report by PMMI

TABLE OF CONTENTS

Look for these symbols throughout the PMMI 2010 Annual Report to link to more in-depth information.

“INNOVATION”: WORD OF THE YEAR

PMMI FINANCES & GOVERNANCE

PACK EXPO GETS RESULTS

EXPO PACK MÉXICO GROWS BY 15%

FOR GLOBAL UNDERSTANDING, MEMBERS COUNT ON PMMI

PMMI INCREASES YOUR BUSINESS INTELLIGENCE

GROWING YOUR TEAM

NETWORKING WITH MEMBERS, CONNECTING WITH CUSTOMERS

THE VOICE OF THE MARKET

LEADERSHIP THAT MAKES A DIFFERENCE

“INNOVATION”: 2010 WORD OF THE YEAR

If there were a “Word of the Year” award for processing and packaging, “innovation” would be the recipient, hands down. 2010 was the year our industry began recovering from recession, with the small steps likely to add up to stable growth. That in itself doesn’t imply innovation, and it was you, our members, who did the heavy lifting, seizing opportunities and building on your strengths. But PMMI is proud to have been there for you, and we’re proud the innovations that we, as an association, put in place have improved your businesses. The most visible of those innovations were found at PACK EXPO International 2010, which launched the incorporation of processing solutions into our show. Our focus was “solutions down the line,” and the 2010 show provided exactly that. Attendees searching for total systems solutions could find them at PACK EXPO. Just as important, attendees searching for new ideas and approaches could find those at PACK EXPO, too. In the conference sessions, we took a collaborative approach, working with industry organizations who understand their members’ educational needs better than anyone else. On the show floor, we introduced new pavilions and again, brought industry organizations in as sponsors. The result of this one-two collaborative punch was a more relevant PACK EXPO, a show that earned high marks from attendees and exhibitors. Before and after the show, PMMI staff and leaders were busy implementing the 2010 priority goals set by the Board of Directors:

■ With new association management software (AMS), similar to your customer relationship management (CRM) software, procured, we’re updating our databases to better serve you. The new system should launch in the first part of 2011. ■ Our Education & Workforce Development Committee, with help from the PMMI U team, came up with two online certification tests in the Mechatronics Certificate program. These tests will help you evaluate and train staff. ■ We dove into Phase 2 of PMMI’s environmental scan, learning more about our members and the best ways to help them. ■ And of course, we continued our work in the world of global markets, promoting our members with agent matchmaking and trade show pavilions abroad, providing international trade statistics and market data, and educating you on the global marketplace through the annual Export Conference held with our Annual Meeting. All of these projects have required innovation to succeed: looking at challenges from new perspectives to come up with solutions that are as creative as they are effective. It was a busy year, an innovative year, and in the end, a good year. Together, PMMI members are moving our industry into the latest incarnation of the new economy, and together, we’re right to be optimistic.

Glenn Siegele President, Omega Design Corporation 2010 Chairman, PMMI

Charles D. Yuska President & CEO, PMMI

PMMI 2010 ANNUAL REPORT | 1

PMMI FINANCES & GOVERNANCE Expenses Down, Revenues Up: 2010 Ends Well for PMMI In 2010, PMMI finished the year better than expected, especially considering the economic landscape in 2009. End of year figures show net assets from operations up by 37.1 percent over budget â&#x20AC;&#x201D; almost $1.2 million better than expected. Income from

investments came in at approximately $1.3 million, and PMMI will close the 2010 books $2,369,247 better than budgeted. 2010 was the second year in our two-year budget cycle, and one in which PMMI historically budgets for a surplus.

2010 FINAL

2010 BUDGET

BUDGET VARIANCE

% VARIANCE

REVENUES

$23,776,425

$22,945,995

$830,430

3.6

EXPENSES

$19,805639

$20,050,530

($244,891)

(1.2)

CHANGE IN NET ASSETS FROM OPERATIONS

$3,970,786

$2,895,465

$1,075321

37.1

INVESTMENTS

$1,293,926

N/A

CHANGE IN NET ASSETS

$5,264712

$2,895,465

$2,369247

81.8

PMMI 2010 Board of Directors EXECUTIVE COMMITTEE

CHAIRMAN Glenn R. Siegele President, Omega Design Corporation

VICE CHAIRMAN Nick Wilson Morrison Container Handling Solutions

DIRECTORS Jack Aguero* VP Business Development & Marketing, Pro Mach, Inc.

Ben Garvey General Manager, Garvey Corporation

Neal Nordling President & CEO, Multifeeder Technology, Inc.

Richard Bahr President & CEO, MGS Machine Corporation

Edward J. Gerri President, Digital Design Inc.

Mark Reichert President, A-B-C Packaging Machine Corp.

Jeffrey Bigger* President/Owner, MASSMAN Automation Designs, LLC

Sharron Gilbert President & CEO, Septimatech Group Inc.

Richard S. Schneider* President, Schneider Packaging Equipment Co., Inc.

Glenn Edginton President, All-Fill, Inc.

IMMEDIATE PAST CHAIRMAN James Anderson CEO, Marlin International

PRESIDENT & CEO Chuck Yuska PMMI

Richard P. Fox, Jr.* President & CEO, FOX IV Technologies, Inc.

Matt Lerner Executive Vice President, Automated Packaging Systems, Inc. Rocky Marquis President, MARQ Packaging Systems, Inc.

Michael Senske President & CEO, Pearson Packaging Systems Carol Shuttleworth* President/CEO, Shuttleworth, Inc.

*COMMITTEE CHAIRPERSON. SEE PAGE 3 FOR FULL COMMITTEE LISTINGS

2 | PMMI 2010 ANNUAL REPORT

2010 COMMITTEES GLOBAL MARKETING

BUSINESS INTELLIGENCE

Chairman: Carol Shuttleworth Shuttleworth, LLC

Chairman: Jack Aguero Pro Mach, Inc

Richard Armstrong Columbia Machine, Inc.

EDUCATION & WORKFORCE DEVELOPMENT

Dana Greenly Numatics

Glenn Edginton All-Fill, Inc.

George Hoff ITW Peerless

Kismet Fowler Nordson Corporation

Bill Alexander Cone Drive

Chairman: Jeffrey Bigger MASSMAN Automation Designs, LLC

Bob Kerr Wepackit2009, Inc.

Sharron Gilbert Septimatech Group Inc.

Bernhard Barta BluePrint Automation, Inc.

Richard Allbritton Elliott Manufacturing Co. Inc.

Patricia Andersen Delkor Systems, Inc.

Neal Konstantin PDC International Corporation

Mark Jacobson Econocorp, Inc.

Gregory Berguig Packaging Aids Corporation

Roger Altendorf Balluff Inc.

Mark Anderson Pro Mach, Inc.

Klaus Kraemer Rovema Packaging Machines

Bud Lane Axon Styrotech

Mark Flanagan Shibuya Hoppmann

Gregory Berguig Packaging Aids Corporation

Dave Martin Shibuya Hoppmann

Jo Anne Forman Sealstrip Corporation

Randy Cotteleer EPI Exact Packaging, Inc.

Mary Kay Bendis Morrison Container Handling Solutions

Matt Lerner Automated Packaging Systems, Inc.

Steven Hallblade MGS Machine Corporation

Len Dube Omega Design Corporation

Richard James Serpa Packaging Solutions

Ginny Fox 3M

John Kowal B&R Industrial Automation Corp.

Ben Garvey Garvey Corporation

Leif Lindblom Econocorp, Inc. Katherine Putnam Package Machinery Company, Inc. Ryan Schuelke Enercon Industries Corporation David Shepherd Switchback Group Scott Smith Hartness International Pat Vincent Arrowhead Systems, Inc. Jeff Wierenga Oystar Packaging Technologies Terry Woolford Smiths Detection Inc. Brad Worman Automated Packaging Systems, Inc

Jacob Garvey Garvey Corporation Paul Irvine Plexpack Corp. Tom Jensen B&R Industrial Automation Corp.

John Gray Piab Inc.

Timm Johnson Spee-Dee Packaging Machinery, Inc.

Greg Levy ARPAC

Mark Lovelace Dyco, Inc.

Barry Meyer Wexxar Packaging Inc.

Mike Odom Thermo Scientific

Neal Nordling Multifeeder Technology, Inc.

Michael Senske Pearson Packaging Systems

Leo Petrokonis Rockwell Automation

Ken Sullivan Delkor Systems, Inc.

Adam Rosenthal Bosch Packaging Technology

Wendy Telford

Richard Ryan Dorner Mfg. Corp. Gary Saunders Magnum Systems, Inc.

Bob Trimpe Oystar Jones MEMBERSHIP

Keith Schafer Nordson Corporation

Chairman: Rick Schneider Schneider Packaging Equipment Co., Inc.

Alan Shuhaibar BellatRx Inc.

Brian Barco H.B. Fuller Company

Chuck White Econocorp, Inc.

Ronald Downing George Gordon Associates, Inc.

Steve Windham Omron Electronics LLC

Edward Gerri Digital Design Inc.

Timothy McCarthy Kinsley Inc.

Rocky Marquis MARQ Packaging Systems, Inc.

Jim O'Keeffe Septimatech Group Inc.

Zoran Momich Z Automation Company

Nick Osterholt Sidel Inc.

Thomas Riggins Oystar Packaging Technologies

Frederick Pfleger FP Developments, Inc.

Audrey Waidelich Heat and Control

Scott Reed ADCO Manufacturing, Inc.

TRADE SHOW STRATEGY

Mark Reichert A-B-C Packaging Machine Corp.

Chairman: Mark Jacobson Econocorp, Inc.

Tom Riley Chase-Logeman Corporation

Serge Berguig Packaging Aids Corporation

Keith Tucker Compacker Systems, LLC

William Crist Kliklok-Woodman

Chris Wilson Morrison Container Handling Solutions

Richard Fox, Jr. FOX IV Technologies, Inc.

SHOW

Paul Irvine Plexpack Corp.

Chairman: Richard P. Fox, Jr. FOX IV Technologies, Inc.

John Kowal B&R Industrial Automation Corp

Serge Berguig Packaging Aids Corporation

Matt Lerner Automated Packaging Systems, Inc.

Konie Brenneman KRONES Wilhelm Bronander Scandia Packaging Machinery Co. Emmanuel Cerf Polypack, Inc. William Crist Kliklok-Woodman

Glen Long Delkor Systems, Inc. Bernard McPheely Hartness International Nancy Wilson Morrison Container Handling Solutions

PMMI 2010 ANNUAL REPORT | 3

PACK EXPO GETS RESULTS

PACK EXPO 2010 SHOW RESULTS ATTENDEES*

43,982

EXHIBITOR PERSONNEL*

20,537

TOTAL ATTENDANCE

64,519

INTERNATIONAL ATTENDANCE

4,404

NUMBER OF EXHIBITING COMPANIES

1,835

NET SQUARE FOOTAGE

1,054,505

*Includes CPP EXPO CLICK HERE FOR FULL REPORT

Processing Zone Sells Out!

Innovation Discovery Builds CPG-Exhibitor Connections PACK EXPO’s Innovation Discovery program helps consumer packaged goods companies’ (CPGs) innovation teams quickly and efficiently uncover packaging developments, technologies and ideas to shorten speed-to-market times, heighten shelf appeal, extend product freshness, ensure product safety and improve sustainability scores. In 2010, 17 CPGs enjoyed benefits of participating, including customized trends presentations, access to the show floor and conference sessions, meeting room access and assistance arranging meetings with exhibitors on request. Innovation Discovery 2010 Participants ■ Abbott Laboratories ■ Campbell Soup Company ■ Coca Cola Enterprises, Inc.

■ Kraft Foods

■ ConAgra Foods

■ Mars Petcare/Mars Chocolate

■ General Mills, Inc.

Nearly 25 percent of the exhibitor base displayed processing solutions, and they bought out The Processing Zone. There was success all over the show, and it’s no wonder exhibitors lined up to reserve space PACK EXPO Las Vegas 2011. No booth yet? Visit Packexpo.com to get started.

4 | PMMI 2010 ANNUAL REPORT

■ Johnson & Johnson Pharmaceutical R&D ■ Kroger

■ Great Lakes Cheese Co. Inc.

■ MillerCoors

■ The Hershey Co.

■ PepsiCo/Frito-Lay, Inc.

■ H.J. Heinz Co. ■ J.M. Smucker Co.

■ Nestle Business Services

■ S.C. Johnson & Son

The Brand Zone: Containers, Materials & Winning Brands The Brand Zone, home to containers and materials that shape winning brands, took the packaging/marketing connection to new levels with a host of special features. ■ The Showcase of Packaging Innovations®, sponsored by The Dow Chemical Company, displayed award-winning packages from a record 19 organizations from around the world. ■ The finalists in the 5th Annual PACK EXPO Selects™ were on display, and voting was open. KOLD-TO-GO Thermal Insulated Pouches, submitted by Coldkeepers, LLC, took the top prize in this very tight race. ■ PACK EXPO opened attendees’ and exhibitors’ minds to the future of packaging with Project 2020: The Consumer Experience, sponsored by DuPont. The special area within The Brand Zone featured The Package of the Future Competition and educational sessions on augmented reality, and its current and future effects on packaging and marketing, by consultancy Iconoculture. For The Package of the Future competition, PMMI challenged the package design community to envision packages and products likely to be found in stores in 2020; finalists’ prototypes were displayed in The Brand Zone. The

The Confectionery Pavilion, sponsored by the National Confectioners Association (NCA), was just one of many sweet spots at PACK EXPO International 2010.

PACK EXPO International 2010 drew over 4,400 international attendees from 125 countries, including 46 buying delegations. Learn more about PMMI's global marketing efforts on page 8.

winner was Bailey Brand Consulting’s “Soapstix,” and the designer won a software package provided by ESKO Artwork. ESKO also provided prizes for the remaining finalists.

In 2011, It's All About Your Customers Beginning with PACK EXPO Las Vegas 2011, PMMI is making a great show even better. We’re going beyond exceptional customer service and moving into an attitude that’s all about giving your customers — the attendees — the greatest possible return on their time. It starts with making it easier to get

oriented on the show floor. Pavilions, lounges for buyers in specific vertical markets, and Innovation Stage educational sessions on the show floor are just a few of the features you can expect at the customer-centric at PACK EXPO Las Vegas 2011.

PMMI 2010 ANNUAL REPORT | 5

PACK EXPO GETS RESULTS Value, Relevance & Partnerships PACK EXPO International 2010 expanded upon the pavilion concept, with new features including the Processing Zone, the Confectionery Pavilion and the Chicago debut of The Brand Zone. By partnering with a range of industry associations PACK EXPO, added depth and relevance, and created a more meaningful experience for attendees. The Association of Independent Corrugated Converters The Corrugated & Packaging Solutions Showcase promoted the association and exhibiting members, and AICC also participated in the Responsible Packaging Booth, found in the Association Pavilion. The Grocery Manufacturers Association The Manufacturing Excellence Conference, co-located with PACK EXPO International, focused on the critical issues of operational reliability, product safety and sustainability. The Institute of Packaging Professionals The Packaging Learning Center conference program included sessions on top-of-mind topics, such as sustainability and food safety. National Confectioners Association The processing expansion also led to the debut of the Confectionery Pavilion at PACK EXPO, sponsored by the National Confectioners Association. This sold-out hub for confectionery-related suppliers provided the brand owners they serve with the processing and packaging equipment, materials and services necessary for excellence across the production line, faster product commercialization and growing sales.

6 | PMMI 2010 ANNUAL REPORT

During PACK EXPO International 2010, PMMI and the American Meat Institute (AMI) announced a joint study on packaging in the meat industry. Pictured here with Anne Halal, vice president convention & exposition services, AMI, are PMMI's Fred Hayes, director, technical services, PMMI; Jim Pittas, vice president, trade shows and Tom Egan, vice president, industry services, PMMI.

The NPTA Alliance (formerly the National Paper Trade Association) The NPTA Alliance’s DistriPak Pavilion made its PACK EXPO International debut with a focus on trends affecting paper, packaging and supplies distribution — trends that impact the entire packaging and processing supply chain. The Packaging Association The Packaging Association presented PAC Green Den, “Fast Tracking Sustainable Innovation,” a half-day panel showcase the latest in sustainability-supportive products to an audience of brand owners in a format that combined formal presentations with challenges from a panel of judges. Audience members voted for their favorites, and conducted private meetings with innovators. The Reusable Packaging Association RPA introduced its Reusable Packaging Pavilion and hosted a series of educational sessions and workshops.

EXPO PACK MĂ&#x2030;XICO GROWS BY 15% FOR 25TH EDITION EXPO PACK MĂŠxico 2010 Grows and Has Results to Match The 50 members companies who exhibited in the 1,200 square meter PMMI Pavilion enjoyed services including Internet connections, decorating package discounts and reduced booth fees.

The Mexican Packaging Association (AMEE) Packaging Week featured AMEEâ&#x20AC;&#x2122;s Packaging Congress, the 25th anniversary Envases Estelares awards, AMEEâ&#x20AC;&#x2122;s Sustainable Packaging Awards & a full conference program. Exhibit space increased 15% to 15,729 square meters, and 890 companies exhibited.

The Pharmaceutical Pavilion launched to support the marketplace thatâ&#x20AC;&#x2122;s grown 17 percent in just five years.

110 exhibitors participated in EXPO PACK Verde to promote solutions and technology that support recycling, reuse and reduction of packaging.

More than 90 attended the â&#x20AC;&#x153;Track & Trace Conferenceâ&#x20AC;? for pharmaceutical professionals, led by Rafael Gual, director of the Mexican Pharmaceutical Chamber (CANIFARMA), and Paul Osborne of Performance Pharma Tech.

Exhibitors from 20 countries & pavilions including Argentina, Canada, Chile, China, Colombia, France, Spain, Taiwan and the United States were in the spotlight at EXPO PACK MĂŠxico 2010.

21,402 qualified buyers, including an increase in Central American attendees..

Vision 2015 Mexico focus groups brought to light just how important innovation and flexibility are for Mexican packaging machinery end users.

Participating firms included Barcel, Con Agra Foods MĂŠxico, Herdez del Fuerte; Hershey MĂŠxico, Jafra Manufacturing, N Maz, Polinnova, Sabormex & Sigma Alimentos LĂĄcteos. 7 * 4 * 0 /

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PMMI 2010 ANNUAL REPORT | 7

FOR GLOBAL UNDERSTANDING, MEMBERS COUNT ON PMMI Global Marketing Adds Up PMMI's Global Marketing initiatives in 2010 paid off for members, connecting them with customers and sales agents around the world. Here’s how things added up:

117

3,301

82 17 50

230+ 1/2

3 23.9% 8 | PMMI 2010 ANNUAL REPORT

Unique Agents Database users. Searches on the Agents Database. Meetings conducted during PMMI’s Agent/Member Matchmaking Event at PACK EXPO International 2010. Countries represented during the agent/member matchmaking reception at PACK EXPO International. PMMI member companies whose agents took part in the 2010 Agent Seminar in Mexico City. Countries covered by Fact Sheets & Market Research on PMMI.org. Fact sheets include market information and forecasts for the food, beverage, and pharmaceutical industries, import duties and taxes, trade statistics, news on investment projects, links to research reports, and key economic indicators. Sales leads generated by PMMI for members through online and print marketing in Latin America. Portion of the PMMI membership that participated in at least one online country directory in 2010 — Latin America, China and/or Brazil. Members on hand for PMMI’s China Business Roundtable event at ProPak China 2010. Market consultant Franc Kaiser, InterChina Consulting, led the discussion, and PMMI members Linda Zhou, Nordson china, and Bill Hoagland, Squid Ink Manufacturing, contributed their success stories for an evening of market insight benefiting experienced as well as new-to-market exporters. Presentations are available on PMMI.org. International Trade Shows in 2010 for which PMMI produced and distributed Pocket Guides to help attendees find PMMI members on site: Total Packaging & Processing Exhibition (UK), EXPO PACK México and ProPak China. The jump in international attendance over PACK EXPO International 2008. The 2010 show welcomed 4,404 attendees, from 125 countries. Among them were a record 46 delegations (34 countries) participating in the U.S. Department of Commerce International Buyer Program.

PMMI INCREASES YOUR BUSINESS INTELLIGENCE Business Intelligence Downloads Up 30% PMMIâ&#x20AC;&#x2122;s Business Intelligence projects deliver data with practical applications â&#x20AC;&#x201C; intelligence you can use to learn more about their customers and strengthen their competitive advantage. Our goal is to identify key packaging trends and issues within industries PMMI member serve.

personal care and trends and advances in food packaging.

In 2010, PMMI published four new market segments studies, and as a result, business intelligence downloads at PMMI.org increased by 30 percent for beverage, flexible packaging,

With these improvements came an increased demand â&#x20AC;&#x201D; measured in download activity â&#x20AC;&#x201D; of 30 percent.

Benchmarking reports such as the Industry Compensation & Benefits Survey; the Financial & Operations Benchmarking Study; 17 Quickie Surveys and a newly redesigned Shipments study also delivered important actionable data.

MEMBERS PAY

NON-MEMBERS PAY

Personal Care

Free to Members

$3,500

Trends & Advances in Food Packaging

Free to Members

$3,500

Flexible Packaging

Free to Members

$3,500

Beverage

Free to Members

$3,500

International Markets

Free â&#x20AC;&#x201D; Member Exclusive, Comparable Value: $3500

INDUSTRY MARKET RESEARCH (VALUE: $17,500)

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5 I F ' J O E J O H T P G B O & O E 6 T F S .B S L F U 3 F T F B S D I 4 U V E Z U I B U & Y Q M P S F T U I F 5 S F O E T B O E " E W B O D F T J O ' P P E 1 B D L B H J O H

BENCHMARKING DATA (VALUE: UP TO $6,000)

$ 0 4 5 4 " / % & 9 1 & / 4 & 4 t * / 7 & / 5 0 3 : t 0 1 & 3 " 5 * 0 / 4 t $ 0 4 5 4 0 ' ( 0 0 % 4 4 0 % t ' * / " / $ * " 3 " 5 * 0 4 t / & 5 4 " & 4 t ) 6 ." / 3 & 4 0 6 3 $ & 4 t 4 " & 4 t .& 5 3 * $ 4 t 5 3 " * / * / (

Financial & Operations Benchmarks

Free â&#x20AC;&#x201D; Available Only to Participating Members Comparable Value: $1500

Industry Compensation/Benefits Survey

Free â&#x20AC;&#x201D; Available Only to Participating Members Comparable Value: $1500

Shipments Study

Free to Participating Members Non-Participating Members: $1,000

$1,500

Free to Members

$1,500/year

' J O B O D J B M B O E 0 Q F S B U J P O T # F O D I NB S L J O H 4 U V E Z $ 6 4 5 0 . 3 & 1 0 3 5

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US Packaging Machinery Purchasing Plans Index TRENDS (VALUE: OVER $6,000)

7 * 4 * 0 /

Monthly Economic Indicator Reports (12 in 2010)