Smithfield Environment Conference June 5, 2012

1. Smithfield Environment Conference June 5, 2012 Landfill Free The Armour-Eckrich, Peru, Indiana Experience

2. The John Morrell Food Group • 18 Operating Facilities; • 9,800 employees • $3.7 Billion in sales per year (FY2011)

3. Smithfield Sustainability Goals • Decrease waste disposal to landfill by 10% in FY2016 as compared to FY2008 on a production weighted basis; • One Zero Landfill facility per IOC by 2018.

4. Landfill Reduction – So Far, So Good • JMFG: 10% less waste to landfill in FY2011 as compared to FY2008 (production weighted); • FY2008: 39,129 tons (6.47 lbs/cwt) • FY2011: 33,700 tons (5.82 lbs/cwt)

5. Waste Management Hierarchy • Waste Elimination/Source Reduction; • Reuse; • Recycle (including compost) • Waste to Energy; • Landfill

6. Zero Landfill – Smithfield Definition • Zero waste shipped to a landfill for a 12 month continuous period; • The percent of waste reused or recycled must be at least 50% of the total generated; • Incineration without energy recovery is limited to legally required disposal (hazardous and medical wastes); • Stabilized and landfilled hazardous waste limited to 0.1% of the total waste generated. • The total waste management cost must not exceed 5% above the baseline waste management cost.

7. Armour-Eckrich, Peru, IN • FY2008 = 999 tons/year • FY2011 = 440 tons/year • FY2012 = 252 tons/year • FY2013 = <25 tons/year (goal) • We don’t anticipate any additional loads to the landfill beyond early May 2012, so by June 2013, we should meet the Smithfield Foods definition of landfill free.

8. Armour-Eckrich, Peru, IN • Precooked Bacon Plant, so lots of grease! • White Grease: 4,134 tons/year • Brown Grease: 1,403 tons/year • Total Amount: 5,527 tons/year • Very profitable: • Revenue – White Grease: $3,854,152/year • Revenue – Brown Grease: $ 392,253/year • Revenue – Total: $4,246,405/year

9. Armour-Eckrich, Peru, IN • If it was easy, we’d all be there: • What’s in there? Plastic sleeves and liners; dirty plastics; paper towels; ear plugs; “dirty” plastics; old corrugated cardboard; wax coated cardboard; wooden pallet scraps; scrap metals; barrels; aluminum cans; paper; used oven belts; ingredient bags; fibers; food waste from employee lunch breaks, etc. • What’s acceptable for recycling?

10. Armour-Eckrich, Peru, IN • Step by Step Process: Establish BHAG; Form Cross-Functional Team; Designate Team Leader: Ed Schmaltz, Transportation Manager Top Management Support: Mike Fritz, Plant Manager Buy-in from all Facility Team Members Partner with Recycling Firm that will take almost EVERYTHING

11. Armour-Eckrich, Peru, IN • Step by Step Process: Color coded bags for improved sorting: Black bags for plastics Tan for trash Clear for paper Lock Trash Compactor! Covanta: Waste-to-Energy Facility in Indianapolis for food scraps

12. Armour-Eckrich, Peru, IN • A Place for Everything: Cardboard Baler: Boxes, Combos, Paper, Film Cores Plastic Baler: Film, Stretch Wrap, Aprons, Sleeves, Rain Suites and Coats, Banding Plastic Combo: Bottles, Buckets, Tubs, Squeegees, Helmets Paper Baler: Coated Paper, Copy Paper, Newspaper, Labels, Pallet Tickets, Paper Towels, Ingredient Bags, Glove Boxes Metals Container: Blades, Pipe, Edge Metals, Fuses with Metal Ends, Cans, Air Filters, Lids and Bands from Drums, Wiring Rubber Combo: Boots, Hoses, Transfer Wheels, Green Gloves Trash: Food Waste, Wood Scraps, Ear Plugs, Hair Nets, Misc.

13. Armour-Eckrich, Peru, IN • Educate, Reinforce New Waste Disposal Protocols, Update on Progress: Daily Plant Employee Meetings Reviewed with the EHS Committee (composed of operations, maintenance, wastewater, QA)   Town Hall meeting/Cookout Review of material retrieved from trash compactor This involvement helped employees improve their habits and inspired them to take pride in their contributions.

14. Bottle Collector

15. Can Collector

16. Trash Collector

17. Plastic Combo

18. Inedible Room, Paper Compactor

19. Paper Compactor

20. Cardboard Compactor

21. Trash Compactor with Lock

22. Recycling Trailer

23. Armour-Eckrich, Peru, IN Recycled/Diverted Amounts & Revenue Cardboard: 304 Tons/year $32,000/year Plastic: 384 Tons/year ---- Paper: 58.5 Tons/year ---- Metal: 25.7 Tons/year $5,275/year Rubber: 3.6 Tons/year ---- Mixed Plastic: 1.2 Tons/year ---- Aluminum: 1.0 Tons/year $1,004/year Pallets: 121.5 Tons/year $4,800/year Waste-to-Energy: 48 Tons/year TOTALS: 947.5 Tons/year $43,079

24. Armour-Eckrich, Peru, IN Net Annual Savings: Recycling Revenue $43,079/year Landfill Cost Avoidance: $31,000/year Compactor Lease Avoidance: $ 4,800/year Waste to Energy Costs: ($2,880)/year Transportation Costs: ($2,800)/year TOTAL: $73,199/year

25. Others Getting There • Saratoga Food Specialties: • Decreased solid waste to landfill by 43% from FY2008 to FY2011 (production weighted). • Big push recently: FY2011 Average: 16.1 tons/month CY2012 (YTD Avg): 11.4 tons/month

26. Saratoga – How They’re Doing It • Working with suppliers to get raw materials only in containers that can be recycled; • Labeled bins for all types of waste, right at point of use; • Top management leadership and support • Buy in from front line production managers • Four balers: cardboard; plastics; woven fiber totes; bags; • Other: wax label paper; pallet stretch wrap; paper slip sheets; pallet wrapping straps; plastic drums; office paper; aluminum cans.

27. Next Step For Us – Springdale, OH • FY2008: 4,152 tons (11% of total 39,129 tons) • FY2011: 3,615 tons (11% of total 33,700 tons) • Cellulose Casings and Dewatered DAF sludge = 70% of total landfill material • Composting could is a viable alternative to landfill and is less expensive.

28. Next Step For Us – Sioux Falls, SD • FY2008: 24,542 tons (63% of total 39,129 tons) • FY2011: 21,093 tons (63% of total 33,700 tons) • Wastewater Sludges = 80% of total landfill material • Land application of Sioux Falls wastewater sludges would reduce our total JMFG landfill amounts by over 16,800 tons/year (50% decrease overall). • Environmental Land Management or Terra Renewal