BTG Pactual Pulp & Paper Day...BTG Pactual – Pulp & Paper Day ... Corporate Overview 12 Suzano is...
Transcript of BTG Pactual Pulp & Paper Day...BTG Pactual – Pulp & Paper Day ... Corporate Overview 12 Suzano is...
BTG Pactual – Pulp & Paper Day
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Disclaimer
Certain statements in this presentation may constitute forward-looking statements. Such statements are
subject to known and unknown risks and uncertainties that could cause the Company’s actual results to
differ materially from those set forth in the forward-looking statements. These risks include changes in
customer demand for the Company’s products, changes in raw material costs, seasonal fluctuations in
customer orders, pricing actions by competitors, significant changes in the applicable rates of exchange
of the Brazilian real against the US dollar, and general changes in the economic environment in Brazil,
emerging markets or internationally.
01 | Pulp Market
02 | Suzano’s Pulp
03 | Pictures
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Market pulp accounts for 15% of total fibers for paper production.
Pulp and Paper Production Chain
1 Bleached Eucalyptus Kraft Pulp | 2 Bleached Hardwood Kraft Pulp | 3 Bleached Softwood Kraft Pulp | 4 Included Unbleached Kraft Pulp and sulfite | 5 Includes Mechanical Pulp
Source: Poyry (2013) and PPPC (Fev/13)
23
2 9
19
4
2013e
221
31 51
111
2013e
Corrugated
Newsprint
Others
Million t
on Printing & Writing
Tissue Paperboard
414
Production (MM ton)
Minerals 8%
380
Total fiber
consumption
BSKP3
58
Others4
BHKP2
BEKP1
194
Recycled
186
Virgin fiber
128
Integrated
pulp
58
Market pulp5
414
Global
production of
paper
51%
49%
69%
31%
Mechanical Pulp
Pulp Demand Growth Drivers
5
Historically there is a high correlation between GDP and paper consumption
1 Excluding China and Japan
Source: 2010 paper consumption data from Poyry (nov/2011) and 2011 GDP per capita information from World Bank (fev/2013)
China
68 kg/ha/year
GDP per capita:
US$ 5 k
USA
233 kg/ha/year
GDP per capita: US$ 48 k
India
9 kg/ha/year
GDP per capita: US$ 1 k
Brazil
47 kg/ha/year
GDP per capita: US$ 13 k
North America
226 kg/ha/year
Latin America
44 kg/ha/year
Asia1
19 kg/ha/year
Europe
Western: 185 kg/ha/year
Eastern: 47 kg/ha/year
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Pulp Demand
The competitiveness of eucalyptus fiber favors the replacement.
52 54
52 53 54
56 58 58 59 60 61 62
11
13
14 16 16
17 18 19
20 21
22 23
11
10 9 9 10 10 9 9 9 8 8
22 23 22
21 22
23 23 23 23 24 24 24
8 8 6 7 7 7 7 7 7 7 7 7
0
10
20
30
40
50
60
70
0
5
10
15
20
25
30
35
2006 2007 2008 2009 2010 2011 2012 2013e 2014e 2015e 2016e 2017e
Tota
l Mark
et V
olu
me
(MM
ton)
Volu
me b
y f
iber
type
(MM
ton)
Market Pulp BEKP Others BHKP BSKP Other1
CAGR BEKP: +6.7%p.a | Others BHKP: -1.7 %p.a.
CAGR BEKP: +6.4% p.a. | Others BHKP: -4.3%p.a.
2 3 4
1 Market Pulp: includes mechanical pulp | 2 Bleached Eucalyptus Kraft Pulp | 3 Other Bleached Hardwood Kraft Pulp | 4 Bleached Softwood Kraft Pulp| 5 Others: includes UKP, Sulphite and Mechanical Pulp
Source: PPPC (February/2013)
5
Brazilian Competitiveness
7
Suzano is in the lowest cash cost region
Source: Hawkins Wright (March/13)
*Other includes New Zealand, Argentina, China and South Africa.
Cash Cost CIF / Europe (US$/ton)
642 592
556
544
365
555 552
506 504 544
539 515 449
424
518
379
379 392
397 417
481
647
569
658
Swed
en
Jap
an
Fran
ce
Can
ada
Swed
en Ja
pan
U
SA
Bra
zil
Fin
lan
d
Oth
er A
sia
Fran
ce
Oth
er
USA
Fin
lan
d
Ch
ile
Ru
ssia
Ch
ina
Ind
on
esia
Afr
ica
Ru
ssia
Ch
ile
Iber
ia
Wes
t C
anad
a
BC
Co
ast
East
Can
ada
16.3 MM ton
Low Cost High Cost High Cost
22.6 MM ton 8.0 MM ton 9.6 MM ton
Low Cost
Hardwood Softwood
395 404 413 445
2011 2012 2013e 2017e
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Pulp Global Consumption
Demand for paper is forecasted to grow 1.9% p.a. until 2017.
CAGR
+1.9% p.a.
Growth in paper demand is driven by
consumption growth in emerging markets
Consumption of tissue grows even in developed
countries, regions where P&W paper consumption
is declining
Eucalyptus pulp is highly suitable for
manufacturing papers for sanitary purposes
Paper Demand
(million ton)
Paper Demand Increase
(million ton)
Paper Demand by Segment – 2017e
Source: Poyry (2013)
413 445 24 3 3 (2) 4
2013e Asia LatinAmerica
Europe NorthAmerica
Other 2017e
CAGR 13e-17e Total Volume
Fins Sanitários +3.5% a.a. 4.6 Mt
Papelcartão +2.8% a.a. 5.8 Mt
Especiais +0.6% a.a. 0.8 Mt
I & E +0.5% a.a. 2.2 Mt
Outros +2.4% a.a 18.3 Mt
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Pulp and Paper Start-ups
Paper capacities start-up are being implemented, mainly in Asia, to meet demand driven by significant paper consumption growth in the region.
Start-ups, Clousures, Conversions and Restarts until 2014
P & W
Tissue
Net new capacity until 2014
(million ton) Closure of uncompetitive pulp capacity
New tissue machines in Asia will demand
eucalyptus market pulp
Balanced market in 2013: the stronger paper
demand, mainly in Asia, absorbs the supply from
new pulp capacity
(1) Figure considers 0.4 Mton of expansion and 4,1 Mton projects under construction and start-ups until 2014: Montes Del Plata, Suzano – Maranhão Unit, Ilim, Stora – Enso Beihai and Oji (2) Figure includes 1.8 million tons of capacity closure and conversions and 0.04 million ton of capacity restarts
Source: Hawkins Wright Outlook (Dec/12) and Capacity Changes table (Feb/2013)
(million ton) Start-ups Closures, Conversions and
Restarts Total
Paper +4.6 -0.6 +4.0
Printing & Writing +1.1 -0.6 +0.5
Tissue +3.5 - +3.5
Market Pulp +4.51 -1.8² +2.7
• BSKP
• BHKP
• Others*
+0.6
+3.8
-
-0.4
-0.9
-0.5
+0.3
+3.0
-0.5
0.5
2.8
3.5
Paper Pulp
4.0
*Includes Mechanical Pulp, Sulphite and Unbleached
Absorption capacity of Pulp start-ups
10
4.0 Mt
New Paper Capacities
3.5 Mt Tissue
0.5 Mt P&W
New Paper Capacities per Segment
Considering 70% of consumption of virgin fiber
Considering 70% of consumption of virgin fiber
2.5 Mt
0.2 Mt
Virgin Fiber consumption
2.7 Mt
Virgin fiber additional demand
Balance: Supply / Demand
New capacities, Closures, Conversions and Restarts in 2013 and 2014
2.7 Mt
New Pulp Capacities Oji (+440Kt)
Ilim (+490Kt)
Montes del Plata (+1300Kt)
Suzano (+1500Kt)
Stora Enso (+400Kt)
Others(+355Kt)
Jari (-420Kt)
Domtar (-120Kt) Cloquet (-450Kt)
Others(-810Kt)
New Pulp Capacities
Pulp Closures
01 | Pulp Market
02 | Suzano’s Pulp
03 | Pictures
Corporate Overview
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Suzano is a forestry-based company, publicly traded, controlled by Suzano Holding. Suzano operates in the pulp and paper businesses.
Structural competitive advantages
Pulp production costs: one of the lowest in the world
Leader in the regional paper market
Certified plantations and products
Organic growth in pulp
New business: biotechnology
Market cap: R$8.6 billion on 03/31/13
Controlling
Group
Treasury
56%
2%
Capital Structure (March/13)
Free Float 42%
Forests
Ports
Mills
Railroad
“Carajás”
Railroad
Maranhão
“Norte e Sul”
Railroad
Itaqui Port
Mucuri
Portocel
Vitória
Santos
Piauí
Limeira
Suzano Embu
Rio Verde
Forestry Assets
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Suzano’s investment in R&D over many years allows the Company to expand its forestry assets to the northeast region of Brazil.
2013
Total area (k ha) 1 825
Total planted area (k ha) 2 440
Own planted area (k ha) 1 354
Forest Partnership Program (k ha) 86
Own Preserved Area (k ha)1 322
Average Distance in Bahia (km)2 73
Average Distance in São Paulo (km)2 237
Base 03/31/2013 1 Own and leased areas 2 Figures consider own, leased and third-parties areas
2013
Annual planting (k ha) 53
Planted seedlings / day (k) 219
Note: Both own and leased land can suffer variation up to 5% quarter over quarter.
The total amount can differ due to rounding.
SP
Total: 187 k ha
Planted: 117 k ha
BA, ES and MG
Total: 245 k ha
Planted:
132 k ha
MA, PI and TO
Total: 392 k ha
Planted: 105 k ha
SP
MG
BA
ES
TO
PI
MA
Maranhão Unit
Project Overview
Teresina
PARÁ
MARANHÃO
PIAUÍ
BAHIA
TOCANTINS
Imperatriz
São
Luís
Note: Cidelândia refers to the plantations in forestry assets acquired from Vale
CR
NSR
CEARÁ
MINAS GERAIS
GOIÁS
DF
ESPÍRITO
SANTO
RIO GRANDE DO NORTE
PARAÍBA
PERNAMBUCO
ALAGOAS
SERGIPE
Carajás Railway - CR
Norte Sul Railway - NSR
Maranhão Mill
Imperatriz Porto
Franco
Cidelândia
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Forestry
25 year research history in the region
ᅳ Annual nursery capacity near the site of 15 million of
seedlings
ᅳ Competitive cost of land
Long-term timber supply: ~70% self-sourced from
Suzano own forest
Industrial
Scheduled start up for 4Q13
1.5 million ton/year eucalyptus market pulp
ᅳ 100MW excess energy available for sale
State-of-the-art technology and top tier equipment
suppliers contracted
Capacitar Project
Logistics
Outbound local logistics based on railways
Export through a port located in the city of São Luís,
state of Maranhão
Strategically located for pulp distribution to the North
American and European markets
Management
Professional management with vast project execution
experience
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Pulp Assets
Sustainable and organic growth: Presence in main international markets and strategic relationship with clients.
297 363 412 405
1,310 1,445 1,435 1,435
1,607 1,808 1,847 1,840
2010 2011 2012 LTM
Domestic Market Exports
Sales Volume
(‘000 ton)
Technical support at each international office: China, Switzerland and USA
80% of total sales through long-term contracts
Over 130 active clients
Long-term strategic partnerships with clients:
− Logistics
− Technology
− Pre- and post-sale technical assistance
Focus on value-added strategic segments
Brazil 22%
North America 9% 32% Europe
Latin America 2%
Asia 35%
Printing & Writing 23%
42%
Tissue
Special 26%
Packaging 8%
Others 1%
Pulp Sales Destinations
LTM
Pulp Sales per Segment
LTM
Note: Figures of last 12 months ending on 03/31/2013.
Production Capacity
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784 915 1,080 1,100 1,100 1,100 1,100 1,290 1,290 1,290
456 570
640 820
1,650 1,750 1,750 1,920 1,920
3,420
1,240 1,485
1,720 1,920
2,750 2,850 2,850
3,210 3,210
4,710
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e
Maranhão
Unit
Paper Market Pulp
Suzano’s production capacity has increased by 70% in the last 6 years. The start up of Maranhão Unit will increase its capacity to 4.7 MM ton/year of pulp and paper.
Production Capacity
(‘000 ton)
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Maranhão Unit
Dec/11 Mar/13
Earth moving Concluded Concluded
Overall physical
construction 11% 79%
Engineering 49% 97%
Procurement 7% 98%
Infrastructure
construction 34% 95%
Civil works 0% 88%
Suppliers contracted 70% Concluded
Eletromechanical
assembly 0% 31%
People working on
the construction of
Maranhão Unit
1,800
people
12,000
people
Dec/11
Mar/13
01 | Pulp Market
02 | Suzano’s Pulp
03 | Pictures
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Pulp Bale
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Overview
Maranhão Unit (April/2013)
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Log Transporter from the wood yard
Maranhão Unit (April/2013)
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Fiber Lines
Maranhão Unit (April/2013)
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Drying
Maranhão Unit (April/2013)
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Turbo generators and Boiler
Maranhão Unit (April/2013)
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Caustification and Lime Kilns
Maranhão Unit (April/2013)
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Water Treatment
Maranhão Unit (April/2013)
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Effluent Treatment
Maranhão Unit (April/2013)
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Cooling Towers
Maranhão Unit (April/2013)
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Maranhão Unit (April/2013)
Control Room and Labs
Investor Relations
Investor Relations
www.suzano.com.br/ir