REVIEW OF PETCOACTIVITIES2016

FUTUREFOCUS

REVIEWOF PETCOACTIVITIES2016

CONTENTS

1

3 INTRODUCTION

10 CHAIR AND CEO REVIEW, A Significant Year

IntroductionThe Top Accomplishments of 2016

14 ABOUT PETCO

18 END-USE MARKET DEVELOPMENT

Bottle-2-Fibre (B2F)Bottle-2-Bottle (B2B)Other end-use applications

20 PETCO PROJECTS

1 Commercial Scale Recycling Projects2 Collection and Training Projects, and Visible Recycling

a PET infrastructure and equipment provisionb Collector training and developmentc Education and awarenessd Special projects and joint venturese Fostering government partnershipsf Building the recycling network

3 Consumer Education and Awareness

32 FINANCIAL INFORMATION HIGHLIGHTS

34 WHERE TO FROM HERE?The outlook for 2017 and beyond

It's been 12 years since the incorporationof PETCO and we have gained manyinsights during this time.

Over the period and in celebration, we againhonour the people, the companies and theorganisations that have made extraordinarycontributions to the recycling of post-consumerPET in South Africa. More than anything, theymake recycling a joy that is shared by moreand more people, because it is the right thingto do and because it is making a difference.

But so many of humanity's most acute problems- from economic inequality to climate change towater scarcity - seem to be getting worse insteadof better. You might be questioning the healthof our organisations, social systems, and businessmodels. With good reason: companies arecurrently deeply rooted in a linear approach togrowth - make, use, and dispose.

But what if we had a new way to design products,services, and businesses that were good forpeople, the planet, and business? That's theradical promise of the Circular Economy: movingfrom our traditional take-make-dispose economy,to one that has a closed loop, where materials,nutrients, and data are continuously repurposed,inspiring a shift to a new model: an alternative,restorative, and regenerative approach tobusiness, one that creates new value and deliverslong-term economic, social and ecologicalprosperity. A new mind-set for business isemerging. It's worth billions of Rands, will driveinnovation in tomorrow's companies, and reshapeevery part of our lives.

We have been inspired by the report The NewPlastics Economy: Rethinking the future ofplastics, launched at the World EconomicForum Annual Meeting 2016 in Davos-Klosters,which set out a vision for a new and effectiveplastics packaging system, guided by circulareconomy principles, and fit for the long term.It's compelling and provided the impetus forthe Ellen MacArthur Foundation to set up anambitious three-year initiative, the New PlasticsEconomy, to act on the report's insights andturn the vision into reality.

And it's made a strong start. Leading playersfrom the plastic packaging supply chain havecommitted to it, alongside major capital cities,philanthropists, policy-makers and academics.The momentum gathered is indicative of thecollaborative approach that builds bridgesalong value chains, across silos, and betweenthe private and public sectors to initiate agenuine system shift. The interest generatedechoes a growing consensus on the needto phase out the negative impacts associatedwith today's patterns of use by notablyredesigning certain materials andrethinking business models.

Transitioning the Circular Economy into themainstream will be one of the biggestcreative challenges of our time. Now morethan ever, we need to explore new ways tocreate sustainable, resilient, long-lasting value

- redesigning the world around us.

We need to be ready to roll up our sleevesand get started.

3

TRANSITIONINGTO A CIRCULARECONOMYA new mind-set for business is emerging - it's worth billions of Rands, will drive innovationin tomorrow's companies, and reshape every part of our lives.

In the traditional waste management system,materials move through a linear “make-use-dispose” process where they are manu-factured from raw resources, consumedand ultimately sent to landfill. This modelof consumption has become part of ourculture. It has resulted in increases in absolutegreenhouse gas emissions as the amountof waste disposed in landfills has increased.

A circular economy aims to eliminatewaste, not just from recycling processes,but throughout the lifecycles of productsand packaging. A circular economy aimsto maximise value and eliminate waste by

improving the design of materials, products,and business models.

A circular economy goes beyond recycling.The goal is not just to design for betterend-of-life recovery, but to minimise theuse of raw materials and energy througha restorative system.

In a circular economy, the value of productsand materials is maintained for as long aspossible. Waste is minimised and resourcesare kept within the economy when a producthas reached the end of its life, to be usedagain to create further value.

4

What is aCircular Economy?

FROM A LINEAR TO A CIRCULAR ECONOMY

LINEARECONOMY

REUSEECONOMY

CIRCULARECONOMY

In a linear economy, raw materials areextracted from the earth, used and discarded:‘take-make-waste’. At best, this economy leadsto the relative decoupling of economic growthfrom the use of natural resources.

In the reuse economy, many non-recyclablematerials are used again (cascading,repair/maintenance, remanufacturing,recycling). At best, this reuse economyleads in part to an absolute decoupling ofeconomic growth from the use of naturalresources and from emissions: the demandfor natural resources and the emissionsdecrease as the economy grows.

The ideal picture is a circular economy inwhich raw materials are never depleted.The economy can be structured so thatthere is a positive coupling between economicgrowth and the growth of natural resources(’negative’ emissions/ positive footprints).In a circular economy, value chains willbe organised differently.

Adapted from: https://www.government.nl/topics/circular-economy/contents/from-a-linear-to-a-circular-economy'

Recyc

lin

g

Production

Rec

yclin

g

Non-recyclable waste

Use

Production

Raw Materials Raw Materials

Production

Use

Non-recyclable waste

Raw Materials

Use

5

“Embracing a circular economy, a system in which products are neverdiscarded, but reused, recycled and reintroduced into new products affordsa viable opportunity to drive performance, innovation and competitiveness,and stimulate economic growth and development in our country. Takingaction to create a supportive business environment for companies that userecovered resources will help drive additional recycling, create more jobs,reduce greenhouse gases and extend the life of existing landfills. It's anexciting prospect. In short, the circular economy presents our country withplenty of economic opportunities for existing businesses, for women, fornewcomers, start-ups and for science”.

Dr Casper DurandtChairman PETCO and Franchise Technical Director,Coca-Cola South East Africa.

A CIRCULAR ECONOMY

Adapted from: https://www.ontario.ca/page/strategy-waste-free-ontario-building-circular-economy

Government leadership,producer responsibility,

and consumer educationand awareness will enablemarket mechanisms that

drive higher resourceproductivity, innovationand economic growth

CIRCULARECONOMY

DESIGNRECYCLE

PRODUCEREUSE/REPAIR

CONSUMERUSE DISTRIBUTE

FEWER RAW MATERIALSARE USED

Improved, cost-efficient collectionand treatment systems will leadto fewer and fewer materialsending up in landfill and supportthe economics of circular design.

Products and packaging are designedto last longer and be more durable,using more sustainable materialsthat can be easily recycled atend-of-life.

Producers are fullyresponsible for recoveringmaterials from their productsand packaging throughouttheir lifecycle.

Businesses collaborate andcoordinate across sectors toreduce greenhouse gasproduction and fossil fuel use.

There are many ways consumerscan contribute to a circulareconomy, like making greenerbuying choices, sharing assets(e.g. cars, tools) and repairingthem or offering them to othersfor reuse and refurbishing.

Retailers offer products that canbe easily reused and refurbished,offer end-of-life take back ormaintenance and repair services,and support producers in providingeducation and awareness toconsumers.

Achieving, or even striving for, Goal 12 willrequire nothing less than a complete overhaulof our linear, take-make-waste patterns ofproduction and consumption in favour of acircular system - a restorative or regenerativesystem in which all products are designed andmarketed with reuse and recycling in mind -informed by a radical shift in business modelsand policies around the world.

Aside from the environmental benefits of circularmodels - such as a significant drop in use ofvirgin materials, reductions in material wasteas products are designed to last, and utilisationof manufacturing by-products and excessmaterials previously considered waste streams

- more and more studies point to the undeniablebusiness case for redesigning our entireeconomy. For the packaging industry, the2030 goals are key drivers where sustainabilityis woven into the foundational ethos, thebottom line and future growth goals todrive business forward.

While it will take more than siloed efforts tobring about the radical systemic shift that'sneeded to achieve the UN's goals, manychallenges must be overcome for widespreadadoption. But as solutions continue to emergeand circular economic business models becomemore prevalent, we see it influencing consumersto be more conscious about their consumption,which in turn will drive more companies to adoptthe principles … enabling the complete systemicshift needed to achieve sustainable development.

But how do you convince individuals that these17 formidable goals aren't just the business of

presidents and NGOs? How do you demonstratethat one person can make a vital contributionto the gravest challenge of our time?

ONE FOR ALL is an answer to this challenge,giving everyone an entry point for helping toachieve the Sustainable Development Goals.The campaign is based on three central ideas:

1 Bring it Down to Size:The UN's complex agenda needs to bebroken down in order to make it accessibleand inclusive for everyone - a world withno borders, no boundaries, no divisions.From 17 goals to three simple words:ONE FOR ALL.

2 Every Action Counts:It's easy to see your own choices asinsignificant compared to the amazing scopeof the problems afflicting the world.They're not. In fact, the opposite is true.The only way to tackle these issues is ifindividuals actually commit to action.

3 Just Choose One:The UN is calling on everyone to pledgeto do just one thing that advances a singleSustainable Development Goal. No individualcan end hunger or halt global warming.But when the world's seven billion peopleact together towards shared goals,extraordinary things can and will happen.Each individual just has to find and committo their one for all.

The task of bettering our world is bigger thanany one of us. But it's smaller than all of us.

6

ONE FOR ALLAlways Wanted to Save theWorld? Here's Your Chance

The United Nations' 2030 agenda for sustainable development includes 17 lofty-as-evergoals for tackling our most pressing social and environmental challenges - not the leastof which is Goal 12: Ensure sustainable consumption and production patterns.

There are 17 goals aimed at making the world a safer,healthier and more peaceful place for all of us.

Which one goal will you choose?

Do the 2030 Sustainable Development Goals(SDGs) have any impact on our work aspackaging professionals?

The answer is yes - and it's a renewedopportunity for the packaging industryto be part of the global solution.

Companies and packaging professionals arepoised to take the lead on sustainabledevelopment by focusing on a few key2030 SDG goals, including Goal 11, Goal 12,Goal 14 and Goal 17.

Goal 11 aims to “make cities inclusive, safe,resilient, and sustainable.” One of the keytargets specifies to “reduce the adverse percapita environmental impact of cities by payingspecial attention to air quality and municipaland other waste management.”

In a similar vein to urban waste managementchallenges, Goal 14 aims to “prevent andsignificantly reduce marine pollution of allkinds, in particular from land-based activities,including marine debris and nutrient pollution.”These two targets are directly tied to wastemanagement and the control of litter - taskswe sometimes view as municipal orgovernment responsibilities beyond thecontrol of industry. But we're seeing thetide turning as more and more packaging

professionals are improving the recoveryrates of their packaging.

Goal 12 speaks more intimately to theeveryday work of the packaging industry.Goal 12 aims to “ensure sustainableconsumption and production patterns” by

“encouraging industries, businesses andconsumers to recycle and reduce waste”and “supporting developing countries to movetowards more sustainable patterns ofconsumption by 2030.” The packagingindustry can encourage sustainable productionand consumption patterns by reducingunnecessary packaging and designing forsustainable end-of-life disposal options.This can take on a number of forms, rangingfrom designing for recycling to using widelyrecyclable materials, incorporating morerecycled content and encouraging packagingreuse or repurposing.

For the packaging industry, the 2030 SDGsmust be woven into the foundational ethos,the bottom line and future growth goals todrive business forward. No singular entity canenact these measures alone, and that bringsus to our last applicable goal: Goal 17, whichaims to revitalise the global partnership forsustainable development with collaborationfrom governments, civil society and the privatesector-packaging professionals included.

7

Why do the UN Sustainable Development Goals matter to us?

8

THE GLOBALGOALSFor Sustainable Development

2 3

NOPOVERTY

ZEROHUNGER

GOOD HEALTH& WELL-BEING

13 15

CLIMATEACTION

LIFE BELOWWATER

LIFE ONLAND

7 8

AFFORDABLE &CLEAN ENERGY

DECENT WORK &ECONOMIC GROWTH

INDUSTRY,INNOVATION &

INFRASTRUCTURE

1

9

14

Adapted for us from the 'Transforming our world: the 2030 Agenda for Sustainable Development’(http://www.un.org/sustainabledevelopment/).

9

4 5 6

QUALITYEDUCATION

GENDEREQUALITY

16 17

PEACE, JUSTICE& STRONG

INSTITUTIONS

PARTNERSHIPSFOR THEGOALS

CLEAN WATER &SANITATION

10 11 12

REDUCEDINEQUALITIES

SUSTAINABLECITIES &

COMMUNITIES

RESPONSIBLECONSUMPTION& PRODUCTION

2016 was a significant year for PETCO andPET plastic recycling.

For the second consecutive year, PETCOexceeded its recycling target with PET recyclingfigures continuing to grow despite challengingtrading conditions. PETCO's efforts over theyear led to a recycling rate of 55% of post-consumer bottle PET - with a total of 90 749tonnes of Polyethylene Terephthalate (PET)or 2 billion bottles being recycled. PETCOexceeded its target set for the year by 1%,made more noteworthy if we consider that theconsumption of total PET in South Africa grewby 15% year on year and that the world is stillrecovering from the economic recession.This effectively means that we are currentlyrecycling more than half of all post-consumerPET bottles in the market and more bottles arebeing recycled than those going into landfill.This is a substantial achievement in a relativelyshort space of time.

Despite the continued tough conditions ininternational markets, with global prices forpolyester staple fibre (PSF) remainingdepressed for most of 2016, fibre exportvolumes increased significantly during theyear, partly due to additional financial supportprovided by PETCO to the fibre export sector.According to official figures released by SARS,PSF exports increased from a total of 5 400tonnes in 2015, to more than 13 000 tonnesin 2016, an increase of approximately 140%.Through these targeted subsidies, PETCOhas managed to stimulate the export of fibreproduced in South Africa from bottles thatwould have ended up in our landfill sites.For the “rPET to fibre” partners, PETCO's supportwas the lifeline without which millions of bottleswould not have been collected, including thecoloured ones which are problematic.

In the food grade sector, sales of recycled resinremained buoyant for most of 2016, with thesector's share of the total volume of PETcollected for recycling increasing from22 000 tonnes, or 30% of total collectionvolume in 2015, to 34 000 tonnes, or 37%of total collections in 2016.

With regard to the development of new end-use markets for recycled PET, the year saw theintroduction of a new manufacturing processfor PET strapping made from recycled material.

A further development in 2016 was the renewedinterest on the part of a number of manufacturersin making plastic pallets solely or in part fromrecycled PET. We hope to actively collaboratewith these manufacturers to assist in both thefurther development of these products andin the development of local and internationalend-use markets.

Bottle-2-Bottle capacity, for carbonated softdrink grade approved Bottle-2-Bottle resin,represents the most sustainable use of theraw material by “closing the loop” wherethe recycled resin can be used repeatedly innew bottles. One of the highlights of the yearwas the official opening of the Mpact PolymersBottle-2-Bottle Plant by the Minister ofEnvironmental Affairs, Dr Edna Molewa, inMay 2016. This is the first Krones Coca-Colaapproved bottle grade PET recycling plant onthe continent of Africa. PETCO's contractedfinancial assistance, based on the volume ofbottles recycled, contributed to making thisproject possible, and PETCO's on-going supportwill assist in ensuring that this project does notfail, as other such initiatives have in the past.

From a legislation perspective, we expect thefinal Section 28 Notice from the Departmentof Environmental Affairs (DEA) calling forIndustry Waste Management Plans to be issuedin 2017. We see the Industry Waste ManagementPlan for Paper and Packaging as a naturalprogression in the strides that PETCO has madesince it was incorporated in 2004. However,up until now, producer responsibility has beenbased on voluntary agreements betweenPETCO and the PET industry and self-imposedrecycling targets. Statutory EPR for packagingcould mean the introduction of statutoryrecycling targets and a waste producerdefinition to tackle the problem of “free-riders”.

This effectively means that there could be aregulatory requirement for the waste from thepackaging sector to be diverted from landfill.This has far reaching implications for PETCO aswell as the wider paper and packaging industrythat will be required to submit plans. In turn, thiswill have an impact on consumers and societyat large. PETCO has been working closely withDEA and the packaging industry to ensure that

10

CHAIR ANDCEO REVIEWA Significant Year

the effect on all stakeholders is constructive.A carefully designed and implemented IndustryWaste Management Plan for Paper and Packagingcan have many positive impacts in terms ofincreased recycling and diversion rates, jobcreation, integration of the informal sector andminimal cost-implications for consumers.Packaging is a particularly sensitive sector,as it affects all 59 million South Africans.

Sustainability is an all-encompassing conduitto resource management for the shift toreducing the use of finite resources, preservingthe value of existing resources and creatingrenewable resources. In this regard, PETCOcompiled and released the Energy Recoverydiscussion document - the first of its kind inthe industry sector - that lays out the challengesas we see them in an effort to stimulate dialogueand direct action in this critical area.

2016 saw the use of rPET increase significantly.The pro-active, voluntary approach by somebrand owners of setting recycled contenttargets is an example of leading sustainablebusiness practice and encouraging a wideradoption of such practices. Although the realtipping point from a volume point of view isstill some way off, Coca-Cola approval forlocally produced rPET is a real milestone forthe PET industry and will herald the use ofgreater volumes. The availability of high quality,competitively priced rPET is in a large part asa result of years of effort from PETCO and theindustry to create a recycling supply chain thatcan feed the Extrupet and Mpact Polymersplants. Telling the story has proven criticalin soliciting the much-needed buy-in fromthe PET packaging sector. Lead times onexpanding facilities are significant, and plansto grow collection volumes can only materialiseif sufficient recycling capacities exist.

Converters and fillers introducing rPET intotheir bottle blowing experienced challenges,but these are being resolved. Weak pricedynamics for rPET in a low oil price environmentis also challenging. Government and industrymandates and incentives for the use of recycledcontent in packaging (and other applications)could drive further adoption. We have theinfrastructure in place and an innovativeindustry able to shift the established businessmodel to one that is circular rather than linear.

From an administrative perspective, the Boardof Directors made the decision to shift PETCOfrom being a private company with a not-for-profit mandate to a Not-for-Profit Companywith non-executive directors on 3-year terms.The shift to NPC status means that theopportunity exists for PETCO's mandate toexpand from the current focus on EPR, toinclude an additional mandate coveringEnterprise Development and a strategy hasbeen drafted to this effect. The Board was

also expanded to include thirteen non-executive directors, an additional bottler,an additional converter, new positions forthe collector and recycler sectors, and twopositions to be appointed to the board torepresent a relevant sector as identified fromtime to time. An application has been lodgedwith SARS for PBO (Public BenefitOrganisation) status.

Another important milestone was theappointment of a service provider to assistPETCO to develop our Theory of Change andMonitoring and Evaluation Framework, theimplementation of which is now underway.The use of robust M&E is recognised acrossmany sectors, particularly in the NGO/NPOspace where the performance and value ofsuch organisations may be more difficult tomeasure using standard commercial indicatorsapplicable to the private sector. The importanceof M&E has also been noted by DEA in thestrategic plans developed by them.

The African Marine Waste Network, anambitious international collaboration with theaim of developing a waste strategy for Africa,was launched in South Africa in 2016, withPETCO as a leading strategic partner. PETCOwill drive the communications and networkingcomponent of this strategy from our CapeTown offices.

PETCO's suite of communications tools wereexpanded with the launch of our new websiteafter months of hard work and preparation.Short video clips were produced of PETCO2016 Award winners; databases weresegregated and refined for more effective andtargeted communications with stakeholders.

During the year, PETCO continued to conducteducation and awareness programmes, activelyencouraging and contributing to the educationof learners through national schools recyclingcompetitions and schools collection projectsundertaken with our partners.

Through the many projects documented laterin this review, PETCO continues to supportsmall recycling businesses throughout thecountry, creating jobs and growing skills.

Going forward PETCO and its partners will workhard at growing collection volumes, settinghigher benchmarks for all stakeholders. Ourorganisation wishes to become the leader in

“design for recycling” governance, setting uprelevant marks of quality for all to adhere to.

Thanks and credit for funding PET recycling inSouth Africa must go to the organisations whopay the PET recycling fee on each and everytonne of resin that they purchase, plus the brandowners, raw materials producers and retailerswho support recycling with grants-in-aid.

11

1 PETCO's efforts over the year led to arecycling rate of 55% of post-consumerbottle PET - with a total of 90 749 tonnesof Polyethylene Terephthalate (PET) or2 billion bottles being recycled - some5.7 million bottles collected each and everyday. PETCO exceeded the target of 54%by 1% to achieve 55% despite toughtrading conditions.

2 Fibre export volumes increased significantlyduring the year, partly due to additionalfinancial support provided by PETCOto the fibre export sector.

3 Sales of recycled resin (rPET) remainedbuoyant for the majority of 2016, with thesector's share of the total volume of PETcollected for recycling increasing from22 000 tonnes to 34 000 tonnes in 2016.

4 The introduction of a manufacturing processfor PET strapping from recycled material,which is likely to be included in PETCOprojects with effect from 2017 onward.

5 Mpact Polymers' Bottle-2-Bottle Plant wasopened, which is the first Krones Coca-Colaapproved bottle grade PET recycling planton the continent of Africa. PETCO'scontracted financial assistance, based onthe volume of bottles recycled, contributedto making this project possible, andPETCO's on-going support will ensure thatthis project does not fail, where other suchinitiatives have globally.

6 PETCO contracted with seven recyclingpartners, who made payments to collectorsto the tune of R360 million and injectedR890 million into the downstreameconomy during the course of 2016.

7 PETCO training and enterprise developmentprojects included 19 workshops where atotal of 452 collectors and municipalemployees participated and gained aninsight into running successful SMME andCooperatives; PETCO collection projectssupported 17 projects with equipment andother infrastructure, enabling the doublingof collection capacity in some instances.

8 The African Marine Waste Network, anambitious international collaboration withthe aim of developing a waste strategy forAfrica, was launched in South Africa in 2016,with PETCO as a leading strategic partner.PETCO will be driving the communicationsand networking component of this strategyfrom the Cape Town offices.

9 A service provider was appointed todevelop robust Monitoring and Evaluation(M&E) indicators for PETCO.

10 A successful workshop was conducted withDEA in Pretoria to understand their areasof concerns regarding the recycling industry.Extensive interactions were also held withDEA regarding the scope of implementationrequirements of Industry WasteManagement Plans.

11 PETCO compiled and released a discussiondocument on Energy Recovery -representing the first of its kind that wehave seen in the PET industry sector.

12 PETCO CEO Cheri Scholtz participated inthe panel discussion at the Department ofEnvironmental Affairs 5th WasteManagement Khoro, where the theme was

“Promoting Innovation and UpscalingEnterprise Development: Exploring theTools of the Trade”, in eThekwini, KwaZulu-Natal. PETCO empowered 25 waste pickerswith trolleys and 100 bulk bags, andsponsored site visits for delegates to:

a Power Rush Recycling, where theproprietors have 67 staff, comprisingof 45% female and 75% youth.They further have over 150 informalcollectors for whom the buy-backoption is an economic lifeline; and

b Best 2 Recycle, a waste managementservices company that provides wastecollection and separation services.They service 60 000 households inthe Pinetown area, collecting glass,PET, cardboard, paper and steel.

12

In celebrating these remarkable results in driving post-consumer PET recycling,we can summarise the years' highlights as follows:

13 PETCO's website (www.petco.co.za) wasre-launched mid-way through the yearafter many months of hard work andpreparation. This was done in conjunctionwith a consolidation and substantialimprovement of our Stakeholder Databaseand communications tools.

14 Long-time PETCO recycling partnerExtrupet was awarded numerous accoladesduring the course of the year for theirPhoenixPET food grade recycled PETresin, which included the Judges Gold forSustainability at the IPSA Goldpack Awards,the Packaging Excellence Award and theSilver Award for Sustainability at theWorldStar Awards, and two Gold Awardsat the Afristar Awards (for Best in Packagingand Sustainability).

15 PETCO undertook and successfullycompleted a spatial mapping project ofall assets, training and collections projectsdistributed nationally across the country.

The PETCO Board of Directors continues toshow commitment and thanks are due to themfor their efforts and insight.

It is opportune to extend a very big thank youto Carene Mellor who left PETCO due to illhealth. We wish her a full recovery.To Clynt Levin for his commitment anddedication to PET recycling in South Africa -for always being available and for hisdedication to the cause.

David Drew and Chandru Wadhwani have beenelected to the PETCO Board representing theConverter and the Collector/ Recycler Sectorsrespectively.

PETCO enjoys Associate Membership of theEuropean Association of Plastics Recyclingand Recovery Organisations (EPRO) and ofthe Global Product Stewardship Council.

PETCO enjoys the support and collaborativeefforts of both Packaging SA (previouslyPACSA) and Plastics|SA.

So much already done, but still so muchmore to achieve. Providing a vision and animplementation plan for a more effectivesystem based on circular economy principlesin which plastics never become waste anda new plastics economy begins to developis our single-minded task going forward.We are excited to work alongside you.

Dr Casper DurandtCHAIRMAN PETCO

Cheri ScholtzCEO PETCO

13

“PETCO's achievement of collecting90 749 tonnes in 2016 was beyondremarkable. For those of us whohave long memories in this industry,it in extraordinary to have crossed the90 000 tonne mark so early on inPETCO's evolution. One further needsto consider what was the “lay of the land”at the beginning of 2016 when there wereonly hurdles and obstacles which hadmany of us believing that the collectionfigure for the year would have gonebackwards from the previous year."

Chandru WadhwaniJoint Managing Directorof Extrupet (Pty) Ltd.and PETCO board member.

Casper Durandt CHAIRCheri Scholtz CEO

14

ABOUTPETCOPETCO is the trading name of the PETRecycling Company NPC.

The Company was incorporated in 2004and since then it has emerged as a leaderin Extended Producer Responsibility (EPR).By imposing accountability over the entirelife cycle of PET products and packaging,companies that manufacture, import and/orsell PET products and packaging arefinancially and physically responsible forsuch products after their useful life.

PETCO works with manypartners including:

• Government:To build policy and implementationframeworks that support the concept ofExtended Producer Responsibility and growthe Green Economy.

• PET Industry:To harness knowledge and innovationleading to increased PET recycling efforts.

• Shareholder and Associate Members:To sustain PET collection interest andsupport PET recycling efforts therebyreducing volumes of PET in the waste stream.

• International Industry and Agencies:To collaborate on best practice withrespect to post-consumer PET recycling.

OUR JOURNEY THUS FAR

90 749 tonnes (55%) of post-consumer PET bottles recycled; 2 billion bottles recycled, despitetough trading conditions, creates 62 000 income opportunities for small and micro-collectors,changing their lives and those of their families in immeasurable ways.

74 360 tonnes (52%) of post-consumer PET bottles recycled; close the loop in the CSD B2Bsector; 1.7 billion bottles recycled creates income for an estimated 50 000 people and skillsdevelopment opportunities for many.

59 691 tonnes (48%) of post-consumer PET bottles recycled; PETCO shifts from a partner-basedto a project-based model and hosts a successful international colloquium. PETCO is awarded jointwinner of the business award in the Mail & Guardian’s annual ‘Greening the Future’ awards.

42 562 tonnes (41%) of post-consumer PET bottles recycled; for the first time, PETCO providessupport to encourage the export of fibre made in SA from recycled bottles - a sign of the localfibre markets’ maturation.

29 048 tonnes (32%) of post-consumer PET bottles recycled; PETCO survives global economiccrisis. National Waste Management Act comes into effect; pilot plant produces rPET for food andnon-food grade applications for the first time.

19 734 tonnes (24%) of post-consumer PET bottles recycled; PETCO doubles tonnage of PETrecovered and collected since stablished.

9 840 tonnes (16%) of post-consumer PET bottles recycled; recycling levy is introduced.

PETCO is incorporated and financed by the Industry to manage its Extended Producer Responsibility(EPR) in South Africa.

The South African PET Plastic Industry recognises the need for an environmental solution for PET,and provides guidance and financial support for post-consumer PET bottles recycling.

2016

2015

2013

2011

2009

2007

2005

2004

1998 - 2004

15

PETCO's work focuses on five main areas:

Industry Projects

By taking responsibility for post-consumer PET recycling, PETCO imposesaccountability over the entire life cycle of PET products and packaging.This means that companies that manufacture, import and/or sell PET productsand packaging are financially and physically responsible for such productsafter their useful life.

Economic support through incentives or subsidies is provided to PET recyclerswho collect bottles and process them into recycled PET in preparation forthe manufacture of new products.

Support for PET recycling efforts ensures an on-going monetary value forpost-consumer PET. This sustains collection interest and reduces the volumeof post-consumer PET in the waste stream. The key is to ensure that thevalue chain remains viable, especially during periods of low commodity prices,influenced by the volatile economic market, the oil price, the highs and lowsof virgin polymer and staple fibre prices.

As part of our strategy, we continue to focus on stimulating investment ininfrastructure and innovation in the development of new end markets forrPET as well as the stimulation of existing markets.

Training and Mentorship of Entrepreneurs

PETCO sees the role of training and the mentorship of collectors as beingcritical to improving working conditions and assisting entrepreneurs to growand sustain their businesses, thereby stimulating economic growth, jobcreation and development in our country.

We strengthen relationships with municipalities to encourage the establishmentof kerbside collection projects and expand existing PET collection into newareas. PETCO supports projects and initiatives through the sponsorship ofinfrastructure and equipment that unlocks collections, helps collectors improvetheir efficiencies as well as the quantity and quality of PET collected.

Consumer Awareness and Education

We encourage consumers to participate in kerbside recycling projects wherethese exist and support community projects and drop-off sites that activelyrecover post-consumer PET for recycling.

We actively encourage and contribute to the education of learners throughnational schools recycling competitions and schools collection projectsundertaken with our partners, inspiring learners to re-think the future throughthe lens of the circular economy.

Print publications, broadcast, digital and social media are all used to conveyPETCO's recycling message. We conduct face-to-face engagements atexhibitions, public events and host interactive workshops and conferences.

Sustainability and Business Innovation

Recognising that business innovation sits at the heart of economic transitions,PETCO is a catalyst for design for recycling innovation. We aim to stimulatedialogue and direct action in shifting the use of finite resources, preservingthe value of existing resources and utilising renewable resources. Takingaction to create a supportive business environment for companies that userecovered resources will help drive additional recycling, create more jobs,reduce greenhouse gases and extend the life of existing landfills.

Insight and Analysis

Our insight and analysis, reports and global best practice case studies feedinto a growing body of information highlighting the rationale for a transitiontowards an economy where plastics never become waste.

16

PETCO IMPACTDASHBOARD 2016Circular economy thinking leverages the economicand environment SDG clusters impacting them all:

Sustaining the Environment SD Goals: 6, 7, 13, 14 and 15

- 90 749 Tonnes of Post-Consumer Bottles Recycled (22% increase over 2015)- 55% Post-Consumer Recycling Rate (3% increase over 2015)- 562 644 m3 saving of landfill space- 136 124 tonnes of Carbon emissions saved

Strengthening the Economy SD Goals: 8, 9, 11 and 12

- 62 000 income opportunities in recycling- R2.7m spent in support of collectors through equipment and training- R48m spent in support of contracted industry recycling projects- R363m paid by recyclers for baled bottles delivered to plants- R890m injected into the downstream economy

Shaping Societal Transformation through Education SDG Goals: 4

- 16 Accredited Training Courses- 3 Municipality Training Courses- 13 167 total website sessions (last 6 months since new website was launched)- 34 410 total website page views- 1 466 Facebook Likes (218% increase on 2015)- 1 199 Twitter Followers (140% increase on 2015)- 71 Instagram Followers (started 2016)- 51 YouTube Subscribers (started 2016)- 2 Associate Member Workshops

Improving Governance SD Goal: 16

- PETCO achieved a clean financial audit- >80% attendance by Directors at Board meetings (50 board meetings thus far).- Adherence to internally developed operational management & governance processes.

Seeking Partnerships SD Goal: 17

- The Council for Scientific and Industrial Research (CSIR)- International Labour Organisation (ILO)- Department of Environmental Affairs (DEA)- Department of Science and Technology (DST)- Packaging SA and Member Associations

• Paper Recycling Association (PRASA)• Polyco• Petcan• The Glass Recycling Company• SAVA• Polystyrene Council South Africa (PCSA)

- National Recycling Forum (NRF)- Institute of Waste Management SA (IWMSA)- PlasticslSA- SA National Bottled Water Association (SANBWA)- GreenCape- SAPRO- African Marine Waste Network (AMWN)- Consumer Goods Council of South Africa (CGCSA)

ECONOMICCLUSTER

ENVIRONMENTCLUSTER

EQUALITYCLUSTER

SUPPORTED BY HEALTH, EDUCATION & GOVERNANCE

ENABLED BY PARTNERSHIP

17

3 4 16

GOOD HEALTH& WELL-BEING

QUALITYEDUCATION

PEACE, JUSTICE &STRONG INSTITUTIONS

17

PARTNERSHIPSFOR THE GOALS

6

13

15

7

14

CLIMATEACTION

LIFE BELOWWATER

LIFE ONLAND

CLEAN WATER& SANITATION

AFFORDABLE& CLEAN ENERGY

2

5

10

1

NOPOVERTY

ZEROHUNGER

GENDEREQUALITY

REDUCEDINEQUALITIES

8

11

12

9

DECENT WORK& ECONOMIC

GROWTH

INDUSTRY,INNOVATION &

INFRASTRUCTURE

SUSTAINABLECITIES &

COMMUNITIES

RESPONSIBLECONSUMPTION& PRODUCTION

18

END-USE MARKETDEVELOPMENT

We urgently need to transform plastic packaging material flows if we are to continue toreap the benefits of this versatile material.

Maintaining a balance between the supply of post-consumer material, demand for newend-use products, and installed recycling capacity is critical to keep the bottle collectionand recycling chain intact and to ensure that the financial benefits continue to reach thecollectors on the ground.

In South Africa, post-consumer PET bottles are collected and recycled into two main typesof end-use products for the local and export market:

Bottle-2-Fibre (B2F)

In spite of experiencing sluggish growth in 2016,polyester staple fibre (PSF) remains the largestend-use market for post-consumer PET material.Significantly, with PETCO's assistance, our fibre-manufacturing partners were able to continuedeveloping export markets for their products.Success was achieved in spite of the continuingdepressed nature of global fibre markets.

In 2016, approximately 48 000 tonnes of PET,or close to 53% of the total PET volume collected,was applied in this end-use market. Goingforward, PETCO will provide additional supportto fibre exports, in line with the economic goalsof the SDGs and the South African government'sobjectives related to local value addition, exportpromotion and foreign currency earnings.

The B2B segment continued to experience robustgrowth in 2016, in line with growing awarenessand adoption on the part of brand owners ofExtended Producer Responsibility (EPR), and thereputational benefits arising from the use of rPETresin in their PET packaging products.

In 2016, for the first time, some exports of foodgrade rPET resin took place from South Africa.We hope to see this trend continue in 2017and beyond.

In total, more than 34 000 tonnes, or 37% ofthe PET bottles collected were applied in themanufacture of recycled PET resin in 2016.

From PETCO's perspective, the production anduse of both food grade and non-food grade rPETresin remains the major growth opportunity forPET recycling in South Africa.

Bottle-2-Bottle (B2B)

Other end-use applications

Exports of post-consumer PET material from South Africa remained constant in 2016, at just under10% of total collections.

Achieving the ambitious targets of the 2030 SD Agenda will require enhanced partnerships thatbring together Government, civil society, the private sector and labour and that mobilises all availableresources. PETCO is collaborating with existing recycling partners, research organisations andacademic institutions to develop and commercialise new end-use applications for post-consumerPET material. In certain cases, the development of these solutions is well advanced, and during thecourse of 2017, we hope to be in a position to make announcements in this regard.

19

PET bottle collections by end-use market

PET Bottle Recycling Tonnage by End-Use: Recycled tonnages by end-use for the past 6 years,showing exports, B2B and B2F (including industrial fibre, fibre exports, etc.). This clearly shows thegrowth in the B2B and food grade sector as an end-use market.

2010 2011 2012 2013 2014 2015 2016 2017TARGET

2018TARGET

37 361 42 562 50 274 59 691 64 109 74 360 90 749 95 000 105 000

Bottle-2-Foodgrade Bottle-2-Fibre (incl.industrial Bottle / Flake Exports

0%

10%

20%

30%

40%

60%

50%

70%

80%

90%

100%

20

PETCOPROJECTS

PETCO's support for high-volume commercialrecycling operations continued to make up morethan 70% of the organisation's total expenditure.

During 2016, these commercial scale recycling partners,operating in both the fibre and food grade segments,demonstrated an on-going commitment to productdevelopment, capacity expansions and the extensionof their respective collection networks.

PETCO closely monitors global and local market pricesand cost variables, and adjusts its financial supportmechanisms so as to maximise their relevance underever-changing market conditions.

For 2016, the indirect cost of the PETCO financialmodel to consumers remained at approximately1-2 cent per bottle.

PETCO's contracted recyclingpartners in 2016 were:

• Da Run Fa• Extrupet• FTE Insight• Kaytech• Mpact Polymers• Propet• Sen Li Da

Together these partners purchased post-consumerPET material to the value of more than R360 million,and injected end-use products worth approximatelyR890 million into the South African economy.

Collectively, PETCO'S recycling partners recycledmore than 2 billion bottles, or 5.7 million bottlesper day, over the course of 2016.

1 Commercial Scale Recycling Projects

Driving the transition tothe new plastics economy:

R360 million

R890 million

90 749 tonnes

2 billion

5.7 million

worth of paymentsmade to collectors

injected into thedownstream economy

of post-consumer bottlescollected for recycling

bottles recycledover the year

bottles recycledevery day

PETCO supports several categories of projects that are aligned with the principles of the circulareconomy, aiming to harness the benefits of plastics while addressing its drawbacks, delivering drasticallybetter system-wide economic and environmental outcomes:

1 Commercial Scale Recycling Projects

2 Collection and Training Projects, and Visible Recycling

a PET infrastructure and equipment provisionb Collector training and developmentc Education and awarenessd Special projects and joint venturese Fostering government partnershipsf Building the recycling network

3 Consumer Education and Awareness

In 2016 we supported 17 projects acrossseven provinces, bringing the number ofprojects supported in the past decade to 76.

PETCO supports projects through thesponsorship of infrastructure and equipmentthat unlock collections, helping collectorsto improve their efficiencies as well as thequantity and quality of PET collected. Wealso assist with the efficient transportationof baled material.

In 2016 we provided the following equipment:• 12 Co-operatives and SMME’s provided with

339 sets of protective clothing and reflective vests• 16 SMME’s and Waste Pickers with 625 PETCO

branded bulk bags• 8 SMME’s with signage and branding on

equipment and vehicles• 6 SMME’s with platform scales• 72 Waste Pickers with branded trolleys• 2 SMME’s with 7 branded volume cages• 2 SMME’s with gazebos and banner flags• 3 SMME’s with a shipping container each• 1 SMME with a branded trailer and a tow-bar• 1 SMME with a wall around the recycling depot

During 2016, in partnership with government,PETCO invested R297 000 in providingILO Accredited training to Co-OperativeMembers and SMME'S. 6 696 hours of trainingwas offered to 452 people. Employees ofmunicipalities, economic developmentdepartments and provincial departmentsof environmental affairs attended.

PETCO sees the role of training and thementorship of collectors as being criticalto improving working conditions and thehealth of collectors and waste pickers aswell as assisting entrepreneurs to grow

and sustain their businesses. We alsoidentify with the need to raise awarenessin communities and strengthen relationshipswith municipalities to encourage theestablishment of kerbside collectionprojects and expand existing PETcollection into new areas.

Training courses supported by PETCOand implemented by the InternationalLabour Organisation (ILO) social enterpriseaccreditation programme, were conductedin Sterkspruit, Tzaneen, Fort Beaufortand Port Elizabeth, amongst others.

Schools Projects

The ABI (CCBSA) School programme hasincreased the number of schools from 40 schoolsin 2011 to 418 schools in the current year (369primary and 49 high schools). The success ofthe programme is highlighted by the annualincreases in volumes, managing to collect some218 tonnes of PET (210 tonnes PET in 2015).

We partnered with our Shareholders Nampak,Coca-Cola Beverages (CCBSA) and ABI (CCBSA)in three school recycling projects covering 426schools in KZN, Gauteng and Mpumalanga.

One of the highlights of the programme hasbeen the empowerment of 53 Schools RecyclingRepresentatives (SRR). In addition, 14 SRR'shave been placed in permanent positions withinCCBSA and elsewhere.

Coca-Cola Shanduka (CCBSA)Schools Programme

Four Mhluzi Primary schools collected an averageweekly total of 14 tonnes of recyclables.Collection processes are assisted by interns fromthe Steve Tshwete Municipality and Audited bySilver Ink Recycling, one of PETCO's partners.

21

2 Collection and Training Projects, and Visible Recycling

PETCO spent R2.7 million of its budget to support initiatives and activities that support collectorsand contribute to the visible recycling of PET.

PETCO supports visible recycling in the following ways:

a PET Infrastructure and Equipment Provision

All of our projects are monitored to track performance and growth as part of our mentoring philosophy,and moving collectors up the value chain, in line with the UN Sustainable Development Goals.

b Collector Training and Development

c Education and Awareness

PETCO embraces partnerships and sees thevalue of collaborative efforts. We undertakea range of projects, from in-kind donationsand joint-cause marketing campaigns tojoint ventures with government, otherindustry bodies, our RAG partners andour Shareholder Members.

A number of remarkable initiatives wereundertaken in 2016, to highlight a few:

The African Marine Waste Network

The African Marine Waste Network, anambitious international collaboration with theaim of developing a waste strategy for Africa,was launched in South Africa in 2016, withPETCO as a leading strategic partner and ownerof the communications component.

Mapping Project

PETCO successfully populated its collectionprojects onto a spatial mapping system. AllPETCO'S assets, training and collections projects,distributed nationally across the country, arenow clearly and spatially reflected on the map.

ILO Umhlatuzi Responsible TourismCompetition

PETCO partnered for the 3rd year with ILO(International Labour Organisation). This yearthe theme of the competition was theUmhlathuzi Municipality Responsible TourismCompetition. PETCO sponsored two winners inthe Waste and Recycling Category. The twoSMME's were supported with training, signageand equipment.

Boxmore Trolley Project

PETCO sponsored Waste Pickers with trolliesin the areas where Boxmore has branches.15 Waste Pickers will be able to increase theirPET collection volumes and earn more money.The beneficiaries are from Harrismith, Sowetoand Somerset West.

Wildlands Trust

PETCO sponsored 20 trolleys to Waste-preneurswho were using any means possible to collecttheir material whilst walking through thecommunities where they live. Their ability tocollect volume is directly related to their abilityto carry the material physically (usually in bags).Having a trolley now offers a solution to theconstraints that Waste-preneurs experienceand will directly enable them to load morematerial as well as offer a significant time andmoney saving benefit.

National Zoo Pretoria

PETCO signed an MOU with the Pretoria Zooat the end of 2016 with the vision ofimplementing Seperation At Source withinthe Zoo. PETCO with the help of City of Tshwaneidentified and appointed a co-operative tomanage the separation at source recyclingproject at the Zoo. PETCO has trained theco-operative members and assisted themwith equipment: Protective clothing, 5 x Trollies,Bulk bags and a shipping container.

22

d Special Projects and Joint Ventures

e Fostering Government Partnerships

PETCO partnered with government on various projects across all 9 Provinces, thanks to our collectionnetwork and the local authorities.

In 2016, PETCO supported government projects, including:

DEA Trolley Project

PETCO sponsored DEA with 15 trolleys and100 bulk bags to be issued to Waste Pickersto assist them in collecting their recyclables.

Nelson Mandela Bay

PETCO sponsored a 12m shipping containerto be used as storage and office facility for arecycling project. The recyclables come to thesite pre-sorted and already placed into the correctcontainers, saving the project transport money.

Engcobo Separation at Source Projects

PETCO facilitated a workshop for theEngcobo Municipality, connecting them withbuyer and a training partner for their separationat source project, and moving a co-operativeaway from a landfill site into municipalinfrastructure in the process.

23

f Building the Recycling Network

As a measure towards achieving an inclusive approach amongst stakeholders of PET recycling, PETCOimplements a membership scheme for stakeholders.

There are two broad categories of PETCO Membership:

Communicating regularly with our members about legislative changes and the potential impactson the industry, on critical issues facing the SA PET industry, as well as providing opportunitieswhere networking and info-sharing can take place, is very important to PETCO.

Key events in the Member calendar are outlined below:

Shareholder Membership

Shareholder Membership is reserved forcompanies who pay levies and grants,and for whom shareholding and voting isreserved. Percentage of shareholding inPETCO is allocated according to annualcontinuous membership contributions,which is calculated every 3 years.

Associate Membership

PETCO created the Associate MembershipProgramme for organizations who are notrepresented in the shareholding of PETCObut would like to become part of the PETCOfamily as they subscribe to our principles.

Associate Members are not allocated shares inPETCO and have no voting rights, but many otherbenefits apply, such as preferential attendancerates for workshops and networking events.

Membership Workshops

PETCO hosts regular nationwide memberworkshops, specifically designed to be usefulto members' businesses and of benefit to theiremployees. These workshops help to ensurethat members are up to date with the latestofferings from government and the privatesector. PETCO Associate Members areallocated preferential rates for attendance.

In 2016 we hosted two well-attended paneldiscussions on Sustainable Brands andRecycling in Pretoria and Cape Town.

PETCO AGM

PETCO's Annual General Meeting (AGM),the premier event in the PETCO calendar,represents the most significant platformfor communicating with key stakeholders.The main purpose of the AGM is to complywith legal requirements, such as thepresentation and approval of the auditedaccounts, election of directors, andappointment of auditors for the newaccounting term.

The PETCO AGM is always very well attendedby a range of shareholder members who usethe time to reflect on the progress made overthe preceding year and to grapple with theopportunities and challenges looking intothe future and beyond.

As part of the annual proceedings, PETCOhosts the PETCO Awards designed torecognise and honour the people, companiesand organisations involved in the PET recyclingvalue chain in South Africa, which not onlycontributed to advancing PET recycling, butalso reflected the principles of EPR and circulareconomy-thinking in their practices, duringthe course of the previous year.

PETCO’s 11th AGM was held on Thursday21 July 2016 at The Venue Green Park, Sandton.

25

1 Best Recycling Public Education Programme

Awarded to public, private or non-governmental organisations that exemplify excellence in recyclingwith respect to public education and awareness programmes.

WINNERS:

The Waste Trade Company

The Waste Trade Company, located in Port Elizabethin the Eastern Cape, creates awareness throughinvolvement in local initiatives and through theimplementation of recycling initiatives at events inNelson Mandela Bay. The Schools Recycling Projectservices Port Elizabeth, Uitenhage, Despatch, Kirkwood,Addo and the Sundays River Valley area.

Through their programmes, they collected 59 973 kgof PET during the course of 2016.

PETCOAWARDSFor noteworthy achievements and successes during the course of 2016, PETCO gaveawards to 10 recipients in the following 8 categories:

White Sharks Project Recycle Swop Shop

Since 2003, the Recycle Swop Shop in Masakhane,Gansbaai has been enriching children's lives byencouraging them to recycle and then rewarding thateffort. Last year, an astonishing 14 940 kg of recyclableswere collected by 6 054 kids, which would haveotherwise ended up in the ocean. So, with this simple,yet effective community project, White Shark Projectsalso helps the community to do their bit for theconservation of our ocean and our environment.

The Recycle Swop Shop is very popular and,subsequently, Masakhane is one of the cleanestcommunities in South Africa.

Learners bring recyclables to the Swop Shop,for which they are given points that allow themto buy school stationery, second hand clothing,small toys, blankets, basic food and even sanitarywear from the Swop Shop.

The Waste Trade Company's School RecyclingProjects collected almost 60 tonnes of PET in 2016.

26

2 Best product using recycled PET

Awarded to a company or organisation that has displayed high levels of innovation and expertise inaddressing the design, technical and manufacturing challenges associated with increasing thepercentage of recycled PET resin included in the product/s that they manufacture.

WINNER:

The Joinery, for their 'My Office' range.

Focused on methods of production that contributeto local community growth, the Ellis sisters -Natalie and Kim - have devoted much of their timeto researching and creating their own sustainablefabrics. In conjunction with PETCO partner Propet,The Joinery has conceptualised a fabric that lookssimilar to felt but is made from discarded plasticPET bottles collected around Cape Town.

This new range of tech accessories called 'My Office'is handmade by local seamstresses and artisans fromrPET, and features a multi-purpose laptop sleevemade from the material of 5 recycled plastic bottles.

Since May 2016 they have used around 15 000PET bottles in their products, diverting thesebottles from landfill.

3 Recycling Partnership Game Changer

This award recognises partnerships, including government (municipal, provincial or national), regulatoryagencies, community organisations and private industry, that have successfully implemented game-changing initiatives, policies or programmes that advance recycling and sustainability in South Africa.

WINNER:

Pikitup

The Pikitup partnerships in Johannesburg haveresulted in private-sector companies providingtechnological solutions for waste separation andprocessing, in addition to community co-operatives,individual pickers and micro-enterprises. The initiativeinvolves households separating their waste into threebags: wet and organic waste; plastics and glass; andpaper. Recovery is increased through the involvementof pickers, co-operatives and community participationin buy-back programmes, and their roles are alsobeing formalised through this model.

In the last 5 years, Pikitup, in partnership withJozy@Work, has increased its Separation At Sourceprogramme to include 56% of households withinJohannesburg. This has enabled the City to divert21 000 tonnes of its waste in the 15/16 financial year.

Natalie and Kim Ellis, with their shopper bags,made from recycled plastic bottles.

Pikitup's Nelly Rampete isthe main driver behind theirSeparation At Source programme.'

27

4 Recycling Innovator of the Year

This award recognises a PET recycling facility that is a leader in one or more key measurements:innovation, volumes of PET collected and/or processed, site improvements and sustainabilitymeasures adopted.

WINNER:

Extrupet (Pty) Ltd.

Extrupet's PhoenixPET™ has been at the forefrontof innovation by being the first rPET used in, amongstother products, carbonated soft drinks, bottled water,fruit juices, liquid detergents and sheetthermoforming products.

In one month alone (May 2016), Extrupet purchasedover 3 000 tonnes of post-consumer PET bottles -the first time in PETCO's history that this has beenachieved by a single recycler in a given month.

This award recognises an individual or an organisation whose ingenuity and perseverance havecreated and sustained successful business ventures in the PET collection or recycling sectorthat directly benefits and uplifts the communities within which they operate.

WINNER:

Reliving Cop17

Re-livingCOP17 is a Non-Profit Organisation runby Smangele Chirwa that seeks to educate andmotivate communities about measures for theimplementation of resolutions taken at the majorinternational COP17 event. It is the only buy-backcentre in Esikhawini Township, Richards Bay, andworks to educate the community about theimportance of recycling through door-to-doorawareness raising activities and campaigns atschools, parent meetings, churches andcommunity meetings.

Through their programmes, they collected3 418 kg of PET during the course of 2016.

5 Best Community Breakthrough Initiative

Extrupet Joint Managing Directors,Vijay Naidu (left) and Chandru Wadhwani (right),on the floor of the PhoenixPETBottle-2-Bottle plant.

Smangele Chirwa is passionate abouteducating communities about recycling.

28

6 PET-trepreneur

This award recognises an individual whose entrepreneurial insight, ingenuity andperseverance has created and sustained a successful, growing business venturein the PET collection or recycling industry.

WINNERS:

Nokubonga Mnyango,owner of Uthando Solutions and Trading

Nokubonga resigned from her job at the end of2015 and decided to start collecting recyclables.Today, she has more than doubled her monthly incomeand, with the support of her husband, operates herbusiness from home in the township of Ngwelezaneoutside Empangeni. Recently, she has been offeredpremises by the Department of Environmental Affairsat the uMhlathuze Municipality and is in the processof moving her business. She collects waste fromtaverns, shops, and schools and supplied 3 690 tonnesof PET to Mpact in 2016. She now employs2 permanent employees and, in the busy season,hires more than 59 casuals.

Maxwell Ndlovu,owner of Okuhle Waste Management

Managed and run by Maxwell Ndlovu, the Denverbuy-back centre employs 5 sorters on site, andcollectors delivering to the centre created anadditional 20 indirect jobs.

Total volumes are approximately 50 tonnes ofpaper and PET per month and approximately10 tonnes of other recyclables. Projected growthin volumes is set for around 100 tonnes by theend of 2017. The company has recently employed136 people with funding from Jozi@work for streetcleaning, environmental education awareness andrecycling for a period of four months.

"I realised I could live my dream oflinking disadvantaged recyclers inthe community to the markets,”says Nokubonga.

Says Maxwell, "We saw an opportunityof running a buy-back centre that isopen till late at night - an innovativeway of getting more PET.

29

7 Top Women in Recycling

This award recognises a female in the South African recycling sector who has demonstratedadmirable leadership, business acumen and strategic foresight in driving and growingSouth Africa's economy through recycling.

WINNER:

Charlotte Lamprecht,owner of Henque Waste

Charlotte started her recycling initiative in September2007 in Riversdale, Western Cape. Within a year,she had convinced the Municipality of Riversdaleto implement a two-bag system. Her company nowruns the two-bag system in Still Bay, Jongensfontein,Riversdale and Heidelberg, and she has agents inKnysna, Montagu, Barrydale and Uniondale.

Total volume of material recycled during 2016 was3 287 308kg and total PET during the same periodwas 57 392kg, or just over 57 tonnes. Through thebuyback centres, they support approximately400 entrepreneurs per month, buying material tothe value of between R58 000 - R68 000. A totalof 81 people are employed, 48 of whom are women.

8 Media Spotlight award

This award recognises a journalist or a media personality that is actively driving awareness ofrecycling and general sustainability issues, and has made an outstanding contribution to theunderstanding amongst consumers of issues pertaining to reduction, reuse and recycling.

WINNER:

Sindy Peters,Managing Editor at Bizcommunity.com

This year we asked journalists to enter a piece that theyhad written in the past year pertaining to recycling andsustainability. We had 11 entries and Sindy Peters' piecewas the most original.

This is an extract from her piece:

“For someone without a background in chemicalengineering, like myself, this might seem like wizardry,but it all comes down to the fact that PET forms partof the polyester family - a material used in themanufacture of clothing, home textiles, geotextiles, andnew product packaging. Herein lies one of the primaryreasons why we should limit the number of plasticbottles that end up in our landfills - because theirusefulness extends well beyond their original purpose,and to bury them in earth is exceptionally wasteful.”

Charlotte describes herself as'spirited and tenacious'.

Sindy has always been passionateabout the environment.

31

Despite a comparatively small overall marketingbudget of R3.5m, PETCO's total combined advertisingvalue equivalent (AVE) increased by 113%, comparedto 2015 - which translates into a return on investmentof approximately 1 435% for the year.

New research conducted in2016 includes:

• PETCO Brand Audit:

To refocus our brand positioning, communicatemore effectively with our partners and providestrategic direction going forward.

• Research into Associate Membership programme:

To determine the current reputation of PETCOas perceived by Associate Members as well asto gauge their satisfaction levels.

• Consumer research:

To understand the behavioural shift ofPETCO's target audiences towards embracingan anti-littering, consumer reduction andrecycling lifestyle.

We re-launched our website and worked tosegregate our database for more effective andtargeted communication. We further refined ourshort video clip on B2B recycling to be moreconsumer-friendly, and produced short video clipsof our 2016 Award winners. These short clips workto build understanding of the highly technicalprocess of PET recycling, as well as highlightingthe incredible people behind the recycling process.

3 Consumer Education and Awareness

ACTION

AWARENESS

COMPREHENSION

CONVICTION

COMMITMENT

Bring recyclingto the attentionof the consumer.

Immediate butshort-lived e.g.use of the correctrecycling bin, etc.

Deeper, moreentranchedunderstandingof recyclingprinciples.

Creating thedesired behaviourchange, movingtowards yieldingretention.

Lifestyle choicesstart to reflectEPR principlesi.e. embracinga recyclinglifestyle.

32

FINANCIALINFORMATIONHIGHLIGHTSIn order to sustain and grow PET bottle collection, consistent demand for post-consumer PETis required. Recycling is a commodity business and, as such, is prone to significant cycles.

Unlike plastics, the steel, paper, glass andcardboard used in packaging are helpedenormously by the ability of the originalmanufacturers to recycle their own materialrecovered from the waste stream. Polymermanufacturers are unable to offer such a lowcost route because of the multiple variationsin grades of the different types of polymerproduced. Companies specifically set up forthis purpose therefore carry out the recycling.

In most cases, this leads to recyclatebeing produced, which then has to competewith the highs and lows of virgin polymerprices and other end-uses (specificallytextiles with recycled polyester contentthat compete with virgin polyester staplefibre). It is great when these prices arehigh, but when they are low, recyclateoften struggles to survive. Hence thePETCO financial model.

HOW WE UTILISED OUR FUNDS YEAR ON YEAR

LEVIES GRANTS OTHER

2015 20160

10

20

30

40

50

60

70

80

90

100

2015 20162015 2016

2% 2% 2%

Financial statistics as percentages of Budget vs Actual, with previous year comparison:

86%

86%

87%

86%

12%

12%

11%

10%

4%

33

EQUIPMENT,INFRASTRUCTURE

AND TRAINING

RECYCLINGPROJECTS SUBSIDY

SUPPORT

MARKETING,EDUCATION AND

AWARENESS

ADMINISTRATIONAND OPERATING

COSTS

0

10

20

30

40

50

60

70

80

90

100

2015 2016 2015 2016 2015 2016 2015 2016

5% 4%

69% 75

%

5% 5%

12%

12%

77% 83

%

6% 6%

12%

12%

7% 6%

Industry Waste Management Plan

One of our main opportunities going forward liesin the fact that DEA will soon be requiring thePaper and Packaging Sector to submit an IndustryWaste Management Plan. At the heart of thislegislation is the idea that producers should beresponsible for the end-of-life management oftheir products and packaging.

One of the reasons for the previous withdrawalof the request for plans to be submitted wasconfusion over the definition of “Producer” andwho should register with DEA and submit plans.It's useful to look to other countries for ideas onhow to solve such problems. One example, thatis similar to the model that PETCO has adopted,is from a PRO in Canada called Multi MaterialBritish Columbia (MMBC) who adopted aninteresting approach, namely that every companyin the value chain is a "Producer". The definitionassigns responsibility to the economic operatorsin the chain with "obligation hierarchy" to ensurethat all relevant packaging materials are coveredcorrectly, regardless of how many economicoperators are involved in putting the productonto the market. This is a way of making surethat all responsible parties are identified, and ofshowing that the whole value chain is responsiblefor the product. Novel approaches such as thisone provide good options for the South African

Paper and Packaging Industry to consider whencompiling Industry Waste Management Plans.

We believe that statutory EPR will enable us to:

• Specify enforcement mechanisms suchas penalty procedures and provisions fornon-compliance to create a level playingfield amongst PET users and to ensure no'free-riders'.

• Require converters, brand owners, retailers,municipalities and other stakeholders, asappropriate, to jointly develop and implementplans to entrench a circular economy approachin the design and consumption patterns ofproducts, specifying what provisions mustbe addressed, fee or cost structures,administration and reporting.

• Provide more comprehensive messagingto South African residents and consumers.

This is world-leading Extended ProducerResponsibility in action and we look forward tothe new era of recycling in South Africa that thestatutory EPR will bring. At the time of printing,we believe that DEA will require submissionof the Plans by December 2017. For now,we eagerly await the final notice calling forplans, which we expect to be made soon.

34

WHERE TOFROM HERE?The outlook for 2017and beyondPET Recycling Economics

PET recycling economics remain challenged and nothing indicates that there will be a swift recovery.The global scenario is one of gross oversupply and weak demand for PET, placing strain on recyclers.Soft local economic conditions, possible recession and rising interest rates place additional challengeson all manufacturers.

The local fibre end-use market also looks increasingly bleak.

In 2017, based on indications received from PETCO's shareholders and partners in the PET valuechain, we anticipate that the total market size will remain at approximately 241 000 - 245 000 tonnesi.e. that market growth will be close to zero. This can be ascribed to a number of factors, includingthe overall lack of growth in the South African economy and reduction in levels of disposable income,along with the high rate of market growth experienced in 2016 (15%), which meant that much of thegrowth that would ordinarily have occurred in 2017 took place in the second half of 2016.

Nonetheless PETCO is well placed to facilitate the collection and recycling of 95 000 tonnesof post-consumer PET bottles in South Africa in 2017, growing to 135 000 tonnes by 2020.

We are focussed on the following opportunities:

Further Collaborationswith DEA

National Awareness. Reinforcing anti-litteringand recycling behaviour and creating a nationalculture within which citizenry is aware of andactive in their role in attaining a clean, safe andhealthy environment.

Training and School Recycling Programmes.Sharing knowledge, programmes andimplementation timelines are some of themeasures being put into place.

Data collection and analysis. There is awealth of data available from StatisticsSouth Africa, National Treasury, theDepartment of Education and from withineach organisation. Combining datasets,sharing insights, and best practice are beingexplored. We see great potential for enhancingthe impact on planning and Monitoring andEvaluation across both organisations.

Standardise Waste ManagementProcedures and Processes

Most of the authorities in South Africa stilldo not have kerbside plastics collection, evenfor bottles. Substantial progress on achievingplastics recycling targets will not happen untilbest practice processes and procedures areadopted nationwide. The higher the targetedrecycling rate, the more challenging it will beto collect more bottles. PETCO is excited aboutthe roll out of additional municipal kerbsidecollection and various projects and partnershipsto achieve increased collection. In particularthe Bottle-2-Bottle expansion would requirecleaner feedstock and dovetails well withGovernment's mandate to municipalities toreduce the amount of material going tolandfill. The expansion of kerbside collectionprogrammes must however be carefullybalanced with the needs of the informal wastepickers, who form an important foundationfor the entire value chain.

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In order to fundamentally change the waywe think about waste in South Africa, weneed to embrace the principals of a circulareconomy - a system in which products arenever discarded, but reused, recycled andre-introduced into new products. Effectiveresource recovery and waste managementare critical to a healthy and prosperous future.

By transitioning to a circular economy, wehave the opportunity to be leaders of a globalmovement toward a more sustainable modelwith significant economic, social andenvironmental benefits for our country.

Making the transition will require a shift inhow we think about waste. It will meanchanging our perspectives, values and habits.A circular economy aims to eradicate waste,not just from manufacturing processes, butfrom our everyday lives. A circular economygoes beyond recycling. The goal is not just todesign for better end-of-life recovery, but alsoto minimise the use of raw materials andenergy through a restorative system.Businesses will be encouraged to design long-lasting, reusable and easily recyclable products,

adding significant value to the economyby creating or expanding the reuse andremanufacturing sectors. In a circulareconomy, the value of products and materialsis maintained for as long as possible. Wasteis minimised and resources are kept withinthe economy when a product has reachedthe end of its life, to be used again to createfurther value.

Achieving these goals will require a freshapproach to waste management and resourcerecovery in our country - one that accounts forthe shifting global context, recognizes theopportunities in a circular, low-carbon economyand enlists the support of all South Africans.We believe that this thinking affords a viableopportunity to drive performance, innovationand competitiveness, and stimulate economicgrowth and development. It's also an excitingchallenge to create better products, reduce ourreliance on extraction of virgin materials, andsupport efforts to fight climate change.

The trick, however, is reaching that point atwhich a circular plastics economy becomeseconomically viable.

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The CircularEconomy

CLOSED LOOP

RE-USE

USE

BIO-BASED PET

VIRGIN PETFEEDSTOCK

DESIGN &PRODUCTION

BOTTLES• Soft Drinks• Fruit Juices• Water• Dishwashing Liquid• Shampoo

Etc.

SHEET & EDIBLE OIL• Sandwich Trays• Cake Trays• Cooking Oil

rPET

rPET

What needs to happen?According to the Ellen MacArthur Foundationresearchers, three large shifts need to occurif plastics will ever transform into more ofa closed-loop or circular economic system:

1 An effective after-use plastics economymust be developed. To accomplish this,plastics, and their surrounding systems,must improve in quality and economicperformance. As a society, we must alsoundergo a surge in reuse and recycling.

2 Plastics industry stakeholders mustdramatically reduce all negative externalities,including the excessive release of plasticsinto the natural environment. Creating aneffective post-use plastics economy canprovide an economic incentive to keepplastics in such a system, and in turnwould help decrease leakage.

3 In a reversal of how the industry grewover the past several decades, plasticsmust also be decoupled from fossil fuelsby researching and incorporating morerenewable sources of feedstock.

While many businesses may complain aboutthese new requirements, the truth is that theycan force us to become more innovative - andperhaps even arrive at new revenue streams asa result of these efforts. Hence we are bullishon the prospects for plastic becoming more ofan economic generator, rather than a materialthat leaves behind huge environmental andsocial costs. The business community'swillingness to re-evaluate plastics is higher thanever, as more companies realise that greaterstandardisation in both design and collectionsystems is overall more efficient in movingsociety toward a circular system.

To achieve this shift, we will need a long-termstrategy and the support and co-operation of allpartners, including municipalities, producers,waste management service providers andconsumers. This co-operation will continue to bean important part of the circular economy. New,innovative operating methods and opportunitiesto maximise the use of materials will come fromcross-sectoral collaboration and bold leadership.Education and awareness will be essential tonudge these changes and will be critical tosupport increased participation.

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POLYESTER FIBRE

PILLOWS& DUVETS

ROOFINGINSULATION

CLOTHING EXPORT

LANDFILL & LEAKAGE

Create Conditions for SustainableEnd-Markets

Creating a greater demand for products madefrom recycled plastics is essential. The greaterthe demand, the more this will “pull through”the supply chain and stimulate activity.

End-use market developments for recycledstrapping as well as the export of fibre areopportunities to pursue going forward. A numberof other opportunities are currently in the pre-feasibility stage, and PETCO will continue tosupport research in these areas in 2017 and beyond.

For materials to be recovered and re-integratedinto the economy, the cost to recycle must bemore viable than the low cost of sending materialsto landfill. More emphasis needs to be placed onstimulating the development of markets for theseproducts to help close the resource loop. Takingaction to foster a supportive business environ-ment for companies that use recovered resourceswill help drive additional recycling, create morejobs, reduce greenhouse gases and extendthe life of existing landfills.

Embedding Design for Recyclinginto the Development of Packaging

We recognise the need for innovators, designers,manufacturers, and packaging decision makersto understand how packaging design decisionscan affect container recyclability and wherefeasible to design packages to be compatible withthe broadest range of recycling operations andtechnologies. PETCO desires to become the leaderin “design for recycling” governance, setting uprelevant marks of quality for all to adhere to andbecome the go-to organisation on all matters PET/ rPET related. We think it is an exciting opportunityto inspire a generation of designers to profoundlyrethink plastic packaging.

During 2017, we will initiate a number of projectsin this area, including targeted engagements with

brand owners and industry organisations inspecific sectors. These engagements will buildpartnerships with brand owners, designers,marketers and other packaging decision makers,to maximise recyclability and reduce theenvironmental impact of their packaging.

Our government has procurement policies thatencourage and support purchasing greenproducts and services that do not impact theenvironment. As we shift to a circular economy,government leadership in procuring goods andservices that make use of recovered resourcesor include recycled content could help stimulatemarkets for recovered materials.

Industry Developmentsand Expansion

Hosaf, as the only virgin PET resin producerin South Africa, has embarked on a phasedexpansion program. The incremental capacityincreases will happen in two distinct phases.Phase 1 will see Hosaf increasing its capacityto 237 000 tonnes per annum by the middleof 2017. Phase 2 will increase production to around260 000 tonnes per annum, the timeline for thisimplementation is yet to be determined.

Hosaf's increased capacity will be sufficientto supply the complete South African virginPET demand for the next few years, thuseliminating the need for any imported PET.

The Coca-Cola system in Africa has become moreunited and efficient. They are planningto grow the business. The company is in tunewith its external environment and embracesthe values and needs of its consumers, andis planning to grow the business.

A number of PETCO's existing recycling partnersare in the process of investigating capacityexpansions within their existing facilities. We hopeto be in a position to make some exciting announce-ments in this area during the course of 2017.

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Greg MorseBottler Perspective

“Going forward, we are very excitedto have the possibility of using rPETin B2B applications. We appreciatethe investment that has gone into theinfrastructure in making this possibleand realise that without PETCO'ssupport, closing the loop with respectto recycled PET, would not havebeen possible.”

What do our Stakeholders think about the Future?David DrewConverter Perspective

“The key for the next 18 months or sowill be working with the industry andgovernment to try and ensure thatwhatever is implemented or enforcedwon't prejudice the PET industryunnecessarily. To do this we need tobreak down the silos both across thepackaging industry and even thosewithin the PET industry. Without unitywe are unlikely to convince governmentto accept our proposals.”

The Sugar Tax

In 2016 government announced a tax onsugar-sweetened beverages (SSBs), whichrequired PETCO to develop more than onebudget scenario to cater for the potentialimpact of this tax on our business model.

Tubs, Traysand Edible Oil

Tubs, tray and edible oil bottles are currently notrecycled in South Africa. There is potential forother forms of recovery for these pack forms,depending on buy-in from the sector to fund theinvestment in collection and technology. Theissue of tracking 'free riders' coming aboard asPETCO members also comes to the fore, as theyare one of the largest end-use sectors of recycledPET for packaging. We continue to encouragethese producers to engage with us, as there isnow a pressing need for PETCO to represent theentire PET sector as a vehicle for fulfilling theirEPR obligations.

We are currently working with the Cape CraftDesign Institute (CCDI) and some thermoformrepresentatives on a Design Thinking projectaimed at improving the recyclability of PETthermoform trays.

Research and InternationalCooperation

Energy Recovery. An increasing numberof countries are starting to recognise thatwaste plastic should be regarded as a valuableresource that should ideally be recycledor, where that's not an option, used to fuelwaste-to-energy facilities. Challengesassociated with Energy Recovery projectsinclude being able to secure long-termcontracts beyond the usual three-yearperiod with municipalities, as well as beingable to secure off-take agreements for thesale of electricity. PETCO has drafted adiscussion document on Energy Recoverythat is accessible from our website.

Integrating the Formal andInformal Economies

Could the integration of the formal and informaleconomies provide a solution to waste managementin South Africa? Currently the informal sector playsan essential role in waste management in SouthAfrica. However, a prerequisite for successful plasticwaste management is the existence of a legalframework that supports and finances the collectionsystem with the necessary infrastructure, awarenesscampaigns and the training of waste pickers. Goingforward, it will be crucial for waste pickers to getorganised into groups, co-operatives or othercollective entities. The experience of waste co-operatives in Brazil and India and in other countriesand the legal framework that supports them ishelpful to our situation. Many challenges remain butthrough a positive attitude and support from all ofstakeholders more inter-linkages between the twowaste management sectors will emerge in the future.

Consumer Awareness andUnderstanding

We know that consumers are generally willingto recycle, when it is made easy for them to do so,but getting them to be fully efficient and motivated,and to ultimately change behaviour, requires ongoingawareness campaigns and education. Whileconsumers might be aware of the need for change,most residents are not acting on their awareness,and lack understanding of what they can do thatwould actually make a difference. Residents arealso looking for an authoritative voice they can trustto give them accurate and reliable information abouthow and what to recycle.

Our primary focus will be to increase consumer'saccess to accurate information about PET recyclingwithin the South African context, and increase theirknowledge of recycling and the mechanisms bywhich they can participate in the recycling process.By increasing their access to knowledge andinformation, we aim to motivate increasing numbersof consumers to participate in collection and recyclingbehaviour, and help consumers along the journeyof behaviour change as we see it, namely awareness,action, comprehension, conviction and commitment.

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The following Challenges are anticipated:

Chandru WadhwaniCollector / Recycler's Perspective

“Our challenge going forward will beto maintain and grow the percentageof PET collected in an environment ofweak price dynamics for rPET in a “lowoil price' environment. This coupledwith pending Government legislationis leading to heightened uncertaintyin the industry.”

Tom McLaughlinRetailer Perspective

“The fact that PETCO with the support ofits members have set up a circular systemfor used PET bottles that creates jobs,saves foreign exchange, prevents wasteto landfill and produces quality PETmaterial for re-use at less than virgin costis simply amazing. It is pioneering thecircular economy for packaging andkeeping costs down. That's good for retail.”

CELEBRATINGTHE PETCOPEOPLE

PETCO CONTRACTED RESOURCES

· Martin NiebuhrAccounting and Financial Consultant

· Annette SchellLevy Manager

· Oscar BaruffaData and Strategic Projects

· Deloitte SAAuditors

It's time, once again, to acknowledge and celebrate theincredible people behind this year's many accomplishments.You will find them all listed on the following pages, but thathardly suffices to show our appreciation for the efforts, thecreativity and, most of all, the heart they all put into sustainingand expanding our presence. May the coming year bring newrecycling partnerships, a more stable economic environment,recovery and further growth.

· Cheri ScholtzChief Executive Officer

· Alistair SchornBusiness Development Manager

· Belinda BookerCollections and Training Manager

· Janine BassonStakeholder Relations Manager

· Vainah MbuloJohannesburg Office Administrator

· Financial Controller(to be filled)

PETCO STAFF

CHERI SCHOLTZ

ALISTAIR SCHORN

BELINDA BOOKER

JANINE BASSON

VAINAH MBULO

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PETCO BOARD OF DIRECTORS

NON-EXECUTIVE DIRECTORS

· Casper Durandt - ChairmanFranchise Technical Director, Coca-Cola South East Africa; Representing Brand Owners

· Tshidi Ramogase - Vice ChairmanCorporate Affairs Director: SAB Miller / ABI Soft Drinks; Representing Bottlers

· Greg MorseManufacturing Director: Coca-Cola Peninsula Beverages (Pty) Ltd., Representing Bottlers

· Daniel SchoemanGeneral Manager: Hosaf; Representing Resin Producers

· Chandru WadhwaniJoint Managing Director: Extrupet (Pty) Ltd., Representing Collectors / Recyclers

· Tom MclaughlinResponsible Sourcing: Woolworths Food; Representing: Retailers

· Andre NelSustainability General Manager: Pick 'n Pay; Representing: Retailers

· David DrewChief Commercial Officer: Boxmore; Representing: Converters

· Vukani MagubaneDirector of Public Affairs and Communications: Coca-Cola South East Africa; Representing: Brand Owners

Our directors serve a three-year term and areelected after being nominated by the industrysectors they represent. They may avail themselvesfor re-election.

Our board are not remunerated and pay theirown expenses to attend annual meetings.

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40%CONVERTERS

25%BOTTLERS

20%BRAND OWNERS

10%RESIN PRODUCERS

5%RETAILERS

PETCO acknowledges our partners who share anambitious vision to shape waste managementpractices in South Africa.

• The Council for Scientific andIndustrial Research (CSIR)

• International Labour Organisation (ILO)• Department of Environmental Affairs (DEA)• Department of Science and Technology (DST)• Packaging SA and Member Associations

· Paper Recycling Association (PRASA)· Polyco· Petcan· The Glass Recycling Company· SAVA· Polystyrene Council South Africa (PCSA)

• National Recycling Forum (NRF)• Institute of Waste Management SA (IWMSA)• PlasticslSA• SA National Bottled Water Association

(SANBWA)• GreenCape• SAPRO• African Marine Waste Network (AMWN)• Consumer Goods Council of South Africa

(CGCSA)

PARTNERS AND MEMBERS OUR 25 SHAREHOLDERMEMBERS ARE THOSE WHOPAY LEVIES AND GRANTS, ANDFOR WHOM SHAREHOLDINGAND VOTING IS RESERVED.

Shareholder Membership is reserved forcompanies who pay levies and grants, and forwhom shareholding and voting is reserved.

At end-December 2016, there were20 Shareholder Members of PETCO,following a number of mergers:

1 Astrapak2 Bizee Corporation t/a ATA Agencies3 Bowler Plastics (Pty) Ltd.4 Boxmore Packaging International (Pty) Ltd.5 Coca Cola Beverages South Africa (CCBSA)6 Coca-Cola South East Africa7 Coca-Cola Peninsula Beverages (Pty) Ltd.8 Hosaf a division of KAP Diversified

Industrial Pty Ltd.9 Little Green Beverages10 Mpact Plastics11 Nampak Liquid Packaging12 New Age Plastics cc13 Nioro Plastics cc14 Pick n Pay15 Polyoak Packaging Group16 Purple Line Plastics (Pty) Ltd.17 Split Line Manufacturing cc.18 Tsitsikamma Crystal Spring Water (Pty) Ltd.19 Twizza (Azores Manufacturers)20 Woolworths Holdings (Pty) Ltd.

SHAREHOLDERS MEMBERS

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ASSOCIATE MEMBERS

PETCO Associate Members are companies, organisations and individuals who do not pay a recycling feeand, as part of the PETCO family, prescribe to our values. The Membership is valid for a year and mustbe renewed on a yearly basis.

At end-December 2016*, there were 55 Associate Members:

1 A whale of heritage route2 Akura3 Alfrehutch4 Appletiser SA5 Beauty and Son Recycling6 Betha Neland Consulting7 Beytell Belegging t/a Anti Waste8 Blue Acqua9 Bonke Abantu Recycling and Waste Management10 Brandhouse Beverages11 Dema Trans Waste Services12 Ekhmanzi Springs t/a Aquelle13 eLabel14 Enviroserv Waste Management15 Extrupet16 Garden Route Marketing17 Gontse Environment and Recycling18 Green Cape19 Green Cycle20 Green Edge Communications21 Green Recycle22 Hlobisa Enviro Waste23 usky24 Institute of Packaging South Africa25 Johannesburg Zoo26 Kaytech Engineered Fabrics27 Kimberly Recycling28 Krones Southern Africa29 Limwiz Management and Consulting30 Mama She's Waste Recyclers31 Move On Up 1061 t/a Waterval Minerale32 Mpact Recycling33 My Waste34 Oasis Water35 Perfect Water36 Pikitup37 Postwink Recycling Products38 Propet39 Purea Fresh Water Co40 Recycling Solutions t/a Don't Waste Services41 Remade Recycling42 SC Johnson and Son Inc43 Sen li Da Chemical Fibre44 Silver Stars Trading45 South African National Bottled Water Association46 T-CUP47 The Eco-Smart Box t/a The Recycling Box48 The SOUL Foundation49 The Waste Trade Company50 Trashback51 Tswelangpele Co-op52 Tuffy Brands53 Unilever SA54 Waste Plan55 Wildlife and Environmental Society of South Africa

* PETCO is currently revising the Associate Membership programme, to be updated on an annual basis.

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CONTACTINFORMATION

Phone 0860 147 738Email info@petco.co.za

PET Recycling Company (NPC)PO Box 680Constantia7848

CAPE TOWN

Phone +27 (21) 794 6300Fax +27 (21) 794 6300

1st Floor, ICR House, Alphen Office ParkConstantia Main RoadConstantia

JOHANNESBURG

Phone +27 (11) 615 8875Fax +27 (11) 615 8874

Unit 3, Parade on Kloof132 The Parade, OrielBedfordview

@petco1ispet @1ispet @petco1ispet @1ispet

The PET Recycling Company is a not for profit company (NPC)