The special services of the Cleveland Digital Imaging Center continue to be a complementary marketing and business development resource utilized by CPG. This state-of-the-art facility provides digital imaging and marketing design, research and development of innovative and proprietary structural design, and printing technology. In addition to design, this group can also provide photography, prototype samples and merchandising support products for our customers. The Versailles, CT graphic reproduction services equipment capabilities were greatly enhanced during the year. This technically advanced facility provides digital proofing and full form film prepress output at a substantial cost savings to our customers.

Several extraordinary developments to better meet the needs of current customers and to serve a broader packaging customer base were either implemented or initiated during the year. CPG developed a customized, Internet-accessible, e-business communications platform which was put into operation for two of our major consumer goods customers. This system provides our customers a more timely and accurate form of electronic communication, giving Caraustar a competitive advantage. CPG formed a joint venture, Data-Rich Packaging, LLC, to market a compliance-enhancing package to the major pharmaceutical companies. The proprietary technology incorporated in the data-rich package and system offers significant revenue opportunities to pharmaceutical companies while improving medication costs through improved patient compliance. In addition, CPG is participating in the development and marketing of an exciting new microwave susceptor, packaging and food ingredient system that offers tremendous opportunity. As the master licensee, Caraustar will develop, produce, and possibly sublicense this system for the most prominent products of the major food companies.

In the area of product development, we continued to grow our business with unique and inventive packaging applications such as EconoPour®, an integral paperboard pour spout feature, and RepelKote™, the only FDA-compliant and EPA-approved packaging coating for repelling insects from packaged products. We are also able to successfully direct print micro-flute corrugated in many of our operations.

These technical advances in design and innovation led to our success at the 56th annual National Paperboard Packaging Competition held June 2000. At this event, which was sponsored by the Paperboard Packaging Council, Caraustar won over 21 percent of all the awards given — the most for any company in our industry.

Significant progress has been made during the past year as we grew both in capabilities and resources in support of our customer-driven packaging strategy. Customer needs and demands of the marketplace require that the leadership of our group continue to search for the refinements and expansions in capabilities and resources that will ensure our long-term success in the packaging marketplace.

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