Regarding pulp supply, key international markets benefited from increased availability of short fiber resulting from new entrants in the sector, says Suzano CEO

Regarding pulp supply, key international markets benefited from increased availability of short fiber resulting from new entrants in the sector, says Suzano CEO

-Suzano to start most competitive and advanced pulp plant site in 2024 at Ribas do Rio Pardo
-Suzano's Annual Report highlights 2023 Pulp Market Challenges and Cost Reductions
Suzano, the largest eucalyptus pulp manufacturer in the world, one of the largest paper producers in Latin America, the leader in the toilet paper market in Brazil and a benchmark in bioproducts through the development of sustainable and innovative solutions from renewable sources.

The Pulp and Paper Times:

“In 2023, Suzano faced a challenging pulp market as a result of price volatility and lower volumes. Conversely, we also executed a record investment of R$18.2 billion in our growth and modernization projects, adding up to R$51.2 billion since 2019, when we carried out the merger that created Suzano S.A. And this has only been possible thanks to a strong balance between our financial discipline and capital allocation focused on the company’s strategy, which has gradually led us to generate and share value with our stakeholders”, The annual report of Suzano for FY 2023 stated.

Pulp is the basis of our business. In 2023, it accounted for 77% of Suzano net revenue, with 93% of its total pulp sales being to international markets. Our other business segments accounted for 23% of our net revenue, which totaled R$39.8 billion in the year. Suzano’s pulp sales totaled 10.2 million tonnes, a 3.6% decrease compared to 2022.

Mr. Walter Schalka Chief Executive Officer, Suzano said that in 2023, we faced a challenging pulp market, affected by a drop in price, especially in the first half of the year. Conversely, we experienced a drop in cash costs throughout the year, primarily as a result of lower input consumption and prices. Regarding pulp supply, key international markets benefited from increased availability of short fiber resulting from new entrants in the sector.

“It is clear to us that we must not hold ourselves back in our pursuit of new business models, productivity and efficiency. We also must have an impact on society. The combination of innovation with sustainability, two elements that make up our DNA, enables us to develop biosolutions for a society that is undergoing a transformation” he said. 

Mr. Walter informed, We made progress in the construction of the Cerrado Project, in Ribas do Rio Pardo, which remains on schedule to start operations in 2024. This will be our most competitive pulp plant and our most advanced site from a social and environmental perspective, enabling us to maintain our relevance in pulp. And to be best-in-class in terms of cost, we accelerated our efforts at an average rate of 1.2 million eucalyptus seedlings planted per day.

“We were also successful in making progress across our value chain with the completion of the purchase of Kimberly-Clark’s tissue business in Brazil. We incorporated the Neve® brand and announced the construction of a new tissue plant in Aracruz.” He stated.

The report stated about expansion plan, In 2023, Suzano purchased Kimberly-Clark’s tissue business in Brazil, an important move to strengthen our Consumer Goods unit. The acquisition included a plant located in Mogi das Cruzes, with an installed capacity of approximately 130,000 tonnes per year, which increased our production capacity of toilet paper, reusable cloths, napkins and facial tissues. The addition of the Neve® and Grand Hotel® brands to our brand portfolio makes us the Brazilian market leader in the toilet paper segment, bringing us closer to end consumers. Other global brands sold by Kimberly-Clark in Brazil, such as Kleenex® and Scott®, as well as the K-C Professional line, were licensed to be used by Suzano for a fixed term.

“We are poised to take a leap forward in the supply of our Eucafluff®, with a new line in Limeira, and advance initiatives to replace fossilbased materials with products” Mr Walter stated.

NEW TISSUE PLANT 
Suzano announced an investment of R$650 million in the construction of a new tissue paper plant in the town of Aracruz, which will increase our production capacity by 60,000 tonnes. This move will also increase our competitiveness in the southeast region of Brazil, our largest consumer market in the country. We see enormous potential for growth in the tissue segment in Brazil. According to the consulting firm Fastmarkets RISI, per capita consumption of tissue is still low in Brazil compared to other countries. In 2021, the country had an annual per capita consumption of 6.3 kg of tissue, while the United States had 26 kg, Chile 14.5 kg and Mexico 9.7 kg.

Bio-OIL 
Suzano is also making progress in the development of bio-oil from eucalyptus biomass (organic matter). We have been engaging in discussions to form partnerships with major players in the oil value chain, and have acquired a stake in the American company Ensyn Corporation, which invests in the production of renewable fuels. Our plans include the construction of the first bio-oil industrial site, in addition to more investments in research to diversify bio-oil applications and ensure the effectiveness of new technologies.

CHALLENGES IN WOOD SUPPLY
The Report stated about wood market, We monitor global demands, including the use of pulp as biomass for energy, in construction and in green steel, new pulp projects, and the growth of the wood-based textile fiber market. According to the Food and Agriculture Organization (FAO), while wood consumption has increased by 28% in recent years, wood sources have reduced by 4%. Supply is directly impacted by climate change (extreme weather events, fires, pests and diseases), trade restrictions and restrictions on new farms. In Brazil, the area occupied by cultivated eucalyptus has not kept up with the growing demand for biomass. However, we are working to increase productivity in the coming years and reduce both the distance between our farms and plants and our dependence on third-party wood. Increasing productivity involves the continuous introduction of new genetic material, the relocation of our forest base according to climate research and productive potential, a combination of clone allocation with environmental mapping, and best practices in forestry according to micro-regional characteristics (precision forestry).

Suzano Ventures
In 2023, Suzano made two investments through its corporate venture capital fund, Suzano Ventures. The first investment was in Allotrope Energy, a UK-based startup working on the development of lithium-carbon batteries made from biomaterials. The technology developed by the startup enables the production of lithium-ion batteries and capacitors that are more sustainable, perform better and provide an ultra-fast charging alternative. The partnership includes an investment of up to US$6.7 million from Suzano Ventures to finance the production of lithium-carbon batteries using carbon extracted from lignin, a widely available biomaterial resulting from our pulp production process. In addition to financial support and the supply of biomaterials, we are making our teams in Brazil, Canada and Israel available to support this innovation and the commercialization of the new technology, as well as the development of a global supply chain to manufacture the new batteries.
 

Web Title: Regarding pulp supply, key international markets benefited from increased availability of short fiber resulting from new entrants in the sector, says Suzano CEO