Ternova Packaging 2023 Sustainability Report

Sustainable Innovation Sustainability Report 2023

Document Authorship

IRENE ALVARENGA – Head of Corporate Sustainability

GRACIELA LINARES – Content and Media Coordinator

GABRIELA CALMO – Senior Facilitator

Editorial Team

HUGO EDUARDO TONA – Sustainability Project Manager

RODRIGO SAMAYOA – Director of Corporate A airs and Sustainability

FERNANDO LÓPEZ – Head of Internal Creative Agency

Photographs ORGANIZATIONAL COMMUNICATION FILES

Writing and translation into English

HANA SZTARKMAN ARÁUZ

Diseño y diagramación

JORGE CARBALLO

GRACIELA LINARES - Content and Media Coordinator

We extend our gratitude to all the leaders who dedicated their time and e ort to provide and prepare the necessary information for the 2023 Sustainability Report.

A special thank you goes to Kelly Behrend for her invaluable external consulting. Her collaboration has been crucial to the success of this document.

2023 Sustainable Innovation

Ternova Group continually proposes new and be er ways of doing things, thus achieving solutions for a be er world, preserving life, caring for the environment and contributing to the prosperity of current and future generations.

2023 Ternova Packaging.

Ternova Packaging

Ternova Packaging is the ideal strategic ally for companies around the world that want to join the transformation of packaging with lower future environmental impact, adding value to their products and to their circular economy strategy.

For more than ten years, Ternova Group has been working to integrate sustainability throughout its business structure, in the constant search for solutions that optimize its capacity for continuous improvement and help the organization move forward. To do so, it relies on the value of innovation and on its work philosophy, capable of bringing about those changes in which it believes, seeks and, nally, accomplishes.

Ternova Group can proudly state that it continually reinvents itself to create value for the future, which helps it remain a leading sustainable exible packaging organization with operations in the Americas and Southeast Asia, commi ed to creating a be er world through sustainable innovation.

2 3 Introduction Sustainability Strategy Environmental Social Governance

About this Report

The Sustainability Report of Ternova Packaging, a business unit of the Ternova Group, provides a transparent and detailed overview of its sustainability practices and policies, as well as its impact on the environment, the economy and society.

This document covers all of Ternova Packaging’s operations that are related to the design, production and distribution of packaging with a lower environmental impact, a particular focus on reducing its ecological footprint, promoting circular economy and fostering inclusion and diversity within its value chain.

Scope

This Report includes all of Ternova Group’s packaging-related activities from January 1st to December 31st, 2023, in the Central American region, and considers all operating and administrative facilities where the production and design of packaging with lower environmental impact is performed or directly supported. This includes initiatives to minimize production waste, optimize the use of recycled and renewable materials, and improve energy e ciency in their operations. Labor practices, community involvement and engagement with suppliers and clients to promote sustainable practices throughout the supply chain are also examined.

The information presented in this Report has been compiled from meticulously documented records in the company’s internal archive. This document faithfully re ects the ndings related to sustainability, covering both positive and negative aspects, with the purpose of providing a comprehensive and authentic view on the performance of the di erent business units that make up Ternova Packaging, as well as the areas of Systems Management, Finance, Organizational Development, Human Talent Management, Logistics, Corporate A airs and Sustainability. This approach ensures complete transparency and facilitates a thorough understanding of our operations and their impact.

2023 Ternova Packaging.

TERNOVA GROUP

PACKAGING

TERNOVA INVESTMENTS

B2D/B2C BUSINESS UNIT

B2B BUSINESS UNIT

RECYCLING PLANT

REAL ESTATE

2023 Ternova Packaging.

TERNOVA

TERNOVA

TERMOEXPORT

CENTRAL AMERICAN SUBSIDIARIES

TERMO VIETNAM

Message from the CEO

Dear associates, partners and the community at large:

Ternova Packaging is proud to present its 2023 Sustainability Report, which demonstrates our strong commitment to sustainable innovation and the circular economy. Over the past year, Ternova Group has been honored with various recognitions that support its hard work in sustainability and innovation, which highlights its ethical and responsible approach to business.

We have implemented an innovative organizational structure, designed to e ciently ful ll our responsibilities and generate the necessary capabilities for sustainable growth. This transformation consolidates our position as a strategic partner in the region. At the heart of our operations is the virtuous circle of exible packaging, which maximizes e ciency and minimizes environmental impact.

Our commitment to sustainability is re ected in concrete actions such as the elimination of non-recyclable packaging, the incorporation of recycled material and the exploration of alternatives with bioplastics. In addition, the integration of sustainability throughout the Ternova Group structure has been constant for more than a decade.

This Sustainability Report provides a transparent and detailed overview of the sustainable practices and policies that characterize us. Recognized international guidelines, such as the Global Reporting Initiative (GRI) Principles and the Sustainable Development Goals (SDGs) of the United Nations, have been followed in drafting this Report, ensuring the consistency and comparability of the information presented.

This Report is a testament to our steadfast and ongoing commitment to a more sustainable future, and an invitation to all our partners, clients, and the community at large to join us on this journey. Together we are building a be er world through sustainable innovation.

Rodrigo Tona | CEO Ternova Group

2023 Ternova Packaging.

About Ternova Packaging

Ternova is a corporate group with operations in the Americas and Southeast Asia, constantly seeking sustainable solutions that can innovate, transform, and improve people's quality of life.

Through its three companies (Termoencogibles El Salvador, Termoencogibles Vietnam, and TermoExport), Ternova Packaging:

2 Operates on continents

Distributes its products in 4 continents

PRODUCTION PLANTS

1) Renova (Plan de la Laguna Industrial Zone, El Salvador).

2) Plan de la Laguna (Plan de la Laguna Industrial Zone, El Salvador).

3) Maquilishuat (road to La Libertad Port, El Salvador).

4) Merliot 1 and 2 (Merliot Industrial Zone, El Salvador).

5) Vietnam

COMMERCIAL OFFICES

1) Logistics and Distribution O ce, El Salvador

2) Honduras Subsidiary O ce, Tegucigalpa

3) Guatemala Subsidiary O ce, Guatemala City

4) Nicaragua Subsidiary O ce, Managua

5) Costa Rica Subsidiary O ce

6) Panama Subsidiary O ce

Values

Purpose: Framework

To transform and innovate for a be er world.

Mission:

We create smart and innovative solutions that contribute to the development of thriving people, and prosperous and sustainable businesses and societies.

To be international leaders in smart solutions and sustainable business that transform the world of tomorrow. Vision:

Integrity: We do what’s right.

Sustainability:

We preserve life, care for the environment and contribute to the prosperity of current and future generations.

Innovation: We continually look for new and be er ways of doing things.

Collaborative work: We combine e orts across functions, businesses and territories to generate value.

Customer oriented:

We strive to understand our clients, deliver value, and serve them in an extraordinary way.

People: Our commitment to human well-being is and always will be unwavering.

Global Presence: Reach and Expansion

Total employees:

1,918

El Salvador 1,706 >Termoencogibles: 1,682 >Termoexport: 24

Vietnam 170 Nicaragua 15

Guatemala 13 Honduras 8 Costa Rica 6

Ternova Packaging.

B2B Textile: Business Units: Diversification and Specialization

This Unit serves large clients in the textile industry, for whom the best packaging is designed and produced so that their brands stand out from the very rst moment. Thus, the packaging is the presentation le er of their garments to the customer.

Segmented B2B:

As part of the a ention to segmented industries, Ternova Packaging delivers products specially created for clients in various industries. This Unit focuses mainly on the food, mass consumption, home care, personal care and high-end products sectors, with packaging that stands out for having a high content of recycled raw materials and for being customized for a variety of applications.

The following are some of the products for which packaging is produced by the B2B Business Unit:

• Basic clothing

• Edible vegetable oil

• Cleaning chemicals

• Fresh or frozen vegetables

• Poultry and feed concentrates

• Dehydrated food

• Market bags

• Industrial films

Ternova Group cultivates excellent long-standing relationships with the industrial sector; these clients are supported as strategic allies and reliable experts within the value chain. They are provided with exible packaging that surpasses the primary function and allows them to deliver more a ractive, competitive products with less environmental impact, be ing together on the growth of their businesses in a responsible way before the nal consumer and the environment and evolving in the world of materials.

Mass Consumption Packaging

(B2C)

Ternova Packaging o ers innovative and sustainable solutions in the cargo bag market -also known as grocery bags- through exible packaging, which is compostable and has a lower environmental impact, a segment in which the company is a leader in the Central American region.

Ternova Packaging’s compostable packaging is an excellent sustainable solution, as it is made from plant-based resources and has the same strength and quality as conventional packaging.

This type of product helps the customer to take their purchases home and then reuse the packaging in a variety of ways.

Retail Packaging (B2D)

Ternova Packaging also serves the retail segment with its group of distributors, through which it covers most supermarkets and multiple stores in Central and Latin America.

2023 Ternova Packaging.

The Ternova Business System

The Ternova Business System is the system in charge of fostering the culture of innovation and maintaining the business operation under the concept of ambidextrous mentality.

This business management system that is able to enhance the capabilities of existing models for transformation and growth, while seeking to build capabilities and capture future opportunities in order to develop growing and sustainable value over time.

The characteristics of the System are of great value to the company:

Exploration of new businesses

The System is interested in its surroundings, understands its environment and uses reality as a starting point to motivate change.

Innovation ecosystem

It drives the exploration of new ideas and concepts and connects with other stakeholders to nd solutions.

Diversification strategy

Seeks multiple sources of added value to achieve a win-win exchange.

Culture

This is a culture of action, capable of motivating change in people by example.

Exploitation of the current business

The System inspires and incites action through its ability to see the impact of today on the future.

Global Alliances and Commitments

Ternova Group recognizes that collaboration and partnerships are fundamental to drive sustainable development. Therefore, it fosters collaborative work among various key players to create valuable connections, share knowledge and organize joint e orts, all with the aim of successfully addressing the most important sustainability challenges. This enables Ternova Group to exert a positive and sustainable impact to achieve signi cant and bene cial changes.

The Group’s alliances enable it to expand its reach in all areas of sustainability: the environment, full inclusion and decent work, among many others. The following are the associations and groups with which Ternova collaborates.

• Asociación Salvadoreña de Industriales (ASI)Salvadoran Association of Industrialists.

• Asociación Salvadoreña de la Industria del Plástico (ASIPLASTIC) - Salvadoran Association of the Plastics Industry.

• United States Agency for International Development (USAID).

• Cámara de Comercio e Industria de El Salvador (CAMARASAL) - Chamber of Commerce and Industry of El Salvador.

• American Chamber of Commerce of El Salvador (AmCham).

• Cámara de Industria de Guatemala - Chamber of Industry of Guatemala.

• Corporación de Exportadores de El Salvador (COEXPORT)

- El Salvador Exporters Corporation.

• Consejo Empresarial Salvadoreño para el Desarrollo Sostenible (CEDES) - Salvadoran Business Council for Sustainable Development.

• German International Cooperation - Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.

• United Nations Environment Programme (UNEP).

• Fundación Empresarial para la Acción Social (FUNDEMAS) - Business Foundation for Social Action.

• Fondo de Inversión Ambiental de El Salvador (FIAES)Environmental Investment Fund of El Salvador.

• Fundación Zoológica de El Salvador (FUNZEL)Zoological Foundation of El Salvador.

• Latitud R.

• Plan International El Salvador.

• Fundación Naturaleza El Salvador - Fundación Naturaleza El Salvador.

• Asociación para el Desarrollo de Costa del Sol (ADESOL)Costa del Sol Development Association.

Furthermore, Ternova Group has adhered to di erent global commitments, which help to maintain the highest standards of sustainability and to operate with transparency.

Global Commitments

• Business Coalition for a Global Plastics Treaty.

• The Global Commitment, with the Ellen MacArthur Foundation.

• UN Women: Women’s Empowerment Principles.

• United Nations Global Compact.

Corporate Awards: Celebrating Ternova’s Achievements

In 2023, Ternova Group was honored with several awards that validated its commitment and e orts in sustainability and innovation. These awards not only ratify the team’s dedication and hard work, but also evidence its persistence in conducting its business in a responsible and ethical manner.

Corporate Awards to Ternova Group

• “Pioneer company in promoting the Inclusive Recycling initiative, allowing the strengthening of the entire value chain,” awarded by USAID and FUNDEMAS.

• “Supplier of Excellence in Strategic Brands” by Walmart Mexico and Central America.

• Named by Summa Magazine as a “Business Giant” in the category of Multi-Central American company for its operations in Central America, Dominican Republic and Vietnam

• Recognized with the 2nd position of the top 5 as “Largest Plastic Exporter” in the Ranking of Industrial Exporters 2023 of the Salvadoran Association of Industrialists.

• Ranked 6th in the top 10 as “Largest Industrial Employer” in the Ranking of Industrial Exporters 2023 of the Salvadoran Association of Industrialists.

• Ranked 10th in the top 10 as “Industrialists with the highest local sales” in the Ranking of Industrial Exporters 2023 of the Salvadoran Association of Industrialists.

Corporate Recognitions to Rodrigo Tona, CEO of Ternova Group

• RRHH Digital and INCAE Business School recognized Rodrigo Tona as one of the most inspiring leaders in Central America and the Caribbean in 2023.

• Summa Magazine recognized him as a “Top Executive” in its ranking of Business Giants.

2023 Ternova Packaging.

Corporate Government

Ternova Group has an innovative organizational structure, designed to facilitate the ful llment of its responsibilities with greater e ciency, and to generate the necessary capabilities to grow without losing sight of the core business.

This important step in the transformation of the Group entailed a change in the organizational structure, which currently allows the ful llment of its tasks with the ambitious vision of consolidating itself as a strategic partner in the region and worldwide.

Currently, the organizational structure of Ternova Group is concerned with taking the company to the next level, sharing and facilitating knowledge for the construction of innovative solutions that open new doors and business opportunities for the industries.

Corporate Structure

Board of Directors >

External Management

Hugo Tona Gioli i

External Management

Arturo Tona Gioli i

External Management

Hugo Eduardo Tona

External Management

Arturo Alfredo Tona

External Management

Cristian Leñero

External Management

José Carlos Bonilla

External Management

Blanca Villela

Ternova Packaging Sustainability Committee

Steering Committee

The Steering Commi ee is the team at Ternova Packaging that directs and leads strategic planning, pro tability and diversi cation through operational excellence and corporate innovation.

Hugo Eduardo Tona

Miguel Argueta

Rodrigo Samayoa

Marcella Romero

Jorge Murillo

Irene Alvarenga

Raúl Aguilar

Rodrigo Tona CEO.

Jorge Murillo Commercial Vice President B2B One.

Juan Diego Tobar Commercial Vice PresidentB2C/B2D.

Eduardo Vidal Chief Financial O cer.

Raúl Aguilar Chief Supply Chain O cer

Miguel Argueta Chief Human Resources and Organizational Development O cer.

Evelio Escobar Regional Information Technology Manager.

Melania Parada Continuous Improvement and Innovation Manager.

Rodrigo Samayoa Director of Corporate Sustainability.

Marcella Romero Legal Manager.

Gabriela Flores

FP&A Corporate Manager

Sustainable Impact

Ternova Group’s commitment to sustainability is rooted in its DNA. Aware of the impact of its actions on the environment, each challenge is approached with a clear vision: to turn reality into a catalyst for change. This motivation arises from a deep understanding of the contexts in which it operates, and this awareness is used as a starting point to drive meaningful transformation.

With its proactive mindset, Ternova Group is determined to take the initiative and inspire others through the power of example. The Group’s approach focuses on fostering actions that have an immediate positive impact, while projecting the long-term bene ts of these decisions.

This holistic approach not only seeks operational excellence, but also aspires to be a beacon of positive change for society.

2023 Ternova Packaging.

Message from the Chairman of the Sustainability Committee

Dear reader:

It is an honor to address you in the framework of Ternova Packaging’s Sustainability Report 2023, where we proudly present the progress and achievements made in the past year. From my personal perspective, the topic of sustainability has always aroused my interest. Throughout my career, I have had the opportunity to delve deeper into this eld, exploring various facets and understanding its integral importance for economic, social and environmental well-being. Having the opportunity to develop professionally in this eld is a great satisfaction and motivates me to continue promoting initiatives that generate a positive impact on the environment.

Our goal at Ternova Group is to go beyond simply complying with sustainability standards: we seek to drive a transition to prosperity, where economic, social and environmental well-being will bene t. We rmly believe this is possible and are commi ed to contributing to this positive change.

During this sustainability journey, we have faced several challenges and opportunities that have allowed us to grow and evolve as an organization. We are commi ed to continuous improvement and adaptation to a constantly changing environment, and we believe that sustainability plays a fundamental role in this process. We hope you nd the information we share in this Report interesting and useful. We welcome any comments or suggestions you may have in this regard.

We thank you once again for your interest in the organization and its sustainability initiatives.

Hugo Eduardo Tona | Chairman of the Sustainability Committee

2023 Ternova Packaging.

Stakeholders

For Ternova Group it is important to understand the needs and expectations of its stakeholders, and it is a priority to address them in the best possible way. Various methods are used for stakeholder engagement such as meetings, surveys and events, where it is possible to interact and gain insights that help identify areas for improvement.

The stakeholder mapping process is considered crucial as it provides a clear direction for engagement activities and contributes to the sustainable success of the business in the industry.

The groups that Ternova Packaging considers stakeholders are as follows:

2023 Ternova Packaging.

Materiality

Materiality analysis is a key process in sustainability management. Being such an important point, Ternova Packaging takes advantage of this Sustainability Report to explain the topic, which shapes the priorities of its actions.

The materiality process consists of four steps:

1. Identi cation

2. Prioritization

3. Validation

4. Adoption

Validation

Discussion and validation of material issues, and alignment of expectations in terms of goals and objectives for the prioritized material issues. This analysis is performed by the Sustainability Commi ee along with the Steering Commi ee.

Adoption

Integration of a strategy that goes beyond the management of environmental aspects; it also involves the management of social and governance aspects (ESG) and the establishment of key indicators that help the organization to meet the goals set.

Identi cation

In this step, all material issues are identi ed through benchmarking with peer companies and those considered leaders in sustainability reporting, as well as with global organizations such as the World Business Council for Sustainability Development and the United Nations Global Compact.

An impact analysis of our value chain is performed to identify risks and opportunities to improve it and deliver a positive impact.

Stakeholders’ opinions and associated evidence are gathered through interviews, surveys and workshops to support the issues that the company should prioritize. Prioritization

The most important issues for internal and external stakeholders, according to the above analysis, are the following:

• Carbon emissions reduction

• Energy e ciency

• Renewable energy

• Water management

• Circularity

• Diversity and inclusion

• Human rights and fair working conditions

• Talent management and transformational capacity

• Occupational health and safety

• Employee wellness

• Community impact programs

• Business ethics and transparency

• Regulatory compliance

2023 Ternova Packaging.

CARBON EMISSIONS REDUCTION TEMA MATERIAL IDENTIFICADOR

ENERGY EFFICIENCY

RENEWABLE ENERGY

WATER MANAGEMENT

OPERATIONAL WASTE

BIODIVERSITY

DEFORESTATION

CIRCULARITY

OCCUPATIONAL HEALTH AND SAFETY

EMPLOYEE WELL-BEING

DIVERSITY AND INCLUSION

HUMAN RIGHTS AND FAIR WORKING CONDITIONS

TALENT MANAGEMENT AND TRANSFORMATION CAPACITY

LOCAL SOCIOECONOMIC DEVELOPMENT

COMMUNITY IMPACT-ORIENTED PROGRAMS

VALUE CHAIN DEVELOPMENT

RESPONSIBLE MARKETING AND CONSUMPTION

CORPORATE GOVERNANCE

BUSINESS ETHICS AND TRANSPARENCY

RISK ANALYSIS

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MATERIALITY MATRIX

IMPORTANCE FOR BUSINESS CONTINUITY

Sustainability Strategy

Ternova Packaging’s Sustainability Strategy promotes comprehensive sustainability compliance planning.

By hi ing the target with its strategy, the organization produces a positive impact, reduces the environmental footprint and improves the quality of life of those around it, creating businesses based on values of integrity and ethics.

Ternova Group de nes sustainability as “A balance between economic growth, environmental conservation and social well-being, which guarantees a long-term business model”.

• Economic impact

• Environmental impact

• Social impact

2023 Ternova Packaging.

Sustainability Strategy Framework

Sustainability Champions: Leadership in Action

The purpose of the “Sustainability Champions” is to consolidate and enhance Ternova Packaging’s Sustainability System, thus ensuring the e ective achievement of the established goals. One of the key priorities of the Sustainability Champions is to ensure the reliability and accuracy of the information collected and reported. This task is crucial to support the integrity of sustainable initiatives and to promote responsible practices in all relevant aspects of the organization.

The responsibilities assigned to this role include the following:

• Data quality assurance.

• Se ing objectives.

• Planning and execution.

• Reporting of progress.

• Information management for reporting.

• Promoting sustainable culture.

• Implementing initiatives.

This integrated approach not only reinforces the Sustainability System, but also develops a culture of responsibility and participation among employees, which is essential for achieving long-term sustainability objectives.

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Fulfillment of the

Ternova Packaging is rmly commi ed to the global sustainable development agenda, strategically integrating the Sustainable Development Goals (SDGs) into its operational and strategic core. Through speci c initiatives and focused corporate policies, signi cant progress has been made on SDGs 5, 6, 7, 8, 10, 12, 13 and 16, demonstrating the organization’s commitment to building a sustainable and equitable future.

Environmental Impact

“Leaving the world be er than we found it” is one of Ternova Packaging’s ideals. Therefore, much of its management focuses on combating climate change and minimizing plastic waste at all stages of its life cycle, as part of the company’s environmental responsibility.

Some of the strategic approaches to environmental management are as follows:

• Reduction of carbon emissions: ght against climate change.

• Energy e ciency: e ective use of energy and innovation.

• Renewable energy: sustainable energy system that generates electricity for its operations.

• Circularity: limit plastic waste, encourage reuse and the recycling process.

• Water stewardship: promoting sustainable water management for a prosperous future.

2023 Ternova Packaging.

Reducing Carbon Emissions: The Road to a Sustainable Future

1. Energy E ciency Project (more information can be found in the Energy E ciency section).

2. Optimization of the external and internal distribution footprint with the use of higher capacity transportation equipment.

3. Eco-e cient Driving Project, aimed at internal drivers and transportation providers.

4. Round-trip logistics between sites (combination and return loads/merging of loading and unloading services).

5. Project to reduce the use of refrigerants and switch to more e cient air conditioning units.

Since 2018,

Ternova Packaging became the rst Salvadoran exible packaging company in Central America to obtain Carbon Neutral Certi cation. This certi cation means that the organization has established activities to reduce, o set or eliminate the carbon dioxide (CO2) emissions it produces.

Ternova Packaging continued with the focus on maintaining its Carbon Neutral Certi cation, for which initiatives were developed in the following areas: For 2023,

Emissions are o set by the “Project to Reduce Greenhouse Gas Emissions in the Production of Plastics Made Mainly from Postconsumer Recycled Plastics.” The purpose of this project is to recover and recycle plastic materials (high and low density polyethylene and polypropylene), which prevents these materials from reaching nal disposal sites such as land lls, and to process these wastes as intermediate or nal products, thus avoiding the production of virgin materials and displacing the use of energy in the process.

Ternova Packaging has decided to multiply its e orts to minimize environmental impact and limit global warming to 1.5°C, in line with the Paris Agreement, and has therefore decided to join the Science-Based Target Initiative (SBTi) to achieve the Net-Zero standard.

Ternova Packaging.

The greenhouse gases emi ed by the organization, according to their source, are as follows:

Fossil fuel consumption

Fugitive emissions - refrigerants

Fugitive emissions - extinguishers

Process leakage Electrical energy consumption

The total emissions for each source, expressed in tCO2e, are shown below: *

Fossil fuel consumption

Fugitive emissions - refrigerants

Fugitive emissions - extinguishers

Process leakages

Subtotal (direct emissions)

Electricity consumption

Subtotal (indirect emissions)

Total (direct emissions + indirect emissions)

* Information subject to review by a certi cation body.

Energy E ciency: Less Consumption, More Future

Energy Consumption: Optimization and Improvement

Ternova Packaging monitored electricity consumption at all its facilities in order to evaluate the energy performance of each plant, identify opportunities for improvement in processes, machinery and equipment, and set targets for reducing consumption.

Mass Consumption >

In the Mass Consumption plants, and in line with the objectives established for 2023, di erent initiatives were carried out to reduce electricity consumption, among which the following stand out:

• Improving production processes by increasing Overall Equipment E ectiveness (OEE).

• Modernization of machinery technology to increase productivity and reduce electricity consumption starting from machinery design.

• Improvements in extrusion technology to achieve greater energy e ciency.

• Optimization of the use of peripheral equipment to reduce electricity consumption.

Electricity Consumption of the Plan de La Laguna Plant

Through these actions, in 2023, a reduction of 6% of the total electricity consumption of the production plants was achieved.

Likewise, in 2023 the following was achieved:

• Alignment of objectives and work plans of all production plants for the energy e ciency objectives for the next 3 years.

• Start of energy e ciency project in peripherals and photovoltaic generation.

• Reduction in total kilowa consumption with respect to 2022.

Through these initiatives, an annual reduction of 133,000 kW was achieved by improving energy e ciency in the Mass Consumption production plants.

2023 Ternova Packaging.

Flexible Packaging >

Electricity consumption in the Flexible Packaging plants was monitored, resulting in an increase of 41,000 kW in 2023 versus 2022, representing an increase of 6%.

In the second half of 2022, the B2B business unit experienced a reduction in average monthly production load from 2,647 tons to 1,895 tons, representing approximately 28%. In 2023, the load leveled o and managed to rise to a monthly average production of 2,043.97 tons. This resulted in a higher production load on the equipment, which logically had an impact on electricity consumption.

Consumption of the Recycling Plant

The Recycling Plant >

Energy e ciency studies were initiated at the Recycling Plant to evaluate the current state of its energy consumption, both for the main machinery and the processes used. These studies will allow us to identify both the possibilities for energy savings and the improvement plan to be implemented for reducing electricity consumption.

2023 Ternova Packaging.

Renewable Energy: A Sustainable Electricity Generating System for the Operations

In 2023, the foundations were laid to implement renewable energy projects through the use of photovoltaic panels at the Plan de la Laguna and Merliot production plants. This initial step represents a rm commitment to sustainability and carbon footprint reduction and is in line with global trends in clean and renewable energy.

The project is currently in the crucial technical feasibility stage, where detailed assessments are being conducted to determine the viability of installing solar panels. This analysis includes inspecting site conditions, estimating solar power generation capacity, calculating implementation costs, and projecting long-term environmental bene ts. Regulatory aspects and local incentives for renewable energy are also considered, ensuring that the project is not only feasible from a technical perspective, but also sustainable.

The incorporation of renewable energies in these plants has the potential to signi cantly transform their operations by reducing dependence on fossil fuels, minimizing operating costs associated with energy consumption, and making a positive contribution to the environment by reducing greenhouse gas emissions.

Raw materials:

Creation of new raw materials that reduce the amount of virgin plastic used.

Circularity: Limiting Plastic Waste, Encouraging Reuse and the Recycling Process

Design:

Creation of solutions specially designed for recyclability, without losing their e ciency and quality characteristics, allowing brand owners to have more sustainable products.

Production:

Increasing process e ciency and reducing energy and raw material procurement costs.

The circular economy is one of the production models that make viable and guarantee sustainable growth over time. This model promotes the optimization of resources, the reduction in the consumption of virgin raw materials, recycling and the use of waste from the plant, giving them a new life to turn them into new products.

Ternova Group promotes a virtuous circle of exible packaging aimed at the circular economy: Virtuous Circle >

Distribution:

Be er logistics practices and techniques facilitate transportation and distribution, avoiding unnecessary and costly trips.

Consumption, use, reuse, repair:

Reducing consumption means distributing a product or service and extending its life to minimize waste and manufacturing. Repairing equipment avoids faster and cheaper waste conversion.

Collection:

Creation of the best reverse logistics network for all Ternova products.

Recycling:

Products maintain, in their composition, a reduced amount of di erent materials, facilitating the segregation process and making recycling processes more e cient.

Sustainable Innovation in the B2B Business Unit

Ternova Packaging is commi ed to guiding its partners in the transition to packaging options that are not only more e cient, but also environmentally friendly. In all regions where it operates, the company is at the forefront in the development of post-consumer recycled polymers (PCR) suitable for food contact.

Strategic approaches:

Work to eliminate non-recyclable packaging (made of multi-material or non-compatible structures), replacing them with structures that are compatible with recycling chains.

Incorporate recycled material, including post-consumer or pre-consumer recycled material, in structures that are not intended for direct contact with food.

Develop packaging alternatives with circular resins, exploring the possibility of developing resins from advanced recycling sources.

with

The strategic collaborations that the B2B Business Unit o ers to its customers and partners are as follows:

Becoming strategic allies in their choices for more e cient packaging.

Accompanying partners in their transition from traditional packaging to more environmentally e cient packaging.

Leading the development of PCR for food contact in the territories where the company operates.

Sustainable Innovation at the Mass Consumption Business Unit

The ODR Project (Open Development Recipe)

This is an initiative of the Mass Consumption Business Unit that was created with the objective of achieving a greater incorporation of alternative materials in the formulation of the total portfolio. One of the indicators within the follow-up is the percentage of recycled materials added in each of the products, where the starting point is a minimum content of between 20% and 75%.

Recycling Bags Project with Walmart

CAM

In order to promote waste separation, together with the client Walmart CAM, a new product was launched under its private brand Supermax, whose presentation includes di erent colors that correspond to the di erent types of waste.

Its design incorporates a minimum recycled material content of 20%,

The Recycling Plant

Ternova Group has the largest and most modern exible polyethylene recycling plant in the Central American region, with which it closes the product cycle under the criteria of the circular economy. Currently, the Recycling Plant can transform more than 15,000 tons of exible polyethylene into recycled raw material, ready for the production process.

Ternova Packaging’s focus is to contribute to the creation of scalable circular economic models within the exible packaging industry. Over the last decade, the company has gone beyond regulations and has been able to convert traditional exible packaging into packaging with 30% to 100% post-consumer and post-industrial recycled content, to use less virgin raw material and to reuse more and be er existing materials.

The graph shows a detailed analysis of the total amount of material incorporated, covering both internal production and external purchases. The percentage of recycled material compared to the total volume of raw materials used is particularly highlighted.

RECYCLED MATERIAL INCORPORATED INTO PRODUCTS

Notably, the percentage of recycled material compared to the total volume of raw materials used stands out. This visualization aims to provide a clear view of the e orts made in responsible material management and progress toward more sustainable resource management.

PERCENTAGE OF RECYCLED MATERIAL INCORPORATED INTO PACKAGING

2023 Ternova Packaging.

The main projects developed in 2023 at the Recycling Plant to improve the productivity and quality of the process are described below.

Improving the Quality Measurement System Renova-Cycle 4

This system provides 100% recycled pellet data sheets with information on key properties (density, humidity, uidity index, melting temperature, optical and mechanical properties of the lm) to assist in taking actions in the recycling process and to serve as input for internal customer operations.

It also provides complete information on recycled product properties in the data sheet, which positions Ternova Packaging a step above its recycled pellet competitors.

Alignment of Quality Criteria: Overall Master and Repeatability and Reproducibility (R&R) Study

This project is divided into two stages:

1. The rst is the alignment of the criteria that quality inspectors evaluate on the production oor; the objective is to ensure that these criteria do not di er from each other when accepting or rejecting materials, i.e., that the ability to accept, verify and control product quality is the same.

2. The second stage is the evaluation of the criteria on the di erent types of materials that the operating personnel have, so as to verify that the visual classi cation standard is met for each of the materials that are processed in the Recycling Plant.

The maximum bene ts of the project consist of creating greater criteria for operating personnel and inspectors in terms of inspection and veri cation of quality on the production oor, within the Recycling Plant. Maintaining e ective quality control through the di erent tools, personnel and laboratory capabilities makes it possible for the client to trust the nal product.

Recicla 503:

Mobilizing the Community

Recicla 503, which was born in 2019, is a sustainable initiative of Ternova Group. Its objective is to bring the recycling process closer to the population by establishing strategic alliances with companies, which enable collection points for recyclable materials.

Recicla 503 seeks to collect plastic waste (such as straws, bags, and plastic caps), which is processed at the Recycling Plant. The initiative o ers an educational platform on the separation, handling, and processing of solid waste, but also economic development opportunities for people who can sell such waste.

Recicla 503 has two ways of processing recyclable material collected in El Salvador:

other recyclable materials are made available to other specialized collection centers.

High and low density exible plastic is processed at the Recycling Plant.

This initiative articulates di erent actors, not only to build a robust recycling chain, but also to promote the recycling culture and become a strategic facilitator to make it a reality. To this end, Recicla 503 has a portfolio of activities, including the following:

• Creating alliances with companies and institutions.

• Collecting materials from homes.

• Developing volunteer and social hour programs.

• Receiving recyclable materials at di erent points.

• Working with collection centers.

• Making donations.

• Educating on recycling issues.

In 2023, Recicla 503 worked with the Autonomous Executive Port Commission (CEPA), the Ministry of Environment and Natural Resources (MARN), the General Superintendence of Electricity and Telecommunications (SIGET), the National Directorate of Medicines (DNM), Telus, Walmart, Nestlé, the Solidarity Fund for Health (FOSALUD), and the Ministry of Foreign A airs to promote recycling and environmental protection in El Salvador. Among the actions carried out, were the following:

Recyclable material collection campaigns at the International Airport and Ilopango Airport. Thirty-two tons were collected, and 200 employees were trained. 1 At the Ministry of Foreign A airs, 2.5 tons were collected and 60 people were trained.

total of

tons of

Recycling actions are complemented by events such as the following:

• Beach cleanups, which helped to recover more usable materials found at the sites visited.

• Tree planting to reduce air and water pollution and improve the quality of the environment, among other environmental activities and forums.

Results of the Recicla 503 Program in 2023

245

Tons of materials collected in 2023, all donated by end consumers.

261

Tons of materials collected from 2019 to 2023.

20

Tons of exible plastic collected from 2019 to 2023.

10,141 People trained in 2023.

32,545 People trained from 2010 to 2023.

Types

The material was donated to 61 base collectors from 5 di erent collection centers.

1

Regional exchange: Promoting the exchange of knowledge, technologies, resources and practices between the private sector, academia and civil society.

• A technical commi ee leads regional and national processes.

• Events are held for stakeholder representatives.

• Global partnerships and initiatives are actively sought.

Ternova Group and the Prevention of Plastic Waste in the Seas of Central America and the Caribbean:

“Circular Caribbean”

Every year, 10 million tons of garbage end up in the oceans. This is equivalent to dumping a truckload of waste into the oceans every minute. Ternova Group has taken action against this problem, joining the project “Prevention of Plastic Waste in the Seas of Central America and the Caribbean”, known as Caribe Circular (Circular Caribbean). This project works under the principles of circular economy and environmental protection.

The Circular Caribbean project is being implemented by the German Cooperation (GIZ), jointly with the Central American Commission for Environment and Development (CCAD) of the Central American Integration System (SICA) and the Secretariat of Ecology and Environment (SEMA) of the State of Quintana Roo, Mexico. It is nanced by the European Union (EU) and the German Federal Ministry for Economic Cooperation and Development (BMZ).

Great e orts can only be fruitful through the union of great partners. Caribe Circular’s implementing partners are Walmart Central America, Nestlé Central America, Latitud R and Ternova Group. The countries where the project is present are Guatemala, El Salvador, Honduras, Costa Rica and the Dominican Republic.

2

Private sector: this component seeks to strengthen the private sector within the project.

• New business models are developed, and value chains are strengthened.

• Connections are established with plastic neutrality and mechanical recycling projects.

• Exchanges are held on plastic waste prevention and recovery strategies, as well as on Extended Product Responsibility (EPR).

3

Placement of collection stations: These stations allow plastic waste to be returned to recycling plants.

• Guatemala: 3 stations

• Honduras: 2 stations

• Costa Rica: 3 stations

• El Salvador: 2 stations

• Dominican Republic: 1 station

4

Awareness: Raising Awareness Among the Public and the Private

• Awareness-raising, especially through digital media, the radio at Walmart branches and its POP equipment at collection stations. }

• Implementation of local training programs and regional awareness campaigns.

Geographic Scope

• Duration: March 2023 – March 2024

• Funding: European Union (EU) and German Federal Ministry for Economic Cooperation and Development (BMZ).

• Geographic Scope: Guatemala, El Salvador, Honduras, Costa Rica, and the Dominican Republic.

• Executing Partners: Walmart Central America, Nestlé Central America, Latitud R, and Ternova.

Caribe Circular inaugurated in Guatemala

We join forces for a more sustainable future in Guatemala!

Walmart, Nestlé, and Ternova, along with Caribe Circula and GIZ SICA Region, are pleased to present the project "Actions for a Sustainable Future." Through this alliance, we aim to facilitate the recycling process for consumers by simplifying it into easy steps in Guatemala and throughout the region.

"We are very excited to lead this initiative alongside Nestlé and Walmart, being responsible for coordinating with di erent actors in the recycling chain and working together with German Cooperation as an initiative of the programs supported by GIZ and Caribe Circula. We are con dent that we will positively impact the quality of life of Guatemalans," highlighted Josué Siliézar, Sustainability Projects Manager of Recicla 503, an initiative of Ternova.

People participated in the event.

2023 Ternova Packaging.

En el año 2023 se ha logrado

project “Inclusive Recycling Model for Waste Management to Strengthen the Value Chain in El Salvador”

The project “Inclusive Recycling Models for Waste Management in Strengthening the Value Chain in El Salvador” began at the end of August 2022 and will conclude in August 2024. It is nancially supported by Spanish cooperation through AECID.

We are working in 12 municipalities on 3 components within the project:

• Capacity building with all actors in the recycling value chain.

• Increasing the volume of recyclable material and business connections. Strengthening alliances.

14 public-private partnerships

3,489 tons of recyclable materials collected.

10,083.21 tons of CO2 e missions avoided.

1,500,377.67 sales.

493 jobs created.

1,002 people bene ted from the project, both in terms of their knowledge of the recycling chain and their household economy

$508,000 in savings for municipalities.

3 chains strengthened in materials management: PET and plastics, paper and cardboard, and iron.

2023 Ternova Packaging.

Plastic Credits

Through the project of neutralization with plastic credits, Ternova Group aims to contribute signi cantly to the well-being of the planet, participating in sustainability actions that allow reducing its environmental footprint (plastic footprint).

Achievements

At the end of 2023, Nestlé was supported to neutralize its plastic footprint in El Salvador, which was endorsed by a Société Générale de Surveillance (SGS) veri cation under ISO 14044:2006.

Relevant Facts

Currently, Ternova Group can accompany brand owners in the process of neutralizing their plastic footprint in Central America and the Caribbean, as it has the capacity to neutralize 7,000 tons.

The main bene ts of plastic neutralization are as follows:

• It adds value to the brand when these actions are disclosed, as it is perceived as responsible and commi ed to sustainable actions.

• Creates a high impact on the recycling capacity of the region.

• Creates a reputation of being a sustainable company without having to change daily management.

For those who are interested and would like more information, please contact

Denisse Benitez Nassar

Environmental Markets Specialist

E-mail: dbenitez@ternova.group

Tel: +503 7803 8345

Operational Waste Management: E ciency and Responsibility

Waste management is also part of Ternova Packaging’s commitment to sustainability. Over the years, its treatment and nal disposal have evolved, while the company has been following these trends and adapting its operations to manage such waste e ciently and responsibly.

The following actions are part of this management.

Storage:

Ternova Packaging has its own waste storage facility, where hazardous and non-hazardous waste is stored. Ninety percent of hazardous waste is generated at the Merliot #1 plant. At the Plan de la Laguna, Maquilishuat and Renova plants, there are areas for temporarily storing non-hazardous waste while it is being removed by recyclers.

Delivery to strategic suppliers:

Termoencogibles works with 2 strategic suppliers, who are paid to co-process the waste:

a) Geocycle: removal of hazardous waste.

- The removal of chips from the mill located at the Merliot #1 plant is programmed on a weekly basis.

- The removal of sludge, contaminated wipe, photopolymers, mesh with resin and wastewater is dispatched until the transport capacity is full.

b) Environmental Technology (All Green): hazardous electronic waste and leftover lighting xtures are removed.

In 2020 and 2021, such robust waste management and control was not yet in place. In 2022, testing began to allow Geocycle the possibility of accepting more waste for co-processing (sewage, Erema sludge, etc.). While these were accepted, they were kept in storage, and it was until 2023 that they were shipped to Geocycle. Type

OR SPECIAL

Delivery to recyclers:

who remove all recyclable waste from the production plants.

Improving the solvent distiller to obtain more recycled solvent, and to be able to collect a minimum amount of ink sludge on a daily basis.

To reduce the use of fabric wipe by testing with a new product from the supplier.

look for clients who can reuse the material that comes out of the

Water Stewardship: Promoting Sustainable Water Management for a Prosperous Future

Water is the most precious resource of all. Therefore, to manage water, Ternova Packaging carefully monitors the consumption of each of its plants. Initiatives that contribute to saving, treating and reusing water are extremely important activities for the organization.

All drinking water comes from the aqueduct; the Sealing and Merliot #1 plants are supplied by the National Water and Sewer Administration (ANDA), while the Recycling and Plan de La Laguna plants are supplied by the Association of Businesspeople and Neighbors of the La Laguna Industrial Zone (Asevilla).

Treatment Plant Initiatives

Currently, there are two projects for the reuse of treated wastewater at the Wastewater Treatment Plants (WWTPs) of the Merliot Plant and the Recycling Plant. At the Recycling Plant, two ow meters are installed to establish accurate data on the ow rate of incoming wastewater and the treated ow rate discharged into the sanitary sewer system.

2023 Ternova Packaging.

Flow meter installed at the treatment plant inlet

Flowmeter installed at the treatment plant outlet

Since December 2023, a log with the in ow and out ow of water discharged to the sanitary sewer began to be kept, with the objective of systematizing all the ow and connections that allow the water to be transferred to a sanitary services ba ery. This applies as the rst project of the Renova treatment plant, to later continue with the Merliot treatment plant.

The WWTP at the Recycling Plant has completed a stabilization process with the following improvements:

Incorporation of the pretreatment stage, for the removal of visible solids.

2

Adjustment of the physicochemical treatment, with the incorporation of an organic coagulant chemical that improves treatment e ciency.

3

Seeding of special bacteria for biological treatment.

4

Tertiary treatment with the installation of a ltration ba ery including sediment lter, activated carbon lter, ultra ltration and reverse osmosis.

With the installation of the ow meters in the treatment plants, Ternova Group is working towards achieving the international Global Recycled Standard (GRS) certi cation, another important step in its Sustainability Strategy.

Cooling Water Recirculation

The Plan de La Laguna and Maquilishuat plants have cooling water recirculation. One of the ndings, resulting from the baseline survey through the environmental diagnostics conducted, is the need to install ow meters in order to know the ow that is being recirculated, which represents a saving in water consumption, so the metric would be as follows: cubic meters of recirculated water/cubic meters of water consumed in the plant.

Ternova Packaging.

Social

The ultimate goal of all Ternova Group’s actions is to make a positive impact on its surroundings, on its community, and on its internal and external customers; therefore, the social sphere does not escape from this impact.

To create a positive social impact, Ternova Packaging carries out actions that empower people and their communities, promote equality and foster their talent, while respecting their human rights and ensuring fair working conditions.

Thus, the organization applies the following strategic approaches in this area:

• Diversity and inclusion, equal opportunities and decision making from diverse perspectives.

• Human rights and fair working conditions, ensuring respect and excellent working conditions in all areas of the business.

• Talent management and transformation capacity, human talent retention, training opportunities and continuous development.

• Occupational health and safety.

• Employee wellness.

• Programs aimed at community impact.

Recognition of Ternova Group’s Social Work in 2023

• The National Council for the Inclusion of Persons with Disabilities (CONAIPD) recognized Ternova Group for its contribution and commitment to the elimination of barriers for persons with disabilities and its contribution to society’s integral development.

• Summa Magazine recognized Ternova Group with position eight within its ranking of “Diverse, Equitable and Inclusive Companies 2023.”

• The University of El Salvador, through the Inclusive Higher Education Unit, together with AGEDUES, recognized Ternova Group for its cooperation and dedication to inclusive education.

• Recognition by Summa Magazine with the No. 1 position in the ranking “Best employers in El Salvador in sustainability as a support of the employer brand.”

• The Salvadoran Red Cross recognized Ternova Group for providing employment opportunities to people with visual disabilities, and for making the necessary adaptations for their employability and the best

2023 Ternova Packaging.

Safety at Work

92% of risk condition reduction between 2020 and 2023.

Ternova Group is commi ed to provide its employees, including contractors and visitors, with a safe and healthy work environment, and to take care of the environment in a sustained manner in all its processes, maintaining high working standards to prevent accidents, occupational diseases, epidemics and pandemics, as well as environmental pollution. To this end, it continuously develops a corporate safety culture that encourages the participation of everyone to identify potential risks and implement preventive measures aimed at minimizing these risks.

In line with these objectives, Ternova Packaging ensures compliance with applicable legislation and stakeholder expectations through high occupational health and safety standards, assessing safety in each workplace with audits and raising awareness among all employees through training programs with the aim of achieving the zero occupational accidents indicator.

Control tools were implemented in 2020 to identify and manage risks in order to eliminate or reduce them, and to identify unsafe conditions through a card system. Through this system, 92% of these conditions were resolved in 2023.

In terms of global operations, the year 2023 closed with an accident frequency rate (AFR) of 0.35%.

Ternova Packaging also has a complete Occupational Health and Safety system, whose main objective is to take comprehensive care of employees and partners working in its facilities.

Finally, there are accredited commi ees in each of the plants, which have an active role in the occupational health and safety culture. Each commi ee is made up of a certain number of brigade members who represent 10% of the workforce. Some relevant activities in this eld are continuous training workshops, safety talks and one-point lessons at the beginning of each day, as well as occupational safety programs.

0.35 was the accident frequency rate in 2023. 10% of the workforce is represented in the accredited commi ees at each plant.

2023 Ternova Packaging.

Occupational Health

Ternova Packaging is commi ed to the integral wellbeing of its employees and recognizes that their health is fundamental to the sustainable development of the organization. Through a strategic collaboration with the Salvadoran Social Security Institute (ISSS), a series of initiatives that re ect this commitment have been implemented.

1. Access to Social Security for employees and their families.

4,637 medical consultations.

2,082 dental consultations.

9,004 prescriptions lled.

2,014 laboratory tests.

147 examinations for o ce personnel.

260 referrals to di erent medical specialties.

2. Access to the Corporate Clinic, where the following services were provided:

3. The COVID-19 and in uenza 2023 vaccination campaigns were carried out with the collaboration of the Ministry of Health and the ISSS.

4. Financing program for eyeglasses and dental prostheses (strategic alliances with opticians and dental laboratories).

5. Alliances with blood banks to carry out donation and screening campaigns for infectious diseases for more than 700 employees annually.

6. 74% of our employees use the Corporate Clinic service (1,281 people), through which they have access to health services, regardless of their job position.

2024 Ternova Packaging.

Developing Ternova Talent: Education and Growth

24,900 hours of training in 2023.

Ternova Packaging.

Ternova Group maintains a rm annual commitment to provide essential training that empowers its employees, o ering them the necessary tools to reach their full potential. This approach focuses on the development and continuous improvement of their competencies, as well as the preservation of their skills to optimize their performance within the work environment.

In 2023, a total of 41,609 hours of training were provided speci cally to 242 new employees, with an impressive average of 171.9 hours per individual. In addition, 9,584 hours of training were allocated to closing gaps, bene ting 208 employees with an average of 46.08 hours per person. Another group of 125 employees received 7,516 hours of training to learn new operations, with an average of 60.13 hours per person.

The training strategy covers operational collaborators, both new recruits and those who are already an active part of the team, with the objective of ensuring sustainable development. Advanced methodologies and tools are used for the e ective execution of their operational responsibilities, seeking not only to improve their current skills and knowledge, but also to reduce existing gaps.

The scope of Ternova Packaging’s training initiatives is also re ected in the execution of the Total Productive Maintenance (TPM) program, which accumulated 14,560 hours with 9,675 participants. These e orts underscore the company’s commitment not only to the individual growth of its employees, but also to the collective progress of the organization towards sustainability and excellence.

41,609 hours of training for new employees.

9,584 hours of training for gap closure. employees bene ted. 1,673 coverage in training for employees. 97%

Employee Training and Development in 2023: Expanding Horizons

During 2023, a wide range of training programs designed to foster the integral development of the company’s employees were carried out. These initiatives range from organizational programs, which strengthen the company’s structure and culture, to programs speci c to each area, which deepen knowledge and technical skills.

Organizational Programs: Raising Corporate Standards

Organizational programs focus on key areas such as Total Productive Maintenance (TPM) and leadership and include the Leaders Academy and Self-Leadership. Digital literacy has been prioritized, o ering training in essential tools such as MS Excel, Power BI and Power Apps. In addition, fundamental topics of ethics, Bronze certi cation and Basc training were addressed, without neglecting critical aspects such as the FSMA Law, addiction and drug prevention, rst aid, and waste and chemical management. Workshops on sustainability, good manufacturing practices and the use and handling of re extinguishers complemented this robust training program.

2023 Ternova Packaging.

Programs by Area: Specialization and Professional Updates

In terms of area-speci c programs, employees have received an update on the latest labor laws, inventory management and warehouse optimization. Safety training, the use of Dashboard BI, and participation in the National Energy Congress (COREN) re ect Ternova Packaging’s commitment to continuous update and specialization. Cu ing-edge topics such as Economic Forecast 2023, Diversity 3.0, and Business Inclusion show the organization’s response to the changing dynamics of the business environment. In addition, technical areas have been explored with programs on biodegradable products, CAPI, vibration analysis, Autocad, metrology, and color theory in exography, ensuring that the teams are at the forefront of their elds.

This dual focus on organizational training and area specialization underscores Ternova Packaging’s commitment to the holistic development of its employees, preparing them to face the challenges of the present and future with con dence and competence.

Development of the Total Productive Maintenance (TPM) Initiative

Within the Total Productive Maintenance (TPM) program, the education and training pillar aims to develop human resources to ensure sustained corporate growth through the implementation of 6 steps.

Some of the aspects developed in 2023 were the following:

• 31 models to improve the learning methodology.

• The rst DOJO (practical training space for employees in preventive and corrective equipment maintenance techniques) was built for the B2D/B2C business unit and the Recycling Plant.

• Training was provided on the following topics: Introduction to TPM, Autonomous Maintenance (steps 0, 1, 2, and 3), Equipment Operating Principles, Machine Risk, Loss Incident Level Analysis (LILA's) for equipment care, Energies and Residual Energies, Machine Lockout/Tagout (LOTO), Anomaly Detection and Tagging, Internal Instructor Training, and Development of One-Point Lessons (OPLs).

2023 Ternova Packaging.

Total Productive Maintenance (TPM) Program

In 2022, Ternova Packaging initiated a cultural revolution towards operational excellence by implementing the Total Productive Maintenance (TPM) program. This approach involves more than prevention: it is a total transformation that engages all employees in the quest for maximum e ciency. The goal is ambitious but clear: to achieve “4 zeroes”—zero accidents, zero breakdowns, zero defects and zero minor stoppages. Through TPM, employees are commi ed not only to improving their operations, but also to consolidating a safe and sustainable work environment, se ing a new standard of excellence in the industry.

2023 Ternova Packaging.

People in the TPM Program

In 2023, the program began to be deployed at Ternova Packaging El Salvador’s plants, which increased the number of personnel involved in the program by 52%. Kick-o events were held to make the start-up o cial.

Number of Persons in the TPM Program (2022 vs. 2023)

Number

2023 Ternova Packaging.

Autonomous Maintenance Pillar

In 2023, there was notable progress in the manufacturing area, which was re ected in the excellent results obtained through the Autonomous Maintenance pillar. The approach in the preventive management system, especially in the detection of anomalies, has experienced signi cant improvement, achieving a 57% increase in detection capacity. This progress re ects Ternova Packaging’s commitment to operational excellence and manufacturing e ciency.

Card Opening and Closing (Prevention System)

2023 Ternova Packaging.

Planned Maintenance Pillar

The focus with TPM for the Planned Maintenance team is the reduction of breakdowns. Leading this pillar are the Maintenance technicians, who accompany the Production Team in the transfer of skills and analysis of anomalies.

In 2023 there was an 83% improvement in the reduction of breakdowns in the pilot machines where the rst stages of the program are being implemented.

This signi cant percentage of breakdown reduction created, in 2023, an improvement in OEE due to increased equipment availability.

Number of Breakdowns vs. 2023 (Machines in TPM)

Organizational Climate

The organizational climate of the Ternova Group has been a key barometer to measure the health and sustainability of its organizational culture. Over the past six years, there has been a growing commitment from employees, which can be observed in the historical results of internal surveys.

Historical Results

GLOBAL SCORE 2023

By 2023, the overall organizational climate score was 83%. Ternova Packaging continually seeks be er ways of doing things and empowers its internal talent with ongoing initiatives to improve the workplace, including leadership programs, digital and personal skills trainings, as well as improvements in working conditions and internal communication.

Therefore, actions have been developed to strengthen the organizational culture. In 2023, 38 training events called “Cultural Workshops” were held, with the participation of 1,316 employees (2022-2023):

278 Administrative employees participated in the "Cultural Workshops"

1,038 Operational employees participated in the "Cultural Workshops"

2023 Ternova Packaging.

Employee Benefits: Wellness and Development

For Ternova Group, the relationships between people are the fundamental basis of its operations. Therefore, its employees are deeply valued, and the company strives to o er them an enriching work environment. The employee bene ts package includes access to health and wellness programs, professional growth opportunities, health insurance for employees and their families, and exible work arrangements. These initiatives re ect Ternova Packaging’s commitment not only to personal and professional development, but also to fostering a sustainable future for all.

1. Insurance Program (Medical and Life)

The program provides protection to employees and their families, according to the internal policy.

Life insurance is granted to employees who join the company from the rst day they report to work, regardless of the area in which they are hired. The total number of insured employees is 1,718.

Private medical insurance applies by job category and is granted to managers, chiefs, leaders, audit and sales personnel. The number of employees insured is 174.

2. Grocery Store

The Grocery Store is available to all employees and provides the opportunity to obtain basic items at prices lower than those o ered by the market, in cash and on credit. There are two branches located at the Plan de la Laguna and Merliot plants.

With this bene t, the organization seeks to:

• Facilitate employees’ acquisition of basic products at cost price.

• Satisfy the needs of internal clients through the diversity of products available, including Termoencogibles products.

3. Use of Breastfeeding Rooms

Ternova Packaging cuenta con cuatro espacios disponibles para este propósito. Son salas seguras y acogedoras que las madres pueden utilizar durante el período posnatal. Las salas de lactancia materna cumplen con todas las condiciones establecidas por la Ley Nacer con Cariño, entre ellas, que sean espacios privados y adecuados para la lactancia y la extracción de leche. Además, están acreditadas por el Ministerio de Salud.

In 2023, a total of 10 mothers used the facilities.

4. Seniority Recognition

To recognize the loyalty and commitment of its employees, Ternova Packaging o ers seniority recognition to employees with 10, 15, 20, 25, 30, 40 and 45 years of service. The recognition is both monetary and symbolic. In 2023, a total of 127 employees received this recognition.

5. Bus Transport

With the safety of employees in mind, 14 subsidized transportation routes have been assigned to cover di erent municipalities. This facilitates the safe transportation of employees from their homes to the company and vice versa. More than 1,100 employees use this bene t every month.

6. Corporate Wellness Program

The Corporate Wellness Program o ers comprehensive bene ts to employees, always with the aim of continuously improving the services provided to them. In 2023, multiple actions focused on body/mind wellness were carried out, with the objective of promoting health. Among these activities, ve preventive mental health talks were given as part of the Psychological Help program. These talks are given in person in the form of workshops for operational personnel, and virtually, as informative talks for administrative personnel.

7. Psychological Helpline

Always focused on mental health care, a psychological helpline, “Tú Línea Amiga” (You Friendly Line), in alliance with the Pro-Education Foundation of El Salvador (FUNPRES), was implemented. In this way, Ternova Packaging supports the mental health and wellness of employees who have emotional or daily life di culties.

Thanks to this Helpline, employees can access free and 100% con dential psychological therapy. In 2023, a total of 215 hours of consultation were given in the period from January to December.

Ternova Group’s Volunteering Initiatives: For the Community and the Planet

During 2023, Ternova Group has rea rmed its commitment to social and environmental responsibility through various volunteering initiatives, which have had a positive impact on the community and the natural environment.

Employees have enthusiastically joined carefully selected programs that re ect Ternova Packaging’s corporate values and sustainability mission. Among these, the following stand out:

Blood Donation, a vital campaign that saves lives and strengthens the bond with public health.

Recycling Volunteers in national parks and beaches, to promote circular economy and reduce the environmental footprint.

Reforestation Project Volunteers, which contribute to the revitalization of ecosystems.

Turtle Release, an experience that symbolizes support for biodiversity and the conservation of endangered species.

2023 Ternova Packaging.

The sum of these programs constitutes the heart of the organization’s volunteering e orts and demonstrates that collaboration and generosity of spirit can produce signi cant and lasting changes.

An impressive number of employees have stepped up to contribute to various programs, showing a commitment to solidarity that transcends the day-to-day operations of the Ternova Group.

Type of volunteering

Number of participants Organizer

Recicla 503 and Corporate Affairs

Recicla 503 and Corporate Affairs

Corporate Affairs

Total

“One Million Lives:”

Thirteen Years Preserving Sea Turtles’ Future

December 2nd, 2023, marked a historic milestone for environmental sustainability and conservation in El Salvador, speci cally on Tasajera Island. The “One Million Lives” campaign for the project “Strengthening Local Governance around the Experiences Produced by the Management of a Sea Turtle Breeding Pen on the Beaches of Tasajera Island”—an initiative of the Tona family that later became a corporate mission of Ternova Group—celebrated thirteen years of uninterrupted e orts to preserve sea turtles and protect Salvadoran beaches.

Since its conception more than a decade ago, this project has grown exponentially, becoming a symbol of environmental commitment and community empowerment. The crowning achievement of these e orts was an exciting event: the release of more than one million hatchling turtles. This achievement is not just a number, but a re ection of the constant work, dedication and love for the environment of an entire community, including the Ternova team and the invaluable support of the Zoological Foundation of El Salvador (FUNZEL).

The sea turtle protection project not only preserves an endangered species, but also protects marine ecosystems and encourages the correct disposal of waste at a recycling station installed on the island.

This project has succeeded not only in raising public awareness of the importance of marine conservation, but also in empowering the local community through tools and knowledge with which they actively participate in the protection of their natural environment. The integration of the community in conservation activities has been fundamental to the success of the campaign, as it has created a sense of ownership and shared responsibility for the environment.

The project is a powerful testament to what is possible when companies, communities and non-governmental organizations work together toward a common goal. Ternova Group and its partners demonstrate that commitment to sustainability goes beyond corporate operations: a shared responsibility that has the power to change the world.

As we celebrate this achievement, we look to the future with hope and determination to continue this legacy of conservation.

Achievements

• 1 million olive ridley hatchlings released in 13 years of project support.

• Construction of a Sea Turtle Interpretation Center.

• 1 hatchery pen on Tasajera Island, La Paz.

• 1 recycling station for the correct disposal of waste located at the Canton Isla Tasajera School Center.

• 250 people bene ted directly by the project.

• 500 people bene ted indirectly.

• Community ties strengthened through sea turtle conservation and environmental awareness processes through the CLEAN BEACHES program, created and supervised by FUNZEL with the participation and contribution of other international NGOs; together, 3,500 pounds of garbage have been removed from beaches.

• Dissemination and promotion of corporate environmental responsibility.

• Strengthening of local capacities for the care, observation and management of sea turtle breeding pens.

1,000,000 turtles released.

1 incubation pen in Tasajera Island, La Paz.

1 recycling station at the Cantón Isla Tasajera School.

250 bene ted directly from the project.

500 people bene ted indirectly.

3,500 pounds of trash removed from the beach.

“As the nurseryman in charge of the pen and an inhabitant of Tasajera Island, I would like to express my gratitude to FUNZEL and Ternova for their support. Thanks to this project, both we, the nurserymen, and the 250 turtle egg collectors who walk the beaches, have experienced a remarkable bene t. This support has not only been re ected economically, but also in the increase of the turtle population, a positive change that even the turtles have been able to feel.

We are grateful for all the e ort and dedication of the Ternova Group and hope to continue counting on their valuable support in this noble cause.”

Walter Peña

Nurseryman of the pen of the Tasajera Island.

Diversity, Equity and Inclusion

Signi cant steps were taken in 2023 to consolidate policies and programs that re ect Ternova Group’s commitment to an inclusive, diverse and equitable work environment. Innovative hiring initiatives and comprehensive professional development programs have been implemented, all meticulously designed to support equitable representation and cultivate a strong sense of belonging among all employees.

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Women in Leadership Positions

Women in leadership positions is a powerful a rmation of Ternova Group’s commitment to gender equity and female empowerment in the administrative and operational areas. Ternova Packaging recognizes that female leadership is fundamental to its growth and sustainability, and celebrates the talent and capability of its women leaders, who not only inspire everyone with their strategic vision and transformational leadership, but also serve as role models for the next generation of women in the organization.

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Women in Leadership Positions

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Women in Leadership Positions

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Women in Operational Positions

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Ongoing Training Support on Behalf of the Company and by Own Initiative

Ternova Packaging applauds the spirit of self-improvement and therefore reinforces its commitment to its employees’ professional development. A clear example of this is Irma Melara, a valuable member of the team, who has successfully completed the International Trade Leadership Program for Women in Business, taught by the renowned McDonough School of Business at Georgetown University in collaboration with COEXPORT and USAID. This achievement re ects her dedication and e ort to advance and grow professionally. Irma’s determination for continuous improvement and her focus on transformation are not only worthy of recognition, but also serve as an inspiration and contribute to the strengthening of the company’s culture. Ternova Packaging is proud to have professionals of Irma’s caliber, whose personal aspirations and achievements align with the organizational values and vision.

Testimonial of a Female Talent Promotion

At Ternova Group, the ambidextrous thinking of our employees is shared and developed. As a testimony of this aspect, Ximena Velásquez López, who worked as Continuous Improvement Leader at Termo Vietnam, shared her experience with our employees, an experience of professional immersion in an international environment, where she highlighted her adaptation to the Vietnamese culture and her evolution as a global leader.

Ternova Packaging is proud to be a company in constant evolution, which encourages its employees to reach their full potential and trains leaders capable of driving transformations worldwide, transcending cultural and geographic barriers.

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Empowering Persons with Disabilities

At Ternova Packaging, the incorporation of people with disabilities into the workforce is a key part of its strategy to build an inclusive and diverse company. The unique value and perspectives that these employees bring to the organization is widely valued, as they contribute signi cantly to the culture of innovation and sustainability.

Inclusive Employability: Opening Opportunities

Ternova Group promotes employability with a decidedly inclusive approach, implementing initiatives that re ect its commitment to diversity and equal opportunities. The recruitment and selection processes are designed to identify the skills and competencies of candidates beyond the conventional ones. This allows expanding opportunities to a more diverse range of human talent, valuing what each person can bring to the organization.

This competency-based approach seeks not only to ll vacancies with the most suitable candidates, but also to foster a work environment that re ects society as a whole, recognizing and celebrating diversity. Ternova Packaging is convinced that by accommodating a wide variety of perspectives and experiences, it not only enriches the corporate culture, but also drives innovation and competitiveness in the marketplace.

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Culture of Diversity and Inclusion: A Living Commitment

1. Actions that Promote a Diversity and Inclusion Culture

a. Participation in the program “Become an Inclusive Company” of the American Chamber of Commerce of El Salvador (AmCham) in partnership with the National Council for the Inclusion of Persons with Disabilities (CONAIPD).

• Phase 1: Awareness Workshop

• Phase 2: Training on Salvadoran Technical Standard 11.69.01:14 Accessibility to the physical environment. Urbanism and Architecture. Requirements and Universal Design.

• Phase 3: Training on Salvadoran Technical Standard 35.105.01.20 Information Technology, Accessibility. Communications. Requirements for Web contents.

• Phase 4: Workshop on current regulations on disability oriented to employability.

• Phase 5: Diagnosis of the physical spaces of the companies and technological systems for the best implementation of the Salvadoran Technical Norms of universal design, both in physical and web environments.

b. Diagnosis and advice on inclusion issues accompanied by GIZ and Ms. Camila Soundy, expert on the subject, within the framework of the program “Promotion of Youth Employment and Resilience in Central America” (CaPAZ II).

c. Awareness-raising and continuing education workshops on topics such as culture, inclusive language and Salvadoran Sign Language (LESSA).

d. Signage in the plants for ease of movement, especially for visually impaired employees.

e. Changes in infrastructure and workplace conditions, ensuring an inclusive environment and reasonable adjustments.

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2. Achievements of Initiatives that Have Contributed to Strengthening Diversity, Equity and Inclusion

The CaPaz II Program, led by the German Development Cooperation (GIZ) in close coordination with the Secretariat for Central American Social Integration, aims to implement actions that generate structural changes, awareness measures and training for the inclusion of people with hearing disabilities. All this contributes to put into practice Ternova’s Corporate Policy of Inclusion, Equity and Labor Diversity.

The aim is to reinforce the promotion of an inclusive organizational environment that can serve as a practical example for other CaPAZ II partner companies in the SICA region.

3. Successful Cases of Professional Development for Employees with Disabilities or from Vulnerable Populations

A group of 24 people with hearing disabilities were incorporated to be trained, together with Ternova Group and Fundeplast, in the career of Sealing and Cu ing Operator for exible packaging. In order to achieve this milestone, the following activities and tasks were carried out:

a. Adaptation of recruitment and selection processes.

b. Adaptation of inclusive job pro les.

c. Ergonomic adaptation of spaces.

d. Adjustment of work tools.

e. Psychosocial support internally and through the Ágora alliance.

f. Psychological wellness program with Tu Línea Amiga Helpline, in alliance with FUNPRES.

g. Awareness raising for employees and colleagues.

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Diversity and Inclusion Success Story

With great pride, Ternova Group recognizes José Balmore García Molina, Diversity and Inclusion Leader, who has been recognized by the University of El Salvador for his steadfast commitment and remarkable e orts to promote the rights of people with disabilities.

Balmore’s career is a source of inspiration characterized by resilience, tenacious dedication and a tireless drive to excel. This recognition transcends the personal and becomes a beacon of motivation for all those who seek to make a di erence through inclusion and diversity.

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Human Rights and Fair Labor Conditions

Ternova Group seeks to e ectively apply a comprehensive set of human rights principles in its operations. The Group’s central focus lies in its commitment to the fundamental principle that “we are all born free and equal.” This spirit permeates all aspects of its human resources policies and ensures that people, regardless of their origin, are treated with dignity and respect from the moment they join the organization.

One of the cornerstones of Ternova Group’s commitment to human rights is its proactive stance against discrimination (Diversity and Inclusion Policy). The company has implemented solid anti-discrimination policies, which foster an inclusive workplace where employees are free from prejudice based on race, gender, religion or any other characteristic.

In addition, Ternova Group’s commitment to the right to work is evident in its labor practices. The company o ers fair wages, safe working conditions and professional development opportunities, ensuring that employees can exercise their right to work in a supportive and empowering environment.

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Asimismo, la organización reconoce la importancia del derecho al descanso y al tiempo libre, por lo que implementa políticas que promueven un equilibrio saludable entre el trabajo y la vida personal, reconociendo que el bienestar de los empleados es esencial para el éxito a largo plazo.

The organization also recognizes the importance of the right to rest and leisure time and implements policies that promote a healthy work-life balance, recognizing that employee well-being is essential for long-term success.

Además, Grupo Ternova entiende que sus responsabilidades como empresa se extienden más allá del lugar de trabajo. Por ello, se involucra activamente con la comunidad, reconociendo sus deberes hacia el desarrollo social, la gestión ambiental y las asociaciones locales. Grupo Ternova es un ejemplo del papel que las empresas deben desempeñar para crear un mundo mejor. Al hacerlo, se alinea con la creencia de que los derechos son inalienables y enfatiza que estos derechos deben respetarse no solo dentro de la organización, sino también en el contexto más amplio para crear un verdadero impacto social.

Ternova Group understands that its responsibilities as a company extend beyond the workplace. For this reason, it is actively involved with the community, recognizing its duties towards social development, environmental management and local partnerships. Ternova Group is an example of the role that companies must play in creating a be er world. In doing so, it aligns itself with the belief that rights are inalienable and emphasizes that these rights must be respected not only within the organization, but also in the broader context to create a real social impact.

En general, Grupo Ternova sirve de modelo de cómo un líder de la industria manufacturera puede integrar los principios de derechos humanos en sus valores fundamentales, creando un impacto positivo y sostenible, tanto en sus colaboradores como en las comunidades en las que opera.

Overall, Ternova Group is a model of how a leader in the manufacturing industry can integrate human rights principles into its core values, creating a positive and sustainable impact on both its employees and the communities in which it operates.

Ternova

Promoting Equality: Non-discrimination Policies and Practices in Recruitment and Selection Processes

Ternova Packaging has a competency-based recruitment and selection procedure that ensures fairer and more transparent hiring processes. In terms of internal mobility, steps and requirements have also been established so that employees can develop and continue to grow within the company.

Covered vacancies

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Guardians of Culture

Sustainability Report 2023

Sustainable Innovation

The Guardians of Culture Commi ee is a group of employees freely elected by their co-workers, who represent them to personally and directly convey to management and leadership comments, suggestions and requirements that contribute favorably to the organizational climate.

Each commi ee holds 3 sessions per year.

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Part 5

GOVERNANCE

Grupo Ternova maintains its commitment to regulatory and ethical compliance, fostering an organizational culture based on values and moral principles that guide its actions and business

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Digital Transformation and Strategic Partnership to Strengthen Business Ethics

Business ethics has been fundamental for Ternova Group since its inception, as it has been the guide towards the constant evolution of its organizational systems. In 2020, two key aspects were identi ed as requiring transformation: digitalization and the need for strategic partners to strengthen internal transparency.

With this vision, in 2021 a corporate diagnosis of the ethics system was carried out through internal surveys and interviews. Gaps were detected in the existing analogous systems, especially in the accessibility for whistleblowing and following up on investigations.

As a result of this analysis, the opportunity arose to renew the ethics system, turning it into a digital solution. Thus was born the Ternova Integrity platform, a multi-channel whistleblowing and investigative follow-up system endorsed by Ethics Global, experts in business ethics.

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This is how this new whistleblowing platform was launched, which can be easily accessed through a website, telephone, e-mail and physical mailboxes. Ternova Integrity has a case manager who is responsible for documenting complaints. The investigation and resolution process involves a team of 14 collaborators who are experts in these elds. These e orts have resulted in an average investigation closure time of 17 days.

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Maintaining quality and transparency is relevant; therefore, Ternova Group measures the ethics system through ve important indicators: trust, a ention, resolution, dissemination and awareness of the whistleblowing system.

TRANSPARENCY IS ESSENTIAL

Thanks to these improvements and constant communication, the following achievements have been made:

• 94 % of employees are aware of the Ethics Reporting platform.

• 89 % of employees at the corporate level rate our system as easy and accessible.

• 80% believe that the con dentiality of the system is high.

Ethics are reinforced through organizational induction and a training strategy focused on critical topics. Topics are tailored to speci c audiences and general needs of the company.

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EMPLOYEES TRAINED

The Ternova Group is rmly commi ed to conducting its business with integrity, backed by a solid ethical framework that de nes appropriate conduct, levels of severity for misconduct, and addresses issues such as respect for human rights, the prevention of money laundering and the proper use of the company's brand.

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Transparency: Key to Building Trust

The Ternova Group’s commitment to excellence and sustainability through packaging with less environmental impact is manifested not only through its actions, but also in the formal recognition of its e orts and dedication.

Ternova Packaging rmly believes that the way to a more sustainable future is through transparent and responsible practices. Therefore, it proudly presents these certi cations, proof of its commitment to a greener world, and a testament to the quality of its packaging with less environmental impact.

Acknowledgment

We would like to thank the Sustainability Champions, whose dedication has been fundamental to the preparation of this Report. Their willingness to share the required information and their participation in all the working sessions have been crucial. We deeply value their commitment and the constant e ort they have shown to ensure the success of this project.

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