Welkom NEK 23 september 2003 1

• Kappa Packaging • Kappa Turnhout • Is België anders? • Kenmerken van veranderingen 2

Kappa Packaging

Profile Kappa Packaging n Integrated producer with paper and board and packaging operations n Paper and board operations > 15 mills producing kraftliner, testliner, fluting and solid board n Packaging operations > 93 plants providing pan European packaging supply to customers with both corrugated and solid board packaging solutions 4

Extensive pan European presence Corrugated packaging Solid board packaging Kraftliner 5 x Testliner/Recycled fluting Semi-chemical fluting Solid board Canary Islands 5

Scope for further consolidation Packaging Paper and Board Kappa Packaging Jefferson Smurfit SCA Mondi Europe Saica DS Smith OTOR International Paper ktonnes Source: Kappa Packaging Estimates 6

Sales and EBITDA performance Kappa Packaging 7

Stable and growing markets (x mln m 2) Since 1990, corrugated packaging volumes have grown by 3. 7% on average per annum 40, 000 35, 000 30, 000 25, 000 20, 000 Others E-Europe (excl. Russia) Others W-Europe Spain 15, 000 10, 000 Great Britain Italy France 5, 000 Germany 0 1991 Source: Fefco 2002 8 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Lowest cost of ownership Distribution Manufacturing Unpacking User chain Disposal Production chain Collection Supply Packaging 10 Paper

Two segments with different drivers Paper and Board Packaging n Commodity products n Unique packaging solutions n Raw material costs n Lowest cost in the chain n Capital intensive n Hassle-free service n Asset utilisation Lowest cost producer wins 11 Customer-focused wins

Paper and Board 12

Packaging 13

Welkom bij Kappa Turnhout n. v. 14

Onze organisatie n Algemene directie Jan Gramsma General Manager Greet Van Doninck Management Assistant Diane Houtmeyers SHEQ-manager Erik De Kort Sales & Marketing 15 Dirk Van Akelyen Production & Logistiek & Purchase Peter Nackaerts Finance & HRM & ICT

Onze markt 16

eindsegmentatie 17

modellengamma 18

Onze fabriek 19

Onze diensten Als u dat wilt kunnen wij u helpen uw verpakkings-proces door te lichten en wellicht te verbeteren: - Process audits, monitoring van inpak, savings, specifieke oplossingen - Benchmark met andere klanten (na wederzijdse toestemming) - Huur, lease of koop Kappa verpakkingslijnen - Probleemoplossing, optimalisering van verpakkingsproces - Logistieke analyses, pallet optimalisatie - Performance packaging - Business transfer, coördinatie en follow-up van opstartorders 20

Lowest cost of ownership Distribution Manufacturing Unpacking User chain Disposal Production chain Collection Supply Packaging 21 Paper

Functionality Plot: Focus on the right solution area Consumer appeal & shelf performance In-store Cost & performance 22 Direct Costs material & packing Logistic costs & performance

Kappa decision making support Plotting packaging functionality / demand Consumer appeal & shelf performance Direct Costs material & packing logistic cost & performance In-store costs & performance 23

Supply Costing: Supply co-operation impacts costs Packing Internal Warehouse/ Machine specs transport Inventory Transport Customer Internal Warehouse/ transport Kappa Inventory n Cost Drivers, influenced by Customer/Kappa Packaging co-operation > Order frequency / Production batch sizes > Minimum/Maximum stock agreements > Packing specs > Product variety (level of standardisation) > Production complexity (routing, tools) 24

25

Data input: Kappa Packaging and The Customer. . . 26

customization of the chain, adding modules…. 27

Specific customer data input…. 28

Activity based costing of improvement scenarios. . . 29

Cape Pack pallet optimisation 30

Cape Pack output 31

32

33

Horizontale samenwerking leverancier Verkoop Distributie Customer service Customer support Financiën IT Onderzoek & ontwikkeling Senior management klant Inkoop Opslag Productie Keten beheer Financiën IT Onderzoek & ontwikkeling Senior management

Waarom willen wij dit voor u kunnen doen? 36

Levels of economic development TODAY 2010 Level 1 Level 4 economic take-off economic re-invention USA India China Indonesia Philippines Japan West Europe Singapore Brazil Russia India China Indonesia Philippines USA Malaysia Argentina Centr. Europe Chili Japan West Europe Singapore Middle East Level 2 economic development 37 Russia Brazil Malaysia Argentina Centr. Europe Chili Level 3 economic consolidation

Packaging industry Today - 2010 Level 1 Level 4 economic take-off economic re-invention Capacity launch Capacity increase • availability • commodity • price • service • mass production • value for money • flexibility • sophisticated distribution • customization • innovation • specialization • value Capacity consolidation/ decrease • variety • value for money • convenience • segmentation • innovation • niche development Capacity diversification Level 2 economic development 38 Level 3 economic consolidation

Packaging industry Today - 2010 Level 1 Level 4 economic take-off economic re-invention • flexibility Capacity USA • sophisticated distribution consolidation/ • customization Japan • innovation decrease • specialization West Europe • value • availability • commodity • price Capacity launch Singapore India China Capacity increase • price • service • mass Indonesia production • value Philippines for money Level 2 economic development 39 Russia Brazil • variety • value for money • convenience • segmentation • innovation Middle East • niche development Malaysia Argentina Centr. Europe Chili Capacity diversification Level 3 economic consolidation

Snel & Eenvoudig, de noodzaak n Golfkarton is voor zijn gebruikers lang een veelal oninteressante commodity geweest n Low tech, low interest = stabiele marges = gevaar voor commerciële luiheid, gebrek aan innovatie in productie en routinematig managen n Dat langdurige verblijf in de “comfort zone” is voorbij en zal niet meer terugkeren n De Europese industrie heeft sinds de jaren ’ 50 een tweede Industriële Revolutie doorgemaakt: > Verkoop (reclame / marketing / mass individualisation) > Productie (lean production, zero defect) > ICT (PC / ERP / Internet) > Logistiek (JIT / pull logistiek) > Inkoop (Lopez / e-auctions) > Personeel (empowerment / career management) > Financieel (shareholdervalue / consolidation) 40

Snel & Eenvoudig, de noodzaak n De Europese markt is daardoor gewend geraakt aan continue kwaliteit in product en service, is ketengericht gaan denken en wil steeds sneller zakendoen, zonder gezeur en ballast. n Hierdoor, en versterkt door de opkomst van achtereenvolgens Oost- Europa, China, India & Viëtnam, worden we nu gedwongen te concurreren tegen kwalitatief goede aanbieders met lage prijzen. n De enige wapens daartegen zijn een grotere individuele creativiteit, een grotere collectieve effectiviteit en rigoureuze kostenbeheersing. n We moeten daarom zoeken naar doorbraken op commercieel-, product-, productie- en logistiek gebied die deze wensen beter dan vandaag beantwoorden. (gestructureerde verkoop; ABC-calculatie; Kappa verpakkingen databank; DY inlinerconcept; Machine Systems Benelux) n Snelheid, geen gezeur en “beste koop” zijn veruit de belangrijkste krachten in onze markt en vormen daarom onze koers voor een goede toekomst. 41

De basisgedachter ons bedrijf > Kappa Turnhout is de grootste golfkartonfabriek van de Benelux, die als all round producent er naar streeft: > Zo efficiënt mogelijk goede dozen te produceren > Dat te doen in een hygiënische en veilige werkomgeving > Te voldoen aan uw uitgesproken en liefst ook onuitgesproken verwachtingen > Vrijwel alles in eigen beheer te doen om zo onze grootte te gebruiken om voor u flexibel te zijn > Als u dat wilt, u kan ondersteunen met Kappa verpakkingsmachines, doos- en doosgebruiksanalyses en logistieke ondersteuning & advies > Bovenal mensen centraal plaatst en vanuit die denkwijze bijvoorbeeld diegenen waar u zaken mee doet alle informatie en beslissingsbevoegdheden geeft, zodat u makkelijk en efficiënt zaken kunt doen > Er, alles samenvattend, naar streeft het inkopen van karton voor u als klant net even eenvoudiger en sneller te maken dan u van onze branche gewend bent 42

Wat kunnen wij meer voor u doen om u tot een tevreden klant te maken en te houden? 43

Is België anders dan andere landen? 44

Human Mind Programmed by Heredity and Experience in 3 Levels Inherited learned Individual Culture Collective by group Learned Inherited Common to all mankind “Group”: E. G. nation, profession, organization, family

Culture Symbols Heroes Rituals Values

Values n The culture of a group is manifested, among other things, on the distribution of values within the group n Broad preferences for one state of affairs over others to which strong emotions are attached

The 4 -D Model n Value differences between countries can be explained by four “dimensions of national culture” > Power Distance (PDI) > Individualism (IDV) > Masculinity (MAS) > Uncertainty Avoidance (UAI)

Power Distance The extent to which the less powerful members of institutions and organisations accept that power is distributed unequally

Which Country Culture Scores Highest on Power Distance? BELGIUM JAPAN USA GERMANY FRANCE

Which Country Culture Scores Highest on Power Distance? BELGIUM JAPAN 65 54 USA 40 GERMANY 35 FRANCE 68

Which Country Culture Scores Lowest on Power Distance? SWEDEN DENMARK NETHERLANDS UK NORWAY

Which Country Culture Scores Lowest on Power Distance? SWEDEN 31 DENMARK NETHERLANDS 18 38 UK 35 NORWAY 31

Uncertainty Avoidance The extent to which people feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid these

Which Country Culture Scores Lowest on Uncertainty Avoidance? UK DENMARK NORWAY NETHERLANDS USA

Which Country Culture Scores Lowest on Uncertainty Avoidance? UK DENMARK 35 23 NORWAY NETHERLANDS 50 53 USA 46

Which Country Culture Scores Highest on Uncertainty Avoidance? GERMANY BELGIUM FRANCE SPAIN SWEDEN

Which Country Culture Scores Highest on Uncertainty Avoidance? GERMANY BELGIUM 65 94 FRANCE 86 SPAIN 86 SWEDEN 29

De kenmerken van veranderingsprocessen 59

THE CHANGE HOUSE With Additional Rooms The contentment room The Sun lounge We are the best Let’s postpone it Why should we do it arrogance The denial room They are responsible Circumstances are responsible Fingerpointing Defensive behaviour Dungeon of denial 60 The renewal room Let’s do it together Let’s make it happen! High motivation and energy Taking responsibility The confusion room Which way is the best? Hire and fire! A new strategy every day Lots of uncoordinated initiatives Consultants Paralysis pit Wrong direction door

Signs of contentment What they say The Sun lounge • Let’s postpone it • We know what we’re doing • We achieve our targets • It it isn’t broke, don’t fix it • It will get better next month • Management have decided • We don’t have any major problems How they act • Ignore the outside world • Arrogant • Justify bad results • Don’t listen to customers • Don’t listen to own staff • No sense of urgency • Unaware of new threats • Want more money Wrong direction door Dungeon of denial 61 Paralysis pit

Signs of denial What they say The Sun lounge • It’s a general industry trend • What problem? • It’s not our fault • The budget was too ambitious • It’s a short time issue • It’s the recession • Corporate doesn’t understand • It will be ok next month • It can’t happen here • We’ve always done it this way • Our business is different • If it isn’t broken, don’t fix it Dungeon of denial 62 How they act • Defend the past • Defend the present • Agressive • Miss the message, but kill the messenger • Blame everything else • Blame everybode else • Minimise or trivialise the change • Not listening to own staff • Not listening to customers • Try to find competitors who’re doing worse Paralysis pit Wrong direction door

Signs of confusion What they say The Sun lounge • What are we doing? • What should we do? • How did we get into this mess? • Let’s hire some consultants • What are our competitors doing? • What have I done wrong? • We must do something now • I’ve been saying that for years • We’re trying to do too many things at once Dungeon of denial 63 How they act • Frustration • Anger • Insecurity, self-doubt • No sense of direction • Dependency on others (internal, external) • Slogan of the month • Set up numerous committees, task forces • Hire people from outside • Never complete anything Paralysis pit Wrong direction door

Signs of renewal What they say The Sun lounge • Let’s make it happen • Let’s do it together • This is a good place to work • Let’s tell everybode about this • This is our plan • It’s been tough, but we’ve made it • We’re doing well, but we could do better • We have to trust each other • We won’t do it if it doesn’t fit our strategy Dungeon of denial 64 How they act • Learning • Trust, delegation • Independence • Accepting risk • Flexibility, creativity • Trying new approaches • Enjoying themselves • Continually improve • Stay focussed • Set new targets • Don’t believe all their own publicity • Regularly review progress and process Paralysis pit Wrong direction door

Vriendelijk bedankt voor uw aandacht 65