Business Expansion – Klabin

Business Expansion

THE CONSTRUCTION OF A STRONG TECHNOLOGY, INNOVATION AND SUSTAINABILITY BASE OVER THE LAST FEW YEARS GUIDES NEW COMPANY INVESTMENTS TOWARDS PRODUCT AND MARKET DEVELOPMENT OPPORTUNITIES

—  Strengthened bases sustain growth

(GRI 103-1, 103-2, 103-3)

The year 2018 was marked by great advances in Klabin’s growth cycle. The acquisition of a share of the Israeli startup Melodea, a pioneer in the extraction of nanocrystalline cellulose (CNC), produced from renewable sources, was an important step in developing biobarriers, impelling new application perspectives for the company’s raw materials. During the period, the company announced the construction of a Pilot Facility Park, at the Monte Alegre Unit, in Telêmaco Borba (PR), for studies and tests on research fronts such as microfibrillated cellulose (MFC) and lignin.

These action fronts reinforce the search for market opportunities to consolidate pulp and paper as raw materials for multipurpose, renewable, recyclable and biodegradable products.

—  Increase production capacity

With a strong consolidated technological base and highly competitive forests, Klabin announced in April 2019, as it celebrated 120 years of operations, the most robust investment in its history: the installation of two packaging paper (kraftliner) machines with integrated pulp production and a total capacity of 920,000 tons per year, at the Puma Unit in Ortigueira, Paraná. An estimated BRL 9.1 billion will be invested, including infrastructure costs and taxes.

The construction of the Puma II Project, as it was named, will include two phases that will last 24 months each. The first phase will consist of the construction of a main fiber line to produce unbleached pulp integrated into a kraftliner paper machine, with a capacity of 450,000 tons per year. The second will include the construction of a complementary fiber line integrated with another kraftliner paper machine with a capacity of 470,000 tons per year.

The foundation for Klabin’s business expansion involves more than 239,000 hectares of planted pine and eucalyptus forests, which provide access to high-quality raw material. To meet the need for additional wood, the company constantly plans the acquisition of standing forests and new areas for planting.

Synergy and social benefits in the Puma II project

The new growth stage reflects Klabin’s technology and cost competitiveness, using its forestry base that is a benchmark in productivity, with the advantage of being close to the company’s industrial assets. In addition, the synergy with Klabin’s industrial and forestry operations in the region and the company’s commercial positioning in the global packaging paper market boost the implementation of Puma II.

At the peak of construction, 9,000 jobs should be created. After operation start up, 1,500 direct and indirect jobs will be created, benefiting the region of Campos Gerais, in Paraná. The project will potentially raise the state’s ICMS (tax on sales and services) collection in up to BRL 200 million per year, boosting regional development.

 

—  New issuance of green bonds

In March 2019, Klabin issued a new batch of Green Bonds worth USD 500 million, with a 30-year maturity. This is the first time a Brazilian company is able to raise funds from this category with such a maturity date.

Green bonds are resources that companies seek in the market to finance projects with a positive social and environmental impact, such as those Klabin undertakes for mosaic forest management, biodiversity conservation, clean energy production and adequate waste disposal.

The company issued its first batch of Green Bonds in 2017, when it raised about BRL 1.6 billion, with a 10-year maturity, in a transaction that became a reference for investors, financial institutions and other companies.

2015
(sep to Dec)
2016 2017 2018  (Jan to Jun) 2015
(sep to Dec)
2016 2017 2018 (Jan to Jun)
Renewable Energy Power generation from renewable energy sources 49.5 45.7 2.1 2.9 14.8 13.1 0.6 0.8
Basic Power Network and transmission lines 1.6 1.5 0.5 0.5 0.4 0.2
Waste Management Effluent Treatment 7.7 11.1 0.1 2.3 3.2 0.02
Waste Central 0.3 5.8 0.1 1.7
Clean Transportation Railroad, wagons and locomotives 24.1 57.9 7.2 16.6
Energy Efficiency Photovoltaic Generation and load Station 0.1 0.04
Reduction of steam consumption and increased power generation 0.1 3.5 0.02 1.0
Sustainable Forestry Management Forestry 4.0 14.7 107.5 47.7 1.2 4.2 33.7 13.9
Certified Wood Purchases 18.7 140.7 21.7 29.2 5.6 40.4 6.8 8.5
Eco-Efficient and Circular Economy Adapted Products, Production Technologies and Processes Investments – New Technology Center and Research lines 4.5 17.4 37.6 14.6 1.4 5.0 11.8 4.3
Restoration of Native Forests and Conservation of Biodiversity Klabin Ecological Park 1.2 3.4 3.2 1.0 0.4 1.0 1.0 0.3
Recovery of degraded areas surrounding the Puma unit 1.1 0.3 0.02 0.3 0.1 0.01
Fauna and Flora Monitoring 0.4 0.6 0.6 0.1 0.2 0.2
Programa Matas legais (Good Forests Program) 0.4 0.4 0.5 0.1 0.1 0.1
Environment

projects and certifications

1.3 2.4 7.0 3.2 0.4 0.7 2.2 0.9
Programa Matas Sociais (Social Forests Program) 0.3 0.1
subtotal 113.7 302.7 181.5 102.2 34.1 86.9 56.8 29.8
TOTAl R$ 700.1 us$ 207.6