Economia sustentável
Economia sustentável
Sustainable economy

We achieved growth in every line of the business and, consequently, significant financial results.

Sustainable economy
Sustainable economy
Tema

Economic performance

2020 was marked by the Covid-19 pandemic and created great economic and social uncertainty. Even in this scenario, we achieved solid results, proving once again the excellence of our integrated business model, which is highly flexible and able to adapt to the most diverse economic environments.

The results in the period also reflect the fact that more than 80% of Klabin’s pulp, paper, and packaging production is for essential segments, such as food, hygiene, and cleaning.

We achieved growth in every line of the business and, consequently, significant financial results. We enjoyed our eleventh consecutive year of growth in operating cash generation measured by EBITDA. Other highlights stemmed from completion of the purchase of International Paper (IP) and the investment of more than R$ 5 billion in our operations and projects, notably the Puma II Project.

The year also saw the strengthening of our Corporate Governance, the ending of royalty payments for the use of the Klabin name and the approval of two financial policies on Indebtedness and Dividends (see more in Corporate Governance).

  • R$ 11.949 billion in net revenue, a record.
  • 16% increase on 2019.
  • R$ 4.7 billion of adjusted Ebitda, an increase of 27% compared to 2019.
  • 27% on 2019, excluding non-recurring effects.

Veja no Painel ASG indicadores GRI 102-7, 201-1 e outros relacionados ao desempenho financeiro da Klabin.

Purchase of International Paper

Klabin took over International Paper’s corrugated cardboard and paper packaging business in Brazil. The acquisition, completed in October 2020, increased our installed capacity for corrugated packaging to more than one million tons a year.

The investment included the purchase of three packaging paper units (virgin and recycled fibers), in the states of Goias, Sao Paulo, and Amazonas. The acquisition was a significant step in the company’s growth strategy and the consolidation of its leadership in this market. With the units acquired, we also got into the Central-West and now have mills in every region of Brazil.

The incorporation of IP units creates synergy with Klabin’s growth strategy on all business fronts, diversifying and expanding our flexibility.

Progress at Puma II

The work on the first machine in the Puma II Project, which is part of our growth plan, moved forward in 2020. Although the schedule has been changed by the pandemic (see more in Covid-19), the project is expected to start operating in July 2021.

Puma II, the largest investment in the company’s history, at R$ 9.1 billion, includes the construction of two packaging paper machines, including the production of patented Eukaliner – a kraftliner made exclusively from eucalyptus fiber, with significant competitive advantages (See in the chapter Technology and Innovation).

The second machine, which will be for cardboard, has a production capacity of 470,000 tons, and operations are set to begin he second quarter of 2023.

Integrated planning

New production capacity stemming from the incorporation of International Paper units required in-depth analysis of sales, production, and logistics scenarios in the company. In 2020, we reviewed the entire sales and operations (S&OP) planning process, set to be completed in 2021. The project involved the acquisition of a tool that connects the entire sales, production, and logistics chain, from the commercial strategy for pulp and paper, to the supply of conversion units, ensuring a high level of service for customers, at competitive costs.

Debt management

In 2020 we continued debt management work, adding financial security for Klabin’s future. This means company was able to extend the average repayment period for debt from 96 months at the end of 2019 to 116 months in 2020 – almost ten years – reducing average cost.

Also noteworthy is the approval of Klabin’s Financial Indebtedness Policy by the Board. This was another step in improving our corporate governance, establishing metrics and parameters for debt and liquidity to be adopted in the company’s financial management.

Business performance

In 2020, we moved approximately15.5 million tons of pine and eucalyptus logs and chips, as well as biomass for energy generation, supplying internal demand for the manufacture of pulp and paper, in addition to the logs sold to sawmills throughout the year.

Increased use of our own wood by the pulp and paper operations reduced sales of timber to third parties by 11%, to 1.5 million tons in 2020, earning R$ 208 million in net revenue.

Klabin is gradually reducing its sales of wood to third parties because of its increased production capacity in pulp and paper.

The production of three types of pulp (short fiber, long fiber, and fluff) shows that Klabin’s diversification and flexibility has achieved positive results even in the face of such uncertainty. With the capacity to supply raw materials for various types of paper, the company offset the fall in demand observed in the global market in the printing and writing paper segment caused by the pandemic. Fluff pulp, especially as of the third quarter, served mainly the hygiene segment, which makes essential products. 

In the first nine months of 2020, pulp prices remained at the levels observed at the end of 2019. There was, however, a resumption of demand in some regions at the end of 2020. Prices of short fiber and long fiber pulp per ton delivered to China recovered by 11% and 12%, respectively.

Production was 1.545 million tons, the same as in 2019. The nominal mill capacity in 2020 was 1.575 million tons. Pulp sales increased by 3%, driven by the hygiene segment. We reached 1.53 million tons of bleached pulp, 1.117 million tons of it short fiber pulp, and 413,000 tons of long fiber/fluff pulp.

Net sales in the pulp segment closed the year at R$ 3.888 billion, up by 11% year on year, influenced by the higher volume of sales and the appreciation of the US dollar against the Brazilian real in the year.

The pandemic brought down the prices of packaging paper at the beginning of the year, followed by strong recovery in the second half of the year.

The pandemic has accelerated structural changes, which has had a positive effect on the demand for packaging papers – such as growth in e-commerce, and greater awareness of paper as a recyclable, biodegradable product made from renewable sources.

Kraftliner sales totaled 432,000tons, and net revenue, R$ 1.197 billion, increases of 11% and 21% respectively.

Highlight for sales to the foreign market that grew 19% in volume and 34% in revenue in the same comparison, also benefited by the devaluation of the real against the dollar in the period.

The card market showed an important resumption of volumes in 2020 in Brazil. The company achieved a 5% increase in sales volume and 18% revenue in 2020 compared to the previous year.

Klabin’s corrugated cardboard packaging sales reached 724,000 tons, up by 18% on 2019. Of this volume, 68,000 tons were from corrugated cardboard units incorporated from International Paper in the fourth quarter of 2020. The corrugated cardboard market grew by 6% in 2020, reflecting the growth in shipping volumes, mainly due to the strong recovery of the local market in the second half of the year, driven by increased consumption, e-commerce, and export sectors, such as protein and fruit.

Net revenue was R$ 2.694 billion, up by 24% on 2019, with an increase of R$ 258 million from the new units acquired from International Paper.

The industrial bag business, which, due to the Covid-19 pandemic, had shrunk in the first half of the year, recovered sharply in the second half of 2020.

Sales in this segment, stable compared with 2019, produced an 11% increase in net revenue.Klabin also benefited from the significant growth in e-commerce in 2020, with direct sales to e-commerce packaging up by 122%, which led the company to formulate a strategy to strengthen the supply of solutions for the segment in 2021. Learn more in Strategy for e-commerce.

Investments

  • R$ 5.174 billion invested in our operations and expansion projects. 
  • R$ 340 million of this total was allocated to forestry operations.
  • R$ 450 million was allocated to the operational continuity of the mills.
  • R$ 339 million was invested in special projects, with high and fast returns.
  • R$ 280 million is the portion of this amount included for the acquisition of International Paper’s business in Brazil.
  • R$ 4.0 billion was invested in the Puma II Project.

Sustainable debt bond

Following our sustainable development path, in January 2021, we announced the issuance of a Sustainability-Linked Bond (SLB), reinforcing our ability to generate a return for investors.

The $ 500 million operation matures in ten years with a yield of 3.2% a year. We commit to achieving three goals with ESG criteria by 2025:

  1. Water consumption equal to or below 3.68 m³ per ton of production, equivalent to a reduction of 16.7% on 2018.
  2. Minimum 97.5% reuse/recycling of solid waste.
  3. Reintroduction to the ecosystem of at least two endangered native animal species.

The operation, which is coordinated by six renowned financial institutions, consolidates our experience in the green bonds segment for social and environmental projects, reinforcing the relevance of ESG in generating value for stakeholders.

Learn more in the framework available on Klabin’s site Klabin’s Investor Relations, where information about Klabin’s performance in the capital market is also available.

Commitment to local development

Our commitment to local development is part of our essence and is registered in our Sustainability Policy. Our goal is to identify, to avoid or mitigate, all negative impacts caused by our forestry and industrial operations. At the same time, we work to enhance positive impacts through programs and social actions in education and regional development (Family Agriculture, Solid Waste, and Participatory Public Management Support programs). 

We do this through proactive and transparent engagement and frequent contact with communities, supported by a specific Social Responsibility and Community Relations manager.In 2020, given the Covid-19 pandemic, we focused more than ever on our role as a corporate citizen, reinforcing the importance of caring for people and the commitment to neighboring communities. By April 2021, the closing date of this report, we have donated more than R$ 26 million to mitigate the impacts of Covid-19. Learn more about our efforts to tackle the pandemic in the chapter Covid-19.

  • Expansion of the Public Management Support Program to 15 municipalities where we have operations.
  • 81.8% and 83.8% in the Community Acceptance Survey in Santa Catarina and 83.8% in Parana, respectively.
  • 100% of the donations made by Klabin in 2020 complied with the new guidelines for donations and sponsorships.

Our guidelines

Our social responsibility efforts include education, family agriculture, and regional solid waste management projects, as well as a program to support public management planning. All operational impacts caused by forestry companies and operations are identified, mitigated or reduced, enabling operations to the highest sustainability standards. (See related GRI indicators in the ESG Panel)

See in the ESG Panel the policies that guide us on this theme.

Social investment

Through the Private Social Investment Platform, we invest in our own projects and other projects supported by us. The initiatives must fall under one of our themes – Territory and People – which are divided into four fronts: Klabin Education, Klabin for Local Development, Klabin Environmental, and Klabin Cultural.

See our community relationship goals and status in the ESG Panel.

How we define the initiatives

GRI 203-1

The PROSAS private social investment management platform helps us define our initiatives and those that we will support, taking into account their social impact in local development, environmental education, culture and citizenship. In 2020, we invested R$ 24.9 million in projects carried out with own resources and those carried out through tax incentives, in the following initiatives in: Projects and actions in the communities, in areas of education management, public management, regional planning and the preparation of a sustainable development agenda; training and income generation efforts, which benefit small farmers and communities; monitoring, conservation and environmental education projects.

Learn more about GRI indicators related to the impacts of our operations in the ESG Panel.

Date on projects we donated to or sponsored can be consulted on the PROSAS platform.

Acceptance in communities up in Parana and Santa Catarina states

In 2020, we achieved 83.8% approval from urban and rural communities in nine municipalities where Klabin has forestry and manufacturing operations in Parana, 3.3% up year on year. The index is measured by an annual survey conducted in 18 municipalities in the Campos Gerais region. This is our best performance since 2016, when the measurement began.

In Santa Catarina, an opinion poll conducted in 15 municipalities showed 81.8% approval. We will extend the survey to all the priority municipalities we operate in by 2030.

Strong reputation

In partnership with RepTrak we also carried out a broader reputation survey among several audiences, including the communities surrounding our operations in the states of Parana, Santa Catarina, and Pernambuco, in 2020. The objective was to gauge and monitor perceptions, anticipate expectations, evaluate initiatives, and prioritize relationships with strategic audiences, including young people and opinion makers.

The average score obtained was 79, assessed as “strong” on a scale that considers 80 and above to be “excellent.” Spontaneous mentions were mostly positive, with an emphasis on job creation and the development of communities.

A “strong” reputation was also evidenced among opinion makers (the press, NGOs, research institutions, and institutional partners). Among young people, the result was “weak.” However, among this audience, Performance, Leadership, and Products and Services did well, the latter being the most important for the company’s reputation. We believe young people are important agents of transformation of the future, so understanding their perception is essential to strengthen engagement with them in the coming years. To measure the company’s reputation strategically, action plans are being put together to mitigate risks and leverage opportunities, with short-, medium- and long-term planning.

Pulp transportation at the Port of Paranagua (Parana state). Photo: Klabin’s archive

Port Terminal impact study

In 2020, we carried out the Neighborhood Impact Study (NIS) about construction of the PAR-01 Port Terminal, a project that is part of the expansion of Klabin’s operation in Paranagua. 

In March 2021, the NIS was presented to the local population in a virtual public meeting including various sectors of society. To ensure greater popular participation, the meeting was broadcast in real time by a local radio station. We also offered a hotline for questions and comments, especially for those who do not have access to the Internet.

We also presented the project to construct an exclusive walkway at the main railroad crossing point around the Port of Paranagua, which the community had stressed the importance of in conversations with stakeholders, especially the unions that represent the port categories.

Our projects

Klabin runs social projects that positively influence the social, economic, and environmental dynamics of communities, respecting their way of life and the quality of local social relationships.

Our efforts and investments strengthen the 2030 Agenda, observing the UN’s Sustainable Development Goals (SDGs) and acting proactively for positive socio-environmental development of the places where we operate.

We maintain frequent, transparent communications with the communities where we operate. Our main social projects focus on: Education, Family Agriculture, Support for Public Management and Local Development, the Environment, and Culture.

Klabin for local development

Klabin supports the strategic and participatory planning of public management in municipalities where we have manufacturing and forestry operations. The goal is to strengthen the economic, social, and environmental agendas in the communities, in a participatory way, towards sustainable development. The Public Management Support Program, family farming programs (Social Forests), the Solid Waste Program, and the Community Development Forums are part of the work.

Public Management Support Program

The Public Management Support program proposes to provide municipalities with modern management processes and tools capable of supporting planned and participatory development. The municipalities get advice from specialized consultancies on the technical development of programs, actions, goals, indicators and budgets, as well as help to develop their Goals Program, making the projects and results indicators clear.

Beginning in 2017, the program is applied to the municipalities of Telemaco Borba, Ortigueira, Imbau, Curiuva, Reserva, Sapopema, Tibagi, Rio Negro and Paranagua, in addition to Lages, Otacilio Costa, and Correia Pinto (Santa Catarina state), Angatuba (Sao Paulo state) and Goiana (Pernambuco state). The areas are a priority for Klabin, accounting for 100% of the target set in the KSDGs. 

A specialized consultancy supports the preparation and review of the strategic planning of public management and the construction of a Social Progress Index (SPI) for the municipalities, with public data and measurable, comparable indicators on the various spheres of administration. In addition, the company strengthens network partnerships to operate in social areas for the municipalities, deepening analysis of opportunities and actions by the government and communities.

From April 2020, with the emergence of Covid-19, the work to support public management was directed to mentoring in public health, carried out in consultation with health departments in 12 municipalities. The actions responded to the need for mobilization and coordinated action by society in each municipality, through municipal public health networks.

Entrepreneurial Territory Program

In July 2020, we started the Entrepreneurial Territory Program, in partnership with Brazil’s Micro-business Support Service (Sebrae). Designed for entrepreneurs and those starting out in Telemaco Borba, Imbaa, and Ortigueira, in Parana state, the program is part of the Puma II Project, and its goal is to strengthen entrepreneurship in the region given the new, constantly arising opportunities generated in the region, including those resulting from Klabin’s operations.

In just two months, four important events were held: the presentation of the project to the community; Digital Retail, to help companies expand their presence in digital channels; InovaTur, focused on tourism and hotels, restaurants, and bars; and the Entrepreneurial Circuit, for those who want to have their own business.

Registrants participated in online training and consulting sessions on diagnosis and action and innovation plans, plus the incorporation of financial and environmental sustainability into their businesses. The program is set to run until March 2022.

Social Progress Index (SPI)

In January 2021, we launched the Social Progress Index (SPI) for 37 municipalities in Telemaco Borba and Ortigueira, Klabin’s area of activity in the Campos Gerais region of Parana state.

The initiative was held in partnership with the Parana Institute for Economic and Social Development (Ipardes) and Fundación Avina, responsible for the development of the index in Parana. The SPI has been used worldwide to measure and compare social progress and direct investments in both the public and private areas.

The tool has helped cities, countries and regions measure their progress regarding the Sustainable Development Goals (SDGs), agreed by all UN member countries.

Developed by the non-profit organization Social Progress Imperative, whose head office is in Washington, USA, in partnership with Harvard Business School and the Massachusetts Institute of Technology, SPI’s differential is that it measures only social and environmental outcomes with a direct impact on the lives of the population. It considers three dimensions: Basic Human Needs, the Fundamentals of Well-being, and Opportunities. 

The SPI was used to draw up the baseline for the Puma II Project. 

The assessment of the socioeconomic situation of the region a large project is to be implemented in is critical to the adoption of mitigating programs in the social, economic, and environmental areas.

The SPI is an important tool for participatory public management support programs and for the multi-annual plans of municipalities, which will be delivered by the end of 2021, aligned with the Sustainable Development Goals (SDGs).

Telemaco Borba has the best SPI in the region

 To calculate the index for the municipalities in the Campos Gerais region analyzed, official data from public sources were used, with 1,500 people interviewed  in 12 municipalities, in December 2019.

  • 53.17 was the average SPI in the territory’s cities in 2019.
  • SDGs: This means we are halfway to achieving the Sustainable Development Goals measured by the index.
  • Above average: According to the study, Telemachus Borba, Sapopema, and Tibagi are above average.

Municipal SPIs

Development Forums

The Community Development Forum began in 2015. The initiative takes place in the municipalities in the new territories where Klabin operates, such as Angatuba (Sao Paulo state) and Goiana (Pernambuco state). The proposal is to involve several actors from organized civil society, including Klabin, and look for a new territory management model based on the discussion of solutions to local issues. The initiative has been improved since the beginning of the application of the Social Progress Index. Learn more about the indicator on the website (www.progressosocial.org.br).

Social Forests – Planning Sustainable Properties

The program to encourage family farming, which involves small farmers in nine municipalities in Parana, was extended to Santa Catarina, covering the municipalities of Otacilio Costa in 2020 and Correia Pinto and Lages in 2021. The initiative covers the stages of production, from environmental adequation to support for the marketing of food, through training, diversification, and cooperates.

Held in partnership with Sebrae and the NGO Apremavi, with the support of the municipal governments, Social Forests has served more than 600 farms. Some of the results obtained during this period include increased income for small family farms; increased food production; sales to new markets; reduced use of pesticides; the adoption of new technologies, and organized production.

In an adaptation to the digital world, brought forward by the Covid-19 pandemic, the program created a podcast in 2020, with episodes shared weekly for the group of farmers assisted by the programa.

Support for the food delivery structure

Throughout 2020, in the Covid-19 pandemic, the Social Forests program looked for alternative ways to continue assisting farmers in the sale of their products. One of the main efforts was support in structuring a delivery service using WhatsApp. In one year, more than 20,000 kilograms of products were sold through the app, earning about R$ 68,000 for small farmers.

Beekeeping and Honey production

Through this program, which began in 2005, we offered our forests for beekeeping managed by small- and medium-sized family farmers. In addition to boosting family income, the program benefits the conservation of biodiversity and ecosystems, since bees pollinate plant species, improving the productivity of other crops. Since the beginning of the program, 184.9 tons of honey have been produced and sold.

Klabin Seeding Education

The Klabin Seeding Education program aims to improve public education through school management training in priority municipalities where Klabin operates, creating opportunities for management practices that make public education more equitable, more inclusive and of higher quality.

Specialized consulting is offered for training of educators and school managers. Through the four work fronts – educational management, pedagogical training, resources and infrastructure, and evaluative practices – the goal is to improve the result indexes, such as the Basic Education Development Index, and to contribute to achieving the challenging SDG 4 – Quality Education. 

Klabin Seeding Education achieved an average improvement of 23% in the Basic Education Development Index) in state schools in Telemaco Borba, Ortigueira, and Imbau.Currently the program operates in municipal partnerships covering all the municipal schools in Telemaco Borba, Ortigueira, and Imbau, in Parana state. In all there are  243 schools with 38,000 students in 14 municipalities: Telemaco Borba, Imbau, Ortigueira, Tibagi, Reserva, Curiuva, Sapopema, Ventania, Jaguariaiva and Rio Branco do Ivai, in Parana; Otacilio Costa, Correia Pinto and Lages, in Santa Catarina, and Goiana, in Pernambuco.

The only technical forestry operation school in Latin America: in Ortigueira, Parana state

In 2020, we opened the State Center for Forestry and Agricultural Professional Education in Ortigueira, Parana state. This technical school has a structure with bedrooms, bathrooms, classrooms, kitchen, cafeteria, multi-sport court, and leisure area. To develop the project, conceived in partnership with the State Department of Education, the Regional Center of Education in Telemaco Borba, and the Municipality of Ortigueira, model schools were visited in Scandinavia, a global benchmark in the pulp and paper industry.

The school offers three technical courses: Forestry Operations, Heavy Machinery Maintenance, and Agribusiness. The first two are offered for high school graduates and are only technical), while the technical course in Agribusiness is for high school students.

Online event discusses new ways to think about teaching

In the Covid-19 pandemic, education professionals faced another challenge to reinvent their teaching methods. Klabin Seeding Education transferred all the contents from its training meetings for remote use. The main communication platforms and other virtual resources were used to serve continued training. Another strategy that worked was the establishment of meetings in live stream formats. The first one, in July 2020, attracted more than 400 participants. The second webinar had 626 participants. In addition, to recognize and valorize new teaching practices in public schools, the program launched the Good Practices Contest. This focused on the work done by elementary school and infant teachers, as well as the school managers in public, rural and urban schools in Telemaco Borba, Ortigueira, and Imbau.

Living Earth

The Living Earth Volunteer Association organizes citizenship and community action for children and young people in situations of social inequality, or with physical disabilities, as well as the elderly, with the support of Klabin employees and their families. The focus is on helping young people find their first job, with the Investing is Worth It Program, in Sao Paulo, plus blood donation and warm clothing and food collection campaigns.

Klabin Environmental

In environmental education, we have projects for teachers and students in the communities, promoting ecological awareness, respect for the environment, and conservation of biodiversity. The Klabin Caiubi, Legal Forest, Environmental Protectors, Crescer, Ecological Park and the National Private Reserves Conservation Program are the main ones.

Work in the courtyard of the Wolff Klabin State High School in Telemaco Borba (Parana state). Photo: Klabin’s archive

School refurbishment in Telemaco BorbaReforma de colégio em Telêmaco Borba

In September 2020, we started to refurbish the Wolff Klabin State High School in Telemaco Borba (Parana state). In partnership with the Parana State Government, via the Department of Education and Sports, the work includes classrooms, the hall, gymnasium, and library, including the installation of a camera surveillance system and air conditioning in the classrooms. The work, which will be completed in 2021, also includes the construction and installation of a fully equipped robotics laboratory – the first in the Campos Gerais region. In addition, the school is getting support to improve management, as part of the Seeding Education program.

Klabin Caiubi Program

This trains teachers from municipalities in Parana and Santa Catarina and the city of Feira de Santana (Bahia state), with the support of municipal administrations and institutions and partner professionals to teach ecological awareness and contribute to the formation of citizens who are aware of their responsibilities to the environment. In 2020, due to the Covid-19 pandemic, we adapted the program to a remote format.

This year, its twentieth anniversary, the program got its own website: https://caiubi.klabin.com.br/

Over the years, the program has impacted: 

  • 590 schools, 1,535 teachers and 205,617 students in Santa Catarina.
  • 974 schools, 4,224 teachers and 251,000 students in Parana.
  • 2 schools, 40 teachers and 845 students at Bahia.

Legal Forests

In partnership with the Association for the Preservation of the Environment and Life (Apremavi), Legal Forests comprises the planning rural properties, conservation, environmental education, and forest development in the state of Parana since 2008, and Santa Catarina since2005. Small- and medium-sized farmers are advised on how to be more efficient, cost-effectively, and ecological. The farmers, who do courses, take part in group work and visits, get native forest species seedlings to restore their Permanent Preservation and Legal Reserve Areas.

Environmental Protectors

We support Environmental Protectors, an initiative run by the Environmental Police in the state of Santa Catarina. Since 2005, the program has provided theoretical and practical training for elementary school students (11 to 14 years of age) on nature preservation, environmental legislation, aspects of local fauna and flora, first aid, civics, morals, and ethics. The goal is to train multipliers in environmental education.

Junior Green Force

In partnership with the Military Environmental Police in Parana, it trains environmental agents in the multiplication of social and environmental concepts. Young people receive theoretical and practical training on nature preservation, environmental legislation, local fauna and flora aspects, first aid, civics, morals, and ethics. Since its inception in 2007, it has trained 382 elementary school students from municipal schools.

Project Grow

We work on the continuous training of direct and indirect employees on environmental, health, family management, quality of life and professional growth issues, among other subjects. The project is carried out in Santa Catarina and Parana. In 2020, it served employees remotely, with innovative strategies for the continued development of participants, covering almost 12,000 people in both states, including direct employees and third parties, in various activities.

Solid Waste Program

Klabin’s Solid Waste Program, developed with the Tibagi Paths Intermunicipal Consortium since 2012, has promoted several actions to support selective collection in six municipalities in the Campos Gerais region of Parana: Imbau, Ortigueira, Reserva, Tamarana,Tibagi, Telemaco Borba, and Rio Branco do Ivai. It includes the supply of structures and equipment, assistance in formal organization of associations and cooperatives, and monitoring, training, and institutional activities for recyclable waste pickers. 

So far, 165 waste pickers have been supported by the initiative, 150 of them in Parana and 15 in Goiana (Pernambuco state), where we have another front of the program. In 2020, we formalized a new association of waste pickers in the municipality of Goiana (Pernambuco state) in a partnership between Klabin and the Goiana city hall.

In 2020, we hired a socio-environmental consultancy to support us in the management, implementation, and monitoring of the program. The work will be carried out in 2021 and focus on three fronts to strengthening and expand actions:

1. Government: raising awareness among municipal managers and the Tibagi Paths Consortium about their role in the National Solid Waste Policy and municipal responsibility in the implementation of selective collection.

2. Cooperatives and Associations: diagnosis of the current stage each of the institutions is in, action plans and monitoring of each one, focusing on increasing the monthly income earned by the cooperative and associates via improved productive efficiency. It will also promote governance, environmental education, and marketing strategies.

3.The Community: promotion of intermunicipal actions to strengthen the territory and expand environmental education and engagement among the population in selective collection.

100% circular

In a partnership with Hub Incíveis, an innovation network focused on the circular economy, we started an innovative project to transform the municipality of Telemaco Borba (Parana state) into a 100% circular territory in which various materials, such as glass, paper, aluminum, and plastic, are reused instead of being sent to landfills. In 2020, we started diagnosis for the pilot project, considering all the complexity of a city, to be extended to other municipalities.

Klabin Cultural

Among the company’s cultural development initiatives using artistic expression is the work done by the Vera Lafer Cultural Center, such as Klabin’s Girl Singers, Right Step, and Take-Off programs, and the Ema and Eva Klabin Foundation projects.

Girl Singers in video performance

Following the action under our project Each Attitude Counts, the traditional Christmas Carol singing by Klabin’s Girl Singers was recorded on video and posted on our social media channels. Established in 2004 at the Monte Alegre Unit and expanded to the Puma Unit in 2017, employees’ daughters and young girls aged from seven to 17 from Telemaco Borba and Ortigueira take part. The initiative promotes choral singing and provides teaching in rhythm and vocal techniques.

Right Step

Begun in August 2008 at the Monte Alegre Unit in partnership with Studio 3 Dance Company and expanded to the Puma Unit in 2017, the program teaches contemporary dance and capoeira employees’ children and young people from Telemaco Borba and Ortigueira, from the age of six up.

Learn more about all our Social Projects on the website: https://klabin.com.br/sustentabilidade/responsabilidade-socioambiental

Traditional communities

We map the traditional communities in our area of influence, such as quilombolas, faxinalenses (communities in Parana in small territories that make a living from the forest) and indigenous peoples. In a 10 km buffer zone from Klabin’s areas in Parana, Santa Catarina, and Sao Paulo, 161 traditional communities were identified, 99 of which were Faxinais, 48 Quilombolas, and 14 Indigenous.

We established dialogue and respect with these communities and follow Brazilian legislation and the recommendations of ILO 169, a resolution by the International Labor Organization on Indigenous and Tribal Peoples, guaranteeing their right to free, prior, and informed consent (FPIC). 

In 2020, as part of our initiatives to support the fight against Covid-19, we distributed more than 1,000 reusable fabric masks in the Queimadas and Mococa Indigenous Lands, in Ortigueira (Parana state). The communities also received 440 liters of hand sanitizer. In the Queimadas Indigenous Land, we carried out more than 240 Covid-19 tests and about 70 in the Mococa Indigenous Land. This was done in partnership with the Municipal Health Department in Ortigueira, authorized by the Special Indigenous Sanitary District (DSEI) South Coast, the National Indigenous Foundation (Funai) and indigenous leaders.

In the ESG Panel, see GRI indicator 411-1 and others related to the material theme Impacts on communities.

Learn more about our tackling of the pandemic in the chapter Covid-19.

Wood supply partners

Although most of the wood for our mills comes from our own plantations, we have important partnerships with farmers. In 2020, we started a new partnership model with farmers through Plant with Klabin (see below).

In the ESG Panel, see indicators GRI 102-9, 204-1, 308-2, 407-1, 408-1, 409-1, 414-2 and others related to the material theme Socio-environmental performance of suppliers.

Orientation to farmer in Parana state. Photo: Klabin’s archive

Plant with Klabin

In 2020, we improved our program of partnerships in Parana with Plant with Klabin, which offers minimum prices and guaranteed purchase of wood from pine and eucalyptus forests. There are three types of partnership with environmental programs that boost sustainability for farms. Klabin’s support includes efforts in compliance with environmental legal issues and certification, which is also reflected in economic and social gains.

Plant with Klabin promotes partnerships in forests and the acquisition of wood. In parallel, the Legal Forest program assists in the creation of an integrated production system on these properties, which harmonizes planted forests with other crops. All participants carry out planning for the property, so that it develops sustainably and achieves certification, attesting that production meets legal, environmental, economic, and social requirements.

With this new partnership model, we seek to maintain a stable, long-term relationship with farmers without major price fluctuations, offering partners greater visibility and security in relation to future results.

Launched in December 2020, Plant with Klabin has almost 2,000 hectares of planted forests and has established more than 30 new partnerships in Parana.

Learn more at: https://plantecom.klabin.com.br/

Product and service providers

Product and service suppliers are another important link in our value chain, contracted according to quality, conditions of service, legal and sustainability criteria, in order to ensure that aspects of ESG, such as respect for environmental legislation and human rights, are present throughout this chain.

We are signatories to the Global Compact, and we comply with external guidelines, such as the Universal Declaration of Human Rights, the Guiding Principles for Business on Human Rights, and the International Labor Organization (ILO) on Fundamental Principles and Rights at Work. These are commitments that contribute to strengthening the guarantee of human rights in the supply chain.

We also subscribe to the National Pact for the Eradication of Slave Labor, through which we commit to cross-reference our base of active and inactive suppliers, multiple times a year, with the names listed in the Register of Employers who have subjected workers to conditions analogous to slavery (the Slave Labor Blacklist).

In 2020, 7,850 active suppliers throughout Brazil made up our supply chain.

Evaluation from the standpoint of sustainability

In 2019 we adopted the EcoVadis methodology for evaluating suppliers which, focused on sustainability classification, considers issues grouped into four major themes: the Environment, Working Practices and Human Rights, Ethics, and Sustainable Purchasing.

After the diagnosis of volunteer suppliers, joint action plans are drawn up for the critical issues identified. The execution of these plans is monitored by Klabin, with indicators linked to purchasing managers’ goals.

In 2020, we outlined action plans for suppliers evaluated in the first phase and started the second cycle of evaluations, with the inclusion of 84 more partners from various regions and segments.

Another tool we use is the criticality matrix for critical suppliers in the industrial area, which allows us to identify the risks related to sustainability that they represent for the company. Social and environmental criteria count towards the selection of new suppliers and a failure to comply with legislation by them may prevent approval.

In the Painel ASG, see indicators GRI 102-9, 204-1, 308-2, 407-1, 408-1, 409-1, 414-2 and others related to the material theme Socio-environmental performance of suppliers.

More than packaging

We are market leaders in Brazil in corrugated packaging and sack kraft. We seek to deliver services, innovation, knowledge, technology, and sustainability, which are the pillars of our business.

We reinforce this positioning – summed up by “Far Beyond Packaging” – in our communications on our website, in marketing emails, participation in events, catalogs and videos, and the support provided to our customers by technical and commercial teams.

Our segments

Bag Solutions: customized sack kraft solutions that are set apart by porosity resistance, elasticity, great finish, and print quality.

Pack Solutions: corrugated cardboard packaging, resistant to different storage and transportation conditions.

E-commerce: custom corrugated cardboard and kraft sack packaging, exclusively for online sales.

Learn more on our website.

Strategy for e-commerce

E-commerce has been growing in recent years and rocketed in 2020, driven by the pandemic. At Klabin, direct e-commerce packaging sales increased by 122% year on year.

Alert to this shift, in February 2021 we presented a new strategy to the market strengthen our offering of paper solutions for the segment. e-Klabin consolidates the work already done by the company, structuring it for the e-commerce market.

e-Klabin offers the company’s experience in innovative, sustainable packaging solutions to structure service for micro-entrepreneurs and large companies.

Our teams focus on needs, according to the strategies below:

e-Klabin service strategies

  • Traditional brands that want to expand and their presence in digital sales.
  • MKTplaces a segment in which Klabin already supplies packaging to large players in the market.
  • Klabin ForYou a paper solutions marketplace for small- and medium-sized customers.

Learn more: https://e-commerce.klabin.com.br/ 

Partnership with customers

The strengthening of our positioning tied to our brand’s sustainability attributes has made us a reference in the market, which has led many customers to find out about our approach to the future before we even begin consultations or other interactions.

Added to this, our satisfaction or perception surveys are important instruments in identifying strengths and opportunities for improvement in products, processes, and performance. They are linked to indicators of quality, safety, qualification, technical support, and sustainability. 

We also adopt the Packaging School tool to analyze weaknesses and strengths throughout our customers’ production chains. This allows us to add value, offer innovations and improvements in handling products or developing processes and products.

In 2020, most contact with customers, which was virtual, had a sustainability agenda. These were opportunities in which we reinforced our positioning focused on the sustainable attributes of our products and our performance.Despite the pandemic, we were able to maintain close relationships with customers and respond to their demands. In the pulp area, for example, the awarding of the EuropeanEcolabel certificate for fluff production in 2020 answered demand from Brazilian and international customers.

Featured releases

At Klabin, the development of new products and markets is aligned with consumer behavior trends in pursuit of a more sustainable future. Research projects carried out at our Technology Center have produced innovative solutions, such as those launched in 2021, as below. More information is available in the chapter Technology and Innovation.

Ecolayer: sack kraft packaging with the application of a sustainable resin barrier, whose composition eliminates plastic film. The new barrier blocks moisture, extending the life of the packaged product, preserving its characteristics and maintaining quality. Initially focused on the segments of construction, fertilizers and seeds, itis a resistant and recyclable solution, which contributes to the circular economy.

Hydrodispersible packaging: developed in partnership with Votorantim Cements, this 100% dispersible kraft sack packaging can be added directly to concrete mixers, without the mixture losing its original characteristics. The product will be available in a pilot project, initially in the South of Brazil, in the region served by the cement plant in Rio Branco do Sul (Parana state).

Klafold GB® – Grease Barrier: cardboard packaging with an aqueous dispersion coating which creates a barrier for the greasy food market. It is made from virgin fibers and is certified for contact with food. The solution, which leaves the Monte Alegre Unit in Parana with the barrier applied, is becoming popular in Brazil, and has consolidated applications in packaging in countries such as New Zealand, South Africa, and Mexico.

Integration between ecosystems and biodiversity

Promoting sustainable and restorative forest management, integrating ecosystem and biodiversity values is part of the value proposition in the Klabin 2030 Agenda for society. The procedures adopted in our planting system include issues that help in the preservation of biodiversity and in minimizing environmental impacts.

We promote a careful cycle in planting and harvest at the appropriate time for maximum productivity in cultivated areas, respecting the fauna and flora in the forests we operate in, keeping almost half of the forest areas untouched, preserving springs and allowing forests to sequester carbon from the atmosphere.

The relationship between sustainable forest management, the conservation of natural forests and the preservation of biodiversity is an essential driver of our activities.

  • 43% of Klabin’s own land and area it manages is conserved native vegetation.
  • Fauna: 822 species identified*.
  • Flora: 1,905 species identified*.
  • Puma, deer and howler monkeys are some of the endangered species that are protected in our areas.
  • 8,839 hectares of Klabin land are Private Natural Heritage Reserves in Parana and Santa Catarina.

* 28 species of fauna and 40 species of flora identified are on the Red List drawn up by the International Union for Conservation of Union (IUCN).

In the ESG Panel, see indicators GRI 304-1, 304-2, 304-3, 304-4, 307-1 and others related to the material theme Biodiversity.

Responsible management

Telemaco Borba, , BRASIL, 08-02-2021: Plantacao de eucaliptos da Klabin (Foto: Eduardo Knapp/Eduardo Knapp, ).

Our forest units are audited annually according to Sustainable Forest Management standards. We are certified by the FSC® at the three units – Parana, Santa Catarina, and Sao Paulo – and by CERFLOR at the Parana unit.

We are also audited by customers and funding institutions. Our commitment to biodiversity is widely disseminated and evaluated by our own team in internal surveys and the monitoring of action plans, when pertinent.

The analysis of operational processes and the establishment of rules and procedures to prevent damage or mitigate it are among the actions we take to minimize the risks to biodiversity in our planted areas. To maintain a sustainable forest management system, monitoring of fauna and flora is carried out by companies specialized in external studies, and by public higher education institutions.

  • 100% of our forests are FSC ® verified.
  • 248,000 hectares of native forests given over to conservation

We have adopted mosaic management: planted forests alternate with conserved native forests. This system forms ecological corridors that allow fauna to move about and they contribute to the conservation of natural resources.

Areas with a high biodiversity index

We have two Private Natural Heritage Reserves – one in Parana, and the other in Santa Catarina, dedicated exclusively to scientific studies, environmental protection, and the preservation of water resources, contributing to the conservation of biodiversity in the Atlantic Forest biome. Since the 1980s, we have also maintained an Ecological Park, with a significant concentration of biodiversity values

Serra da Farofa Complex

A State Private Natural Heritage Reserve in Santa Catarina. It is our largest such reserve, with almost 5,000 hectares of remaining Atlantic Forest area. With araucaria forests and high-altitude fields, it is home to springs for the Caveiras and Canoas rivers. It is used for scientific research, the management of natural resources, and the maintenance of climate and ecological balance.

Monte Alegre Private Natural Heritage Reserve

Part of Fazenda Monte Alegre, in Telemaco Borba, Parana, covering 3,852 hectares, this  is also a space for scientific research and the protection of local biodiversity and water resources.

Ecological Park

Created in the 1980s, our Samuel Klabin Ecological Park is on Fazenda Monte Alegre (Parana state), covering 9. 800 hectares. It promotes biodiversity conservation, rehabilitation and welfare of animals, and the preservation of endangered wild species. The space is also used for scientific research and supporting environmental education projects.

  • 91.6% of the park area is formed of natural forests.
  • 180 specimens of 50 animal species in the park.
  • Enclosures reproduce the animal habitats, ensuring a better quality of life.
Parana, BRAZIL, 08-02-2021: Klabin’s Ecological Park. Anesthetized puppy from Mato receives care from the veterinarian Taimara Santana at the Veterinary Clinic of Parque Ecologico (Photo: Eduardo Knapp / Eduardo Knapp,).

Re-fauna Project presents first results

A partnership between the Klabin Ecological Park and the Re-fauna Project is changing the scenario for tapirs threatened with extinction in the state of Rio de Janeiro, after more than one hundred years. After receiving three animals (one female and two males) in 2018, the Guapiacu Reserve recorded the first birth in 2020.

The Ecological Park has had a tapir breeding project since the late 1990s. The three animals sent to Rio de Janeiro, which were born in the park between 2000 and 2008, are the second generation for the project.

In the ESG Panel see indicators 304-1, 304-2, 304-3 e 304-4 and others related to the material theme Biodiversity.

Nature Interpretation Centre (Cinat)

Our support for biodiversity research was boosted by the opening of the Nature Interpretation Center. in March 2019. In a strategic part of the Serra da Farofa Complex Private Natural Heritage Reserve, in Santa Catarina, it has the capacity to accommodate up to 40 researchers. The Conservation Unit is an important site for the development of studies, with more than 570 species of flora and 357 species of fauna identified over 5,000 hectares of the Atlantic Forest and High-Altitude Fields.

In 2020, Cinat won an award at the 27th edition of the Ecology Expression Program in the Conservation Units category, receiving the Green Wave trophy, the leading environmental award in southern Brazil.

In the ESG Panel, see indicators 304-1, 304-2, 304-3 and 304-4 and others related to the material theme Biodiversity.