Message from the Board
In March, when the World Health Organization declared the world was facing the COVID-19 pandemic, we had already understood that 2020 would be an unusual year. It would require extra discipline and resilience to fulfill our business plan without neglecting everyone’s safety, health and well-being. And that’s what we did.
At that point, we were still unaware that such commitment, indistinctly undertaken by the entire company – despite the enormous impacts caused by COVID-19 on world economy and society – would lead us to our best-ever results in all areas of the ESG profile. This means that, in addition to substantial economic achievements, resulting from quick, but always careful, actions to fully operate during the pandemic, we managed to attain exceptional performance in these three sustainability realms – environment, social and governance.
As packaging producers for industries considered essential amidst the pandemic – such as food, beverages, hygiene, cleaning and pharmaceutical goods – we experienced growth in all business lines in 2020. The Company’s net revenue reached R$ 11.9 billion – a historic record – with a 16% increase against 2019. Our Ebitda stood at R$ 4.7 billion, once again showing annual growth – a result 27% higher compared to 2019, excluding non-recurring effects.
Another significant fact was the conclusion of the purchase of International Paper’s packaging paper and cardboard packaging businesses in Brazil for R$ 330 million. The acquisition represented an important step in our growth strategy and in consolidating market leadership. With the units acquired from IP, we arrived in the Midwest and now have factories in all regions of the country.
Also as part of our growth plan, we will start production of the first machine of the Puma II Project next July. The Project comprises the construction of two packaging paper machines: including the unprecedented production of the already patented and awarded Eukaliner, a kraftliner made exclusively of eucalyptus fiber, which brings significant competitive advantages; and a paperboard machine, scheduled to start operating in the second quarter of 2023.
In line with the long-awaited achievements, we joined the Dow Jones Sustainability Index 2020/2021, in the Emerging Markets category, and we also became the only Brazilian company in the pulp and paper sector to be included in the Dow Jones Sustainability World Index, an accomplishment that made us all extremely proud.
Also at the international level, recognition of our significant performance regarding the environment, with emphasis on how seriously we deal with the issue of climate change, earned us an invitation to join the select Business Leaders Group, which has discussed the agenda to be proposed at the COP26, Climate Conference scheduled for November 2021. Still on this topic, we were pleased to have our goals for reducing greenhouse gas emissions (scope 1 and 2) approved by the Science Based Targets Initiative (SBTi) ) by 25% per ton produced by 2025 and by 49% by 2035, taking 2019 as the basis.
2020 was also a year of progress in our commitment to the principles of the Global Compact and the UN Sustainable Development Goals (SDGs). To ensure and foster our contribution, we launched the Klabin Sustainable Development Goals or KSDGs, with short, medium and long term targets. Driven by the SDGs, our KSDGs organize environmental, social and governance frameworks into a priority structure, adherent to Klabin’s strategic growth plan and long-term vision.
One of these goals concerns having a greater number of female leaders (coordinators, managers and directors) at Klabin. Although we reached a percentage of almost 14% – comparable to the industry, even slightly higher than the average – we are still far from what we aspire, which is to reach 30% of women in leadership positions by 2030. Thus, we will continue striving to expand this baseline in the coming years.
In the social realm, as expected, considering the scenario marked by the pandemic, we more than ever assumed our role as a citizen company, reinforcing the importance of caring for people and our commitment to the communities where we operate. Internally, we mobilized to implement health protocols on all work fronts and on special committees for safe and technical decision-making.
Together with the communities, between March 2020 and April 2021, we gathered donations of over R$ 26 million to mitigate the impacts of COVID-19 across Brazil. The funds were used to help more than 30 communities, from 10 states where Klabin is present, showing, as the motto of our campaign, that Every Attitude Counts.
The actions impacted three fronts: health, including the opening of a field hospital in Telêmaco Borba; social assistance, with the distribution of thousands of food kits and hygiene products, campaigns and technical support to local governments and financing support to vendors, among other actions; and income generation for professionals from vulnerable sectors, such as recyclable material collectors.
In this scenario, one of the highlights was the innovative development of our laboratories that allowed the production of sanitizer gel from microfibrillated cellulose (MFC). It is extracted from wood to replace carbomer, a fossil input that is not manufactured in Brazil. Four tons of sanitizer gel were produced and packaged in exclusive packages made with Klabin’s kraft paper and delivered to healthcare professionals.
In 2020, Klabin was also recognized on several fronts: as the most sustainable Pulp and Paper company, by Época Negócios 360; as best in Agribusiness and Pulp and Paper, by Exame Magazine’s Melhores e Maiores 2020; and as company of the Year in Communication, title granted by the Brazilian Association of Business Communication (Aberje). In addition, our Investor Relations team was recognized as the best in Latin America in the Pulp and Paper sector, according to the ranking by Institutional Investor magazine.
Also, the year saw the launch of Klabin Invest, a communication platform featuring original content for investors and those interested in Klabin’s universe. We have adopted more attractive and appropriate tools to support the expansion of our investor base of private individuals.
In the corporate governance area, we made progress with the extinction of royalty payments, as voted at the Extraordinary General Shareholders’ Meeting. Other noteworthy facts were the approval of three advisory committees to the Board of Directors and the Indebtedness and Dividend policies, which demonstrates even greater transparency of the Company regarding its stakeholders.
With so many achievements and results that exceeded our expectations, it would be a year to celebrate, were it not for the fact that we registered, with deep regret, a death among our indirect employees, in a traffic accident. The occurrence led us to reflect and promote a thorough review of our Contractors Management Plan in order to standardize processes and best practices.
Our goal is to scale down to zero the number of lives changed as a result of occupational accidents that are considered very serious and permanent in our operations – and this extends to our contractors. Nor can I fail to mention the harsh consequences of the pandemic. It changed our daily routines, the so-called “normality” we were used to, and, more importantly, took so many lives.
I would like to thank the Board of Directors and the Controllers, employees, investors, our customers, vendors and partners, who, despite this atypical year, helped us build a sense of renewal for future – at this very moment, with our hopes concentrated on the massive vaccination against COVID-19 becoming a reality in the short term. Only then, Brazil’s society and economy will be able to resume their course towards growth and trust for better days.
Chief Executive Officer