRE COLLECTEDby Fullcircle in 2017.

TONNES OF RECOVERED FIBRE UTILISEDby our Kinleith and Penrose Mills in 2017.

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

LOGISTICS

1.4M TONNES OF EXPORT CARGO

FREIGHT TONNES DOMESTICALLY (road and rail)

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1 Paper products include internally produced and externally purchased paper, containerboard, wrapping, cores.2 Externally purchased market pulp.

OUR FIBRE INPUTS

3,563,251

RECOVERED FIBRE

VIRGIN WOOD FIBRE(logs and chips)

PAPER PRODUCTS1

MARKET PULP2

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TOPLOG 2Used for pulp

SLABWOODUsed for pulp

SLABWOODUsed for pulp

SAWLOG 2Used for timber products, building furniture

SAWLOG 2Used for timber products, building furniture

TOPLOG 1Used for pulp, timber products

OUR VIRGIN WOOD FIBRE

Oji Fibre Solutions requires all suppliers to comply with relevant legislation and with the company’s wood-sourcing policy.

Wood for our pulp and paper mills comes from exotic plantation-grown forests in the North Island of New Zealand.

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

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To provide surety of the integrity of our products to our customers, our fibre is subject to a due diligence process to ensure it complies with international laws relating to illegal logging.

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

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

Illegally harvested wood

Wood harvested in violation of traditional and human rights

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

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

Wood from forests in which genetically modified trees are planted

Kinleith and Tasman Mills have both FSC® and PEFC™ Chain of Custody certification. This ensures the wood can be tracked from the point of harvest through to the finished product delivered to our customers.

FSC® and PEFC™ have set standards for forest management to protect environmental, social and economic values. Independent auditors certify that forests meet these standards. Kinleith and Tasman Mills source as much of their wood as is practicable from FSC® and PEFC™-certified sources, with the balance meeting the standards to prevent the use of unacceptable material as defined in our Wood Sourcing Policy.

RESPONSIBLE SOURCING OF VIRGIN WOOD FIBRE

RESPONSIBLE WOOD SOURCING POLICY

OUR CERTIFICATIONS

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

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

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

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

FOREST STEWARDSHIP COUNCIL (FSC®)

PROGRAMME FOR THE ENDORSEMENT OF FOREST CERTIFICATION (PEFC™)

Radiata pine is typically harvested after 25 to 28 years. Oji Fibre Solutions is investigating the feasibility of 10 to 14 year rotation radiata pine plantations as a potential feedstock to our mills.

The trial is looking at planting densities of 700, 1,000 and 1,500 stems per hectare. It will test elite radiata pine families with superior wood and fibre properties. This approach aims to grow more wood per hectare thereby improving the conversion of wood chips to pulp reducing the cost of wood without the loss of fibre characteristics.

If successful at a commercial level, we expect the proposed new pulpwood regime to contribute to New Zealand’s greenhouse gas emissions reductions by giving landowners greater choice of forest rotation length.

PULPWOOD PLANTATION TRIAL

COMMON QUESTIONS

Does the use of virgin fibre deplete native forests?

Oji Fibre Solutions’ use of virgin fibre does not impact on native forest as no native species are used in Oji Fibre Solutions products. Our pulp and paper mills source wood from plantation-grown, introduced species of trees, purpose-grown in a tree-farming environment. These designated tree farms displace the felling of natural forests both in New Zealand and overseas.

Do tree plantations mean an end to biodiversity?

No; Oji Fibre Solutions’ forestry suppliers have statutory obligations and industry agreements to protect biodiversity within their forest estates. Independent research has identified a wide range of rare and threatened species living within plantation-grown forests.

What is the relationship between forest products and the carbon cycle?

Trees absorb C02 as they grow. After harvest, they release emissions when wood products degrade or where wood is burned as a fuel. If forests are managed sustainably, there is a balance between absorption and emissions and the net impact is neutral. If areas of sustainable forests increase, the net effect is to reduce greenhouse concentrations and mitigate climate change.

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OUR PEOPLE

15% of our senior managers are female, up from 14% senior managers in 2016.

83%

47%

NEW ZEALAND

UNDER 30 YEARS OLD

SALARIED 40%

WAGED 60%

FEMALE EMPLOYEES

% OF TOTAL EMPLOYEES

AUSTRALIA

30 TO 50 YEARS OLD

CHINA, HONG KONG, MALAYSIA

OVER 50 YEARS OLD

WHERE OUR PEOPLE ARE LOCATED:

AGE PROFILE 2017:

Our people are what differentiate us from our competitors – they bring their great thinking, judgement and commitment to work every day. When our people grow, our business grows. Together, we work to find the right support for the individual and the sustained success of our business.

NEW GRADUATES AND APPRENTICES

PERMANENT NEW STARTERS

VOLUNTARY TURNOVER

PARTICIPATION RATE

ENGAGEMENT RATE

23

47%

IN 2017:

1ST ENGAGEMENT SURVEY

THREE FOCUS AREAS:

- Leadership and communication.

- Processes and systems.

- Site-level engagement action plans.

In 2017, we undertook out first company-wide engagement survey.O

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This training has truly changed people’s lives. Many of them started with no qualifications, and we are proud to give them the opportunity to study through Oji Fibre Solutions.

INVESTING IN OUR PEOPLE’S GROWTH

Our Packaging NZ Specialty Boards management team in Hamilton invests a lot of energy and passion into training and developing their people.

Workplace training includes NZ Qualification Authority (NZQA) programmes in literacy and numeracy, as well as modules on industry knowledge, Trade Certifications and Health & Safety levels 1-4.

On Monday 22 May 2017, more than 20 people from Specialty Boards graduated from a 16-week literacy training programme, which covered how to improve communication, workplace values and root cause analysis. The graduation included a special lunch and presentations led by the graduates.

TONY ANTONIADISSPECIALTY BOARDS FACILITY MANAGER

I’m loving the course, and I look forward to every Wednesday. It has given me a big confidence boost, talking to my team-mates, helping me bring up any issues that need to be brought up. I might not have reported some health and safety stuff in the past, but am now confident enough to complete health and safety event reports.

BRIDGING THE GAP

In 2017, as a commitment to our people’s development, we began a 20-week Bridging Programme across Packaging NZ.

The first Bridging Programme was run at our Packaging NZ Speciality Boards facility in Hamilton in 2016. As a result of the programme’s success, and after further improvements to the programme’s design, it was introduced at our Packaging NZ Northern, Central and Southern facilities in Auckland, Levin and Christchurch.

The programme has been tailored to the specific needs of each packaging facility, so all the participants can attain the skills and knowledge required to effectively progress onto earning Competenz Level 2 or 3 Certificate in General Manufacturing. These qualifications provide elements of health and safety, quality and productivity improvement in relation to the packaging industry.

Education Unlimited tutors visit the sites weekly to work with the participants, completing a module each session. The tutors work closely with each participant to ensure everyone in the programme is progressing at the same pace. The course will run until February 2018, at which point the participants will have the experience, knowledge and skills they need to be successful in higher Competenz qualifications.

CHARLEY MACDONALDLEVIN BRIDGING PROGRAMME PARTICIPANT

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The success of our customers, the standard of our products and the shape of the future

depend on our ability to innovate.

GROWING INNOVATION

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OUR PRODUCTSMost fibre-based packaging contains both virgin wood and recycled fibres in different proportions.

COMPLEMENTARY FIBRES

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

Virgin wood fibres are important where high humidity is present, where high strength is needed or where appearance and print quality are important. Our ECOKRAFT™ range of kraft-top liners made at Kinleith Mill is an example of a hybrid combination of virgin wood fibre on the surface for colour and consistency and recovered fibre as the balance material.

A product made with recovered fibre may not necessarily be environmentally superior to one made with responsible virgin wood fibre. There are good reasons to use at least a proportion of virgin wood fibre in many papers; for example, if packaging fails, then any environmental gains achieved through using recycled fibre can be lost through spoilage of the packaged product.

Is 100% recycled fibre-based packaging suitable for direct food contact?

Yes; 100% recycled fibre-based packaging can be suitable for direct food contact, subject to appropriate controls and testing. This type of packaging is currently used in a number of direct-contact applications by consumer product companies.

COMMON QUESTION

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TRANSFORMING WASTE INTO USABLE PRODUCTS

The collection of recovered fibre from Oji Fibre Solutions’ sites, from other businesses and from households throughout New Zealand is handled through our recycling operation – Fullcircle.

In 2017, Fullcircle collected 299,403 tonnes of waste cardboard and paper, 205,605 tonnes (69%) of which was processed into paper products at our Penrose and Kinleith Mills and then either sold or further processed into fibre-based packaging solutions at our packaging sites in New Zealand and Australia.

We operate New Zealand’s largest paper

recycling business FULLCIRCLE

Did you know? Paper and cardboard can be recycled many times (typically estimated at between five and eight cycles), after which the fibres ‘wear out’.

Did you know? New (virgin) wood fibres need to be introduced into the paper-making process to make up for permanent removals and maintain the supply and performance of the finished products.

FULLCIRCLE

Nationwide in New Zealand from Auckland to Invercargill.

Recovered fibre collected by Fullcircle in 2017.

Recovered fibre utilised by our Kinleith and Penrose Mills in 2017.

In partnership with Wellington City Council and Dunedin Regional Council.

299,403

BALING PLANTS

MATERIALS RECOVERY FACILITIES

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Partnering with Oji Fibre Solutions, we undertook a review of all our waste streams, and with their experience, we soon had a new comprehensive recycling and waste solution. Recycling and waste are now cost neutral for us, and we are thriving with increased levels of service, fewer bins (equals more space!) and a lot of feel-good for our efforts. Thanks Fullcircle, nice one!GARY MCDONALDLEIGHTONS

What can be collected?

Fullcircle’s main focus is on cardboard and paper recycling, but depending on where you are located, and the market for different products we may be able to offer you a much broader range of recycling services. These services range from: secure document destruction, kerbside collections, plastic, aluminium and steel container recycling to plastic film and shrinkwrap recycling. We can also manage your residual waste disposal needs.

What happens to my recycled product?

In 2017, 69% of the paper and cardboard collected by Fullcircle was recycled at our own Oji Fibre Solutions paper mills within New Zealand. Each year, these mills process over 205,000 tonnes of used cardboard and paper and turn it back into new packaging-grade materials.

The balance of the recovered paper and other recyclables (plastic film and shrinkwrap, plastic containers, steel and aluminium cans) are sold to local re-manufacturers or international buyers.

Are there different types of paper?

There are many different types of cardboard and paper used in New Zealand. The type determines how valuable it is and whether it can be recycled here in New Zealand. Whether the material you have is old cardboard boxes, old newspapers, used office paper, a collection of old books or magazines or a bit of everything, we would like to discuss how we can assist you with your recycling efforts.

There are a few types of paper that can not be recycled in New Zealand. In most cases, they can be recycled somewhere. We sell to markets throughout the world. When the markets exist we find them and arrange for the paper to be shipped.

Are some cardboards not recyclable in New Zealand?

In general, the majority of cardboard collected in New Zealand can be recycled in New Zealand. Cardboard that is contaminated, soiled or that has water resistant waxes and PE or other coatings is not recyclable in New Zealand.

How are the recyclables collected?

In most cases, Fullcircle will arrange for a purpose built recyclables collection vehicle to visit your premises. The type and amount of material you have available for recycling will determine the optimal solution for both you and us.

The most common collection vehicles used by Fullcircle are front-loading and rear-loading trucks. These safely lift wheelie bins and large metal cages carrying paper, cardboard, film and other recyclables. To see the range of equipment options available and learn more about which of these might best suit your requirements, please refer to www.ojifs.com/fullcircle

ANSWERS TO KEY QUESTIONS

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IMPROVING THE EFFICIENCY OF OUR CONTAINER UTILISATION

Tasman Mill has been innovative in improving the efficiency of our container utilisation.

CHALLENGES The concept of a 10-bale unit has been with us for many years, but always had challenges. Not all customers would be able to receive 10-bale units, which meant that not all pulp production could switch to the new 10-bale unit, creating operational and logistical hurdles.

LAUNCHING THE PROJECT The pulp team initiated the project with discussions with key customers. Some customers were very interested, identifying benefits in fewer containers to transport and devanning, savings in onshore freight cost and less administration around customs clearance. A cross-functional team was established to develop robust and safe systems to enable the Tasman Mill to manufacture 10-bale units. The team involved representatives from pulp team, Tasman Pulp Drying & Warehouse Operations, Tasman Engineering, Lodestar, Procurement and Information Technology.

THE TRIAL Trials were conducted looking at feasibility, clearance testing and wire optimisation. These trials allowed the team to monitor and develop solutions to any issues which arose, ensure safe operations continued, develop warehouse stack configurations to ensure safe storage and identify any implications to warehouse capacity. In addition, the trial enhanced knowledge and capability for the team to advise and assist customers in regards to vehicle cameras to improve driver visibility and pulp handling as the 10-bale units are both bigger and heavier, as well as storage.

In early 2018, the Tasman Mill successfully commissioned its two production lines producing 10-bale units offering our customers a choice of size.

A cross-functional team has now been formed to review the capability of manufacturing 10-bale units at the Kinleith Mill.

WHY 10-BALE UNITS?

THE 10-BALE UNIT PROVIDES CUSTOMERS MORE PULP PER 20FT CONTAINER AND GREATER EFFICIENCY THROUGH THE SUPPLY CHAIN.When shipping in containers, we will still ship 10 units per 20ft container, but instead of shipping 80 bales (10 x 8-bale units) under the current configuration, we can ship 100 bales (10 x 10-bale units), so an additional 20 bales can be shipped per container.

Oji Fibre Solutions is pleased to offer our customers a choice between 8-bale units and 10-bale units for our pulp products manufactured at the Tasman Mill. Pulp units can now be delivered in units of 8x250 kg bales or 10x250 kg bales.

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OJI FIBRE SOLUTIONS

2015

OJI FIBRE SOLUTIONS

2016

OJI FIBRE SOLUTIONS

2017

KINLEITH MILL 2017

TASMAN MILL 2017

PENROSE MILL 2017

PACKAGING NZ

2017

PACKAGING AUS 2017

UNITS ANNUAL TOTAL

OUTPUTS1

Market pulp and containerboard products tonne 940,204 912,074 928,664 562,560 281,960 84,144 0 0

Fibre-based packaging products tonne 175,293 182,753 187,543 0 0 0 127,537 60,006

Chemicals and by-products2 tonne 35,911 35,326 35,786 19,437 16,349 0 0 0

Total outputs1 tonne 1,151,408 1,130,153 1,151,993 581,997 298,309 84,144 127,537 60,006

RAW MATERIALS

Fibre inputs

Virgin wood (logs and chips) tonne 3,521,473 3,464,744 3,563,252 2,215,078 1,348,174 0 0 0

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

Recovered fibre tonne 209,844 203,563 205,605 102,284 0 103,321 0 0

Paper, containerboard, wrapping, cores tonne 195,660 201,400 204,205 2,058 0 221 136,712 65,214

Total fibre tonne 3,936,515 3,880,266 3,981,120 2,327,478 1,348,174 103,542 136,712 65,214

Other significant inputs (approximate)3 tonne 118,453 114,301 114,609 59,719 43,792 708 8,993 1,397

ENERGY CONSUMPTION

Direct sources

Biomass: kraft black liquor, wood residues

GJ 21,431,008 21,070,039 21,088,935 13,712,753 7,376,182 0 0 0

Fossil fuels4: natural gas, waste oil fuel, fuel oil, coal, diesel, petrol, LPG

GJ 3,561,501 4,205,551 4,646,002 3,100,517 903,794 476,017 105,980 59,694

Indirect sources (purchased)

Electricity GJ 1,861,902 1,748,706 1,587,752 1,049,120 317,417 146,274 48,585 26,356

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

Geothermal steam GJ 1,408,426 1,591,588 2,597,324 0 1,734,418 622,291 154,565 86,050

Total energy consumption GJ 28,549,907 28,615,884 29,920,013 17,862,390 10,331,811 1,244,582 309,130 172,100

Electricity generation (fuels included above) GJ 1,284,089 1,217,413 358,429 255,313 103,116 0 0 0

WATER WITHDRAWAL

Municipal supply Ml 370 377 345 0 43 221 61 20

Surface water Ml 43,727 44,086 41,995 21,058 20,937 0 0 0

Groundwater Ml 10,772 10,914 11,764 11,228 0 536 0 0

Total withdrawal Ml 54,869 55,376 54,104 32,286 20,980 757 61 20

EMISSIONS TO AIR

Scope 1 (direct) emissions (CO2-e)5 tonne 220,067 257,932 279,308 183,708 59,734 25,750 6,983 3,133

Scope 2 (indirect) emissions (CO2-e) tonne 91,172 65,992 56,124 24,854 20,042 3,465 1,151 6,612

Total Scope 1 and 2 emissions (CO2-e)5 tonne 311,239 323,924 335,432 208,562 79,776 29,215 8,134 9,745

Biomass CO2 emissions6 tonne 2,011,646 1,883,750 1,884,678 1,215,366 669,312 0 0 0

WASTE7

To landfill (approximate) dry tonne

39,507 40,507 42,103 23,419 7,223 9,709 1,510 242

To recycle dry tonne

26,900 30,225 29,317 808 330 0 20,334 7,845

To compost/vermicompost dry tonne

19,448 21,075 19,925 12,277 7,019 629 0 0

Hazardous waste (incl. EPA, Victoria) tonne 76 339 195 129 13 0 0 53

DISCHARGE TO WATER

Volume9 Ml 55,722 56,778 57,322 35,550 21,485 287 N/A N/A

Treatment

1° & 2° 1° & 2° N/A Municipal treatment

Municipal treatment

Discharge to

Waikato River

Tarawera River

Municipal sewer

Municipal sewer

Municipal sewer

Total Suspended Solids (TSS)8 tonne 1,249 1,064 9810 N/A N/A

Biochemical Oxygen Demand (BOD)8 tonne 674 696 83110 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 Outputs are gross; i.e. includes internal transfers

between sites.2 Chemicals include: liquid chlorine, sodium

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

3 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.4 Direct emissions from on-site stationary and mobile

(vehicular) combustion of fossil fuels.5 Includes CH4 and N2O emissions from combustion

of biomass.6 Biomass-derived CO2 is reported separately

for information only, in accordance with the GHG Protocol.

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

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

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

10 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.

OJI FIBRE SOLUTIONS DATA:

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

SCOPEThis report covers the calendar year 2017 and includes environmental performance data for the manufacturing operations of Oji Fibre Solutions. Manufacturing operations are defined as Kinleith Mill, Tasman Mill, Penrose Mill, Packaging Australia (AUS) and Packaging New Zealand (NZ).

Environmental performance data is not presented for the service-focused sectors; Corporate Offices, Fullcircle and Lodestar; the newly opened Yatala facility in Queensland, Australia or the newly purchased Oji Cardboard Carton Solutions, Melbourne, Australia.

People data covers the service-focused sectors and all manufacturing operations including the newly opened Yatala facility in Queensland, Australia, the newly purchased Oji Cardboard Carton Solutions, Melbourne, Australia.

Safety data covers the service-focused sectors and all manufacturing operations excluding the newly purchased Oji Cardboard Carton Solutions, Melbourne, Australia.

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

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

301-1 Materials used by weight or volume302-1 Energy consumption within the organisation303-1 Water withdrawal by source305-1 Direct (Scope 1) GHG emissions305-2 Energy indirect (Scope 2) GHG emissions305-4 GHG emission intensity306-1 Water discharge by quality and destination306-2 Waste by type and disposal method307-1 Non-compliance with environmental laws and regulations401-1 New employee hires and turnover405-1 Diversity of governance bodies and employees

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

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

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

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DISCLAIMER

This 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.

CONTACTFor more information or feedback, please email: chloe.church@ojifs.com

Oji Fibre Solutions Private Bag 92004, Victoria Street West Auckland 1142, New Zealand

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