More standardization Potential specialization

March 2012 Managing Director Hubert Armbruster looks ahead to 2012 More standardization Potential specialization About one year ago, Hubert Armbruster took over as Head of Technology and Sales at KUHNE GmbH from Stephan Halstrick, who left the company for personal reasons. Previously, Armbruster worked for Finnish packaging specialist Huhtamaki for almost 19 years. KUHNE-News: Mr Armbruster, how was your first year at the other side of the table? Hubert Armbruster: Naturally, coming from a plastics processing company, my first year with machine manufacturer KUHNE was an intense learning phase. I was really impressed with the warm reception I received and the highly skilled team that helped to find my bearings. I would like to use this opportunity to thank all staff members. KUHNE-News: Can you give us a short summary of 2011 in terms of business? generated in the Blown Film Division, 60% with flat film lines. KUHNE-News: Will you be able to retain the same high level of incoming orders in 2012? Armbruster: No. We expect 2012 to be quieter and we anticipate a moderate sales volume. Our predictions are based on feedback from our customers, which tell us that the Euro crisis will restrict new investments for this year. KUHNE-News: How do you rate the booming markets in Latin America, Russia and China? Armbruster: Latin America in general and Brazil in particular are indeed a booming market for plastics processors. However, there are new trade restrictions that protect domestic companies and are CONTENT Maximizer: Less cooling ring More output Page 2 Seven-layer pilot plant in high demand Page 3 Three-layer sheet line about to be delivered Page 3 K-Tool: The tooling specialist Page 4 Largest water quench blown film line now onstream Page 5 Complete blown film lines now also in the US Page 6 Flexibility with a capital F Page 6 aimed at reducing imports. With the end of the global recession, Russia and the former GUS states have reemerged with a clear increase in demand. At the moment, China has not yet emerged as a major target market for KUHNE, as the market is full of domestic competitors. I expect the North African region to become increasingly relevant for us. Armbruster: Last year, we were faced with major challenges. As a result of having stepped up investments after the global recession, we had to cope with an immense backlog, which was aggravated by the fact that the general economic boom lead to difficulties in the procurement of vendor parts. We are very proud to have mastered this situation with success and happy to have increased our sales in 2011 significantly compared to 2010. KUHNE-News: Did both business divisions experience the same boost in orders? Armbruster: Yes. 2011 was a good year for both divisions, Blown Films and Flat Films. The balance has not shifted this year. About 40% of revenues are still 2011 was a good year for both divisions, Blown Films and Flat Films, Hubert Armbruster reports KUHNE-News: How have customer requirements changed? Armbruster: Requests for special lines are on the increase, particularly for blown film lines but also for flat film lines. KUHNE has been known to cater to special customer requirements. Versatility and room for individual customer specifications are at the top of our agenda. Close cooperation between our Blown Film Division and our subsidiary KUHNE Anlagenbau means that customers often benefit from very cost-efficient and technically advanced solutions. KUHNE-News: What are your objectives in terms of development for this year? Armbruster: As a former processor, I am familiar with the market s requirements Page 1

for flat film lines for thermoforming applications. Hence, my main focus in this area is on a certain standardization of our machine concept. I would like to establish a flat film expert team which specializes in the development of a standard concept for in-line thermoforming lines based on the experiences made with hundreds of lines installed by KUHNE. KUHNE-News: How does standardization fit in with an increased demand for special lines? Armbruster: Perfectly. Both approaches do not contradict, but complement each other. Standardized lines are the perfect alternative for producing thermoforming parts, as they are readily available and inexpensive. Special lines are developed at our technical center, where we conduct intense pilot runs together with our customers. Based on the results, we are able to build tailormade lines. This is particularly important for the flat film segment. The market for blown film lines has different requirements: here, we generally deliver special lines. KUHNE-News: What are your business plans for 2012? Armbruster: After the turbulent times of 2011, we intend to act calmly and do our homework, which means: we will continue to adapt our line technology across the range to market requirements so as to meet our customers specifications with perfect products. Line concept for FFS bags impresses customers all over the world Maximizer: Less cooling ring More output The market is impressed with the line concept for the production of FFS bags developed by the Blown Film Division of KUHNE GmbH. Four years after its launch, the manufacturer has already sold 15 lines to customers all over the world. Only recently, two renowned German packaging film producers ordered one line each for facilities in Poland. The two three-layer blown film lines recently ordered are typically configured for the production of 25 kg bags to be filled with plastic pellets. Over the past few years, the demand for these bag types has been rising steadily, as they have been replacing paper bags not only as containers for plastic pellets. While one of the two lines is operated in an off-line configuration, the other customer is operating a blown film line in an in-line configuration complete with printing unit and mechanical gusseting device both engineered by KUHNE. Both lines have a high output rate of between 270 and 360 kg/h, running a 180 mm die The winder is one of the highlights of the FFS line: it is suitable for roll diameters of up to 1,500 mm Thanks to the Maximizer s enormous cooling capacity, this FFS film has optimum mechanical characteristics head. The produced film is made from Metallocene or LLDPE formulations and has a double layflat width of between 450 mm and 580 mm and a thickness of between 80 μm and 160 μm. The high output rate of this tailor-made three-layer KUHNE blown film line is down to the specially developed highoutput Smart Lip Maximizer cooling ring. The Smart Lip Maximizer is a singlestack cooling ring with a very high cooling capacity. Conventional blown film lines can only generate comparable rates by using dual stack cooling rings, which require higher setup times and are less versatile in their application. Another impressive benefit of KUHNE s cooling ring is the fact that it can improve the properties of the blown film. Films produced on KUHNE lines have optimum thickness tolerances and their dart drop value is 12% lower. Another highlight of these lines is their special take-off system with a sophisticated precooling system and the FP 508 gap/contact/center winder which is suitable for roll diameters of up to 1,500 mm. The precooling system consists of two nip assemblies and four chill rolls. Prior to the final lay flat of FFS film in the secondary nip assembly, it passes through the top nip, operating with a gap, and through all four chill rolls. This configuration ensures that the film is well chilled before it enters the secondary nip assembly so as to prevent edge breakage as the edges are a weak point during filling in FFS plants. Page 2

Four extruders feed the different melt types into the lamella feed block Different customers have already started trials, running their own materials on KUHNE s high-end line for seven-layer film (sheet) production Readily available for research projects and customer trials Seven-layer pilot plant in high demand Only recently, KUHNE s Flat Film Division started the operation of its high-end pilot plant which is already in high demand. Different customers have already run trials with their own material, while KUHNE has conducted further research into a joint project for the development of a system for on-line layer thickness gaging. The rising demand for multi-layer lines inspired KUHNE to set up a seven-layer coextrusion flat film line at its technical center, so as to provide customers with insights into near-production conditions. The line with a maximum overall output of 1,500 kg/h is equipped with four extruders. The first K 45 coextruder, 24 D long, plasticizes the central barrier layer, while the second coextruder of the same type produces the two bonding layers that enclose the barrier layer. The main extruder, a KHS 70EE-33 D high-speed extruder with a screw speed of up to 1,500 rev./min, feeds the subsequent main layers. In multi-layer films these layers normally contain regrind from waste web scrap. A KHS 60EE 33 D high-speed extruder, which, like the KHS 70EE-33 D, is equipped with a degassing unit, provides the virgin material for the two surface layers. The central element of the line is the patented lamella feed block, which not only ensures precise adherence to the required layer thickness, but also allows the buildup of different layer types. The entire line is distinguished by its low energy consumption, which is achieved by the systematic deployment of synchronous torque and AC direct drives, among other energy-efficient equipment. A data management system records the line s total energy flow, which allows customers to gather intelligence on energy efficiency. The pilot plant also provides a testing ground for a cooperative project for the development of a system for on-line layer thickness measurement, which is conducted by the Fraunhofer Institute for Laser Technology (ILT), the Institute for Plastics Processing (IKV), both based in Aachen/Germany, Octagon Process Technology GmbH based in Würzburg/ Germany, Elovis GmbH, of Karlsruhe/ Germany and A+C Plastic Kunststoff GmbH based in Eschweiler/Germany. The project is coordinated by the IKV, Turkish customer orders coextrusion line with an output of 800 kg/h Large three-layer sheet line to be delivered in June In the next three months, a new, large three-layer sheet line will be set up in the assembly hall of KUHNE s Flat Film Division. After a two-week test phase, this line will be installed at a Turkish customer s site. The line is suitable for the production of HDPE or PP sheet with a thickness of up to 30 mm. These products are widely used for chemical tanks and construction engineering. The line is equipped with a K150-36D main extruder which also acts as a research partner and already operates one such system. The ILT developed the prototype of the new gaging system, while Octagon manufactured the gaging system, which is equipped with a measuring head developed by Elovis. A+C is already testing the system on one of its blown film lines. The KUHNE flat film line is the second testing ground for this new system, which offers an innovative on-line measuring method for gaging the layer thickness of multi-layer films, a very interesting application for ensuring the adherence to tolerances, particularly when expensive raw materials such as barrier materials are being processed. In the long run, the project partners envisage the development of a layer thickness distribution control system. for the central layer and a K90-30D coextruder for the two surface layers. The die head and downstream equipment are configured for a maximum sheet width of 2,200 mm in conjunction with a sheet thickness of less than 15 mm, and for 2,000 mm in combination with a sheet thickness of between 20 mm and 30 mm. At the beginning of June, the customer will start extensive trials and staff training seminars at KUHNE s facility. Page 3

In 2012, the share of external products in the overall production volume is to rise to 20% K-Tool: The tooling specialist This year, we aim at keeping or even improving on our very positive result of our first year, Mario Quadt, Managing Director of K-Tool GmbH sums up his plans for 2012. Since the beginning of 2011, the latest member of KUHNE- Group has been manufacturing all core components of extrusion lines such as screws, barrels, feed blocks and die heads at its own production site in St. Augustin/Germany. The metal working shop with thirty staff members specializes in the production of extrusion dies such as sheet dies with a width of 4 m, feed blocks and multilayer die heads for up to eleven layers. K-Tool also manufactures screws with complex shearing and mixing sections. For these engineering tasks, the company is equipped with state-of-the-art machinery, which is in a class of its own particularly in terms of production speed, precision and cost-efficiency. K-Tool mainly manufactures extrusion components for members of the KUHNE- Group, for KUHNE GmbH with its Flat Film and Blown Film Divisions, for KUHNE Anlagenbau GmbH and for American KUHNE. In addition to this, K-Tool delivers tooling products according to the customer s plans and machine components for external lines, which underlies a non-disclosure agreement. In 2011, external products accounted for 10% of our production volume. This year, we would like to increase this amount to about 20%, Quadt explains. The young company has ideal prospects, as customers were very happy with their products from St. Augustin. In its first business year, K-Tool reported revenues of 4 Mio., up by one third on their expectations for 2011. The fact that we outperformed our own prediction last year, proves that the new corporate concept is right. The positive result is certainly based on the very good general order situation in the plastics machinery market. Our objective for this year is to retain this result, Quadt says. With state-of-the-art machines, K-Tool GmbH manufactures extrusion dies, feed blocks and multi-layer die heads as well as screws and barrels Page 4

KUHNE Anlagenbau is leading the market for water-cooled blown film lines Largest water quench blown film line now onstream On 1 March, 2012 Vacufol GmbH of Bad Grönenbach/Germany started operation of a KUHNE seven-layer coextrusion blown film line with water cooling. The line with an output of 1,200 kg/h is the largest water quench line ever built in St. Augustin. In addition to its impressive output, it is distinguished by many optimized line components. All active lines mentioned above are nine-layer lines capable of producing products without the need for complicated setup changes. Every line delivers an output of up to 150 kg/h and produces film with a thickness of between 20 μm and 100 μm and a double layflat width of between 100 mm and 700 mm. Vacufol is very happy with the lines made by KUHNE Anlagenbau, as they promote the young company s growth thanks to the high quality of the produced film. Recently, Vacufol acquired its fifth line, a water quench seven-layer line with an impressive output of 1,200 kg/h for film with a thickness of between 70 μm and EVOH or PET as an option. A 125 mm extruder delivers the PE or CO-PP sealing layer. Every extruder is equipped with a melt pump to ensure a constant and even melt flow. In combination with a special die head, this configuration increases the water quench line s output by 50% compared to conventional lines. The die head with an impressive weight of 12.5 tons, is distinguished by its size. Its design is based on a 800-mm die and has a diameter of 1,500 mm, which means that the film requires only minimal blow-up. In contrast to conventional blown film lines where a blow-up ratio of more than 2.0 is considered normal, this system s blow-up ratio amounts to only 1.2. This way, we are able to produce a particularly impressive property profile, says Managing Director Jürgen Schiffmann. Even when cost-efficient virgin material is used, the film is highly amorphous and presents only minor pre-orientation. Hence, these die heads provide an excellent gloss and high transparency. At relatively low temperatures, the film can be thermoformed more easily and deeper. Another special feature of this line is its non-reversing take-off system. The winder platform rotates so as to facilitate the haul-off of higher film thicknesses and to allow equalizing of film gage tolerances. The calibration unit is also configured for high film thicknesses of more than 200 μm and operates with a particularly high cooling rate, which prevents the film from tearing off despite its significant thickness and the top-to-bottom extrusion direction. The large die head and the resulting small blow-up ratio allows the production of film with an impressively wide property profile Vacufol specializes in packaging requirements of the food and pharmaceutical industries and has been producing EVOHbased shrink film and shrink bags, PP/ PA-EVOH-PA/PE lidding and thermoforming films and vaccum bags since its establishment two years ago. From the very beginning, Vacufol has been relying on KUHNE Anlagenbau s extensive expertise in engineering water-cooled blown film lines and is already running four TripleBubble lines for the production of biaxially stretched food film for fresh meat and cheese. 500 μm and a double layflat width of up to 1,500 mm. The line has a total of seven extruders: six single-screw extruders with a screw diameter of 70 mm plasticize the required barrier layers and the surface layers processing PA, PE, PP, We were able to build such a complex, high-end line thanks to our substantial experience with water-cooled blown film lines. With more than 80 installed Triple- Bubble and water quench lines, we are leading the global market, Schiffmann explains. The new line for Vacufol has another benefit: all components such as machine platform and manifold system are designed to allow retrofitting of the line for producing film with up to eleven layers. Page 5

KUHNE with new Vice President Tom Helming and more extensive product portfolio Complete blown film lines now also in the US In November last year, American KUHNE Inc. of Ashaway/Rhode Island extended its portfolio of machines for film production. Since its setup in 1997, the subsidiary of KUHNE GmbH has become well established in the US with tailor-made extruders for a variety of applications and extrusion lines for medical products. Now American KUHNE also offers complete blown film lines made in Germany to US customers. Tom Helming, acclaimed blown film expert with more than 25 years of experience in product and sales management in this segment, is at the head of the new business division. Peter KUHNE, Managing Director of KUHNE GmbH in Germany: Over the past few years, KUHNE s three line types of SmartBubble for coextruded film, TripleBubble for biaxially oriented film and Cool-Bubble for special film have put the company firmly on the map as a leading innovator in Europe. Now is the ideal time to make this new technology available to our customers in the US. We are delighted to introduce Tom Helming as a competent partner with a vast amount of experience to our customers. Customers responded positively to the extended product portfolio. The first blown film line has already been ordered and another US customer is coming to St. Augustin, in order to run material trials at the German company s technical center. US customers interested in blown film lines are welcome to contact the acclaimed blown film expert Tom Helming KUHNE hosts Open House during Drupa and Plast Milan Flexibility with a capital F Customers are invited to visit the KUHNE technical center at St. Augustin/Germany from 30 April through 11 May, 2012, to view two blown film extrusion lines in live operation and discuss their individual concerns with experts. During Drupa, From 30 April through 11 May, 2012, the Blown Film Division invites customers to view a live machine demonstration at St. Augustin/Germany which takes place from 3 May through 16 May, 2012 in Düsseldorf/Germany, and Plast Milan, which takes place from 8 May through 12 May, 2012 in Milan/ Italy, the Blown Film Division will present a standard blown film line for the production of PE monofilm for refuse bags or sacks and a five-layer barrier film and polyolefin film line to registered customers. The latter line is distinguished by its impressive flexibility, which allows the cost-efficient production of small production lots. The line is equipped with three 70 mm and two 60 mm extruders and configured for the production of film with a width of up to 2,000 mm and a thickness of between 20 µm and 250 µm. The special feature of this line is the fact that it allows the production of a variety of different products based on LDPE, Metallocene and EVA formulations as well as EVOH or PA. At the Open House event, this benefit will be demonstrated with the production of protective surface film, stretch hood film, label film, cheese wrap film with a PA layer and laminating film with EVOH layer. IMPRESSUM Publisher: KUHNE GmbH Einsteinstraße 20 53757 St. Augustin, Germany Phone: +49 2241 902-0 Service Hotline: +49 180 5902099 Telefax: +49 2241 902-180 Email: verkauf@kuhne-group.com Internet: www.kuhne-group.com No part of this publication may be reproduced without permission in writing from KUHNE GmbH. Page 6