Message from the Board

DESPITE THE NUMEROUS CHALLENGES OF 2017, KLABIN ACHIEVED MANY MILESTONES, SUCH AS THE RAMP UP OF THE PUMA UNIT, EXTENSIVE ACCEPTANCE OF FLUFF PULP, THE INAUGURATION OF THE TECHNOLOGY CENTER, AND THE 26th CONSECUTIVE QUARTER OF POSITIVE FINANCIAL RESULTS

(GRI 102-14)

We expected 2017 to be a difficult year, marked by uncertainties on whether reforms proposed by the Government would be passed, an unstable national political scenario and volatility in the global stock markets. Even with these and other challenges Klabin faced and after a long period of economic recession, the company already expected packaging consumption to rebound and a growing volume trend, which became more evident as of the second quarter.

Klabin ended the year with major achievements. The company reached record card production figures for the Monte Alegre plant, and after successfully completing the ramp up of the Puma Unit, it ended the period with 1.4 million tons of pulp produced at the new factory. Fluff pulp was widely accepted in the domestic and foreign markets in which Klabin started operating, evidence that the product has already attained the highest quality standards.

The company also expanded its market share of corrugated packaging in 2017 and opened an advanced Technology Center in Paraná, raising it to higher standards of innovation.

Year after year, Klabin has been excelling as a competitive company, showing resilience in times of economic crisis, high forest productivity, and increasing financial results. With significant business investments in recent years, the company currently offers a unique product mix in the domestic industry. Focus on operational efficiency has been the key to achieving the best production figures within the best possible product mix.

>> KLABIN HAS BEEN EXCELLING AS A COMPETITIVE COMPANY, SHOWING RESILIENCE IN TIMES OF ECONOMIC CRISIS, HIGH FOREST PRODUCTIVITY, AND INCREASING FINANCIAL RESULTS <<

Sustainability, one of the pillars of Klabin’s operational efficiency, is a competitive advantage and a long-term commitment with its stakeholders. Sustainability guides the company’s operations and vision of the future, responding to a market that follows global trends and looks toward a new consumer profile of individuals interested in more customizable and sustainable alternatives.

In this scenario, Klabin has worked on product development along with its clients and is prepared to offer packaging solutions that are increasingly safe and effective. Klabin products feature strong sustainability attributes, as they are completely recyclable and come from renewable and biodegradable sources.

The 2017 inauguration of the Technology Center consolidates the business investments in Research and Development and has allowed further discussions on biodegradable packaging.

To foster innovation, Klabin has recently acquired 12.5% stake in Melodea, a leading Israeli startup company in nanocrystalline cellulose extraction technology, fully produced from renewable sources. The partnership strengthens the strategy of developing solutions aimed at responsible, efficient and sustainable use of natural resources.

Klabin’s operational efficiency is still anchored to the people pillar; as a result, providing ongoing and high quality training to employees has been crucial to achieving results. This process is made possible in part by the Klabin Business School (ENK), which helps improve the skills required for a company under continuous renewal. In 2017, approximately 9,000 users across all units had access to the ENK Portal alone.

>> WITH HIGH FOREST PRODUCTIVITY, ACKNOWLEDGED AS ONE OF THE BEST IN THE WORLD, AND THE RECENT EXPANSION OF PULP PRODUCTION, KLABIN IS PREPARING FOR A NEW GROWTH CYCLE <<

With high forest productivity, acknowledged as one of the best in the world, and the recent expansion of pulp production, Klabin is preparing for a new growth cycle. A major challenge includes finalizing its deleveraging and selecting the best alternatives among the growth paths being considered. In addition, the challenge to maintain efficiency throughout all operations remains, focused on ensuring the availability of our equipment to meet production demands.

When considering the UN Sustainable Development Goals (SDGs) on sustainability guidelines and long-term planning, Klabin has been reinforcing its commitment to the future and social and environmental development of the region in which it operates since 2016, allocating efforts and investments to this global agenda, which establishes priorities and goals to be met by 2030.

We would like to thank all employees and business partners for their commitment to building the company’s historical success trajectory, and for the growth in financial results for the 26th consecutive quarter. We also thank our shareholders, customers, suppliers and investors for trusting our unique business model and for another year of great achievements.

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