Displaying items by tag: Suzano
Driven by strong performance, Suzano’s leverage in USD drops to 2.7 times
Suzano, the global benchmark in the manufacture of bioproducts developed from eucalyptus, announces its results for the three months to September 2021 (3Q21), with operating cash generation reaching R$5.2 billion, a new quarterly record since Suzano’s inception following the merger between Suzano Papel e Celulose and Fibria in January 2019. During the 12-month period ended September 2021, operating cash generation totaled R$17 billion.
Adjusted EBITDA, another important indicator of the company's financial performance, reached a record R$6.3 billion in 3Q21. Due to the increase in adjusted EBITDA, combined with the fresh reduction in net debt to US$10.7 billion, ratio of net debt to EBITDA ended the quarter at 2.7 times in USD. With this, the company concludes its financial deleveraging cycle after the merger with Fibria and kickstarts a new phase of expansion with the construction of a pulp mill in Ribas do Rio Pardo, Mato Grosso do Sul state.
Suzano’s strong results in recent quarters underline its competitive strength and cash generation potential. “This new quarterly record was achieved in spite of inflationary pressures - especially on commodities, and the logistics challenges that have marked international trade in 2021,” says Walter Schalka, CEO of Suzano.
The 3Q21 results were driven by strong sales volume across all businesses. In the pulp segment, sales volume totaled 2.7 million tons. The company’s inventory levels remain below the desirable level from the operational standpoint. In the paper segment, sales volume totaled 337 thousand tons, higher than in the 3Q19, before the pandemic. Suzano’s net revenue came to R$10.8 billion in the period from July to September.
In the last line of the balance sheet, the weakening of BRL against USD at the end of the quarter was chiefly responsible for the negative net result of R$959 million. This is a noncash effect and is primarily explained by the balance of dollar-denominated debt when translated into Brazilian real.
Suzano announced two important developments after the end of Q3. As part of its ESG agenda, the company announced its revised carbon removal target, bringing its goal to remove 40 million tons of carbon from the atmosphere by 2030 forward to 2025. On the expansion front, the company today announced that its Board of Directors has approved the construction of a mill in Ribas do Rio Pardo. Details of the project will be disclosed on November 5.
“Our strategy remains focused on long-term results and on creating value for all our stakeholders. With regard to discussions on the climate crisis, since we understand that effective measures in the short term are critical, Suzano reiterates its commitment to the planet and to people by bringing forward its carbon removal target. By announcing our new goal, we hope that governments, companies and society also revisit their commitments so that COP26 becomes a strategic milestone for the advancement of a new low-carbon economy,” says Schalka.
Suzano is a global reference in developing sustainable and innovative solutions from renewable sources, guided by its purpose of renewing life inspired by trees. It is the world’s leading eucalyptus pulp producer and one of Latin America’s largest paper producers, playing a part in the lives of over 2 billion people from its 11 mills across Brazil and the joint operation Veracel. The company, whose history for over 97 years, has an installed capacity of 10.9 million tons of market pulp and 1.4 million tons of paper a year, and exports to more than 100 countries. Its operations are based on Innovability - Innovation at the service of Sustainability - and on the highest levels of social, environmental and corporate governance practices, and its shares are traded on stock exchanges in Brazil and the United States. For more information, visit www.suzano.com.br/en/
1t.org is a World Economic Forum initiative aiming to inspire and engage global stakeholders to pledge to restoring forests and the planet.
Suzano, the world's leading eucalyptus pulp and paper producer and a global benchmark in the manufacture of bioproducts developed from eucalyptus, has joined the new 1t.org Corporate Alliance, becoming part of a global movement to conserve, restore and grow more than 2.5 billion trees in more than 50 countries by 2030.
Suzano is one of 24 partners joining the 1t.org Corporate Alliance, a project aiming to bring business leaders with a mutual vision to plant one trillion trees by 2030 to meet our climate and biodiversity goals. 1t.org is part of the World Economic Forum’s efforts to accelerate nature-based solutions and was set up to support the UN Decade on Ecosystem Restoration 2021-2030.
The 1t.org mission aims to promote nature-based solutions by mobilizing, connecting, and empowering the global reforestation community. The platform facilitates the sharing of best practices and promotes responsible forestation measures as well as scalable solutions with global impact.
As part of our innovation initiatives, Suzano is the first Brazilian company to join the group. One of Suzano's long-term objectives to 2030 is to preserve and connect half a million hectares of designated high-priority land in the Cerrado, Atlantic Forest and Amazon biomes. It is on the basis of this commitment that the company joins the 1t.org initiative and begins to work towards the identification and engagement of other partners to join this ambitious target.
Commenting on Suzano’s partnership, Pablo Machado, Executive Director for China, who is currently responsible for Suzano's sustainability work said, “‘Renewing life inspired by trees' is one of Suzano’s core values. Committing to 1t.org’s mission was therefore an obvious decision. Our ambitious conservation work will contribute to the 1t.org mission to conserve, restore and grow more one trillion trees by 2030, and we look forward to cooperating with the existing partners and engaging new ones to achieve this mutual target.".
"Suzano’s pledge to connect 500,000 hectares of priority biodiversity areas in Brazil highlights the importance of maintaining and restoring biodiversity to the company. By establishing these biodiversity corridors our mission is to address the adverse impacts of forest fragmentation on native flora and fauna. It is particularly important to see key players in the industry engage for conservation within and beyond their operations. At 1t.org we are excited to have Suzano join our first cohort of global pledges and look forward to seeing the results of their work.” said Nicole Schwab, Co-Director Nature-Based Solutions, World Economic Forum.
Suzano, as well as 1t.org, understands that forests are vital for the prosperity of the planet. Our global forests are responsible for capturing and sequestering carbon from the atmosphere, regulating global temperatures and freshwater flows, replenishing groundwater, anchoring fertile soil and acting as flood barriers. Today, Suzano has 975,000 hectares of land designated for conservation under its management.
Suzano’s vast forest base lends to the company’s status as a climate positive company, given it captures more greenhouse gases than it emits. As well as its biodiversity goals, Suzano has a series of clear and ambitious targets including its SDG-aligned Long-Term Goals tackling issues relating to carbon emissions, poverty, plastic pollution, inequality and more. These commitments, as well as the biodiversity goals, are public and can be monitored through the https://centraldeindicadores.suzano.com.br/en/long-term-goals2/.
Suzano is the world's leading eucalyptus pulp producer and one of Latin America's largest paper producers. Guided by its purpose of renewing life through trees, Suzano is a global player in developing sustainable and innovative solutions from renewable sources. Today the 97 year old company plays a part in the lives of over 2 billion people via its 11 mills across Brazil and has the capacity to produce 10.9 million tons of market pulp and 1.4 million tons of paper a year, exporting to more than 100 countries. Suzano’s shares are traded on stock exchanges in Brazil and the United States.
39% of Suzano’s debt linked to social and environmental commitments
Suzano, the world's leading eucalyptus pulp and paper producer and a global benchmark in the manufacture of bioproducts developed from eucalyptus, announces the completion of a new seven-year (2028) US$500 million Sustainability-Linked Bond (SLB) linked to social and environmental targets. The capital raising received high levels of investor interest, attracting USD 3.4bn in demand - 6.8x oversubscribed.
The targets have clear links to Suzano’s Environmental, Social and Governance commitments around diversity & inclusion (D&I), as well as its continued focus on conservation and promoting biodiversity.
Specifically, Suzano is dedicated to:
- Increasing the representative of women in leadership positions in the Company to 30% by the end of 2025 (16% of women were in leadership positions in 2019), and
- Decreasing the intensity of water captured in industrial operations by 12.4% to 26.1 m3/ton produced or less by the end of 2026 (from 29.8 m³/t in 2018).
Julio Ramundo, Director of Corporate Finance at Suzano, commented: “We are delighted with the outcome of this new issuance. Once again, we received high investor demand, driven by ongoing investor appetite for climate-conscious capital opportunities. That has translated into reduced cost of capital for Suzano as the 2028 transaction resulted in the lowest yield for a Brazilian corporation for the seven-year term.
“ESG practices have been an inherent part of Suzano's DNA and daily operations for many years. This latest transaction underlines Suzano’s commitment to making its capital structure as responsible and sustainable as possible. 39% of Suzano’s debt is now issued through Sustainability Linked Bonds or other green finance products compared to 9% two years ago.
“That said, Suzano recognizes that its ESG journey is far from complete and is committed to continuously reviewing and advancing its position and levels of transparency, which is driven by having clear goals”.
This new seven-year (2028) bond follows the completion of a US$1 billion Sustainability-Linked Bond; it makes use of similar targets as the ten-year transaction completed in June 2021 which received high investor demand at >4.5x the initial planned issuance of US$750 million. The bond was the first SLB of its kind in Latin America that includes a D&I target, with bondholders entitled to receive a higher amount of interest if Suzano fails to meet its targets.
Since 2020, Suzano has raised approximately US$2.75 billion in Sustainability Linked Bonds, making Suzano one of the leading corporations in this field. In September 2020, Suzano became only the second company globally to link its public commitments on ESG to the company's debt management by launching its first Sustainability-Linked Bond. This was the first by any Latin American company and in the pulp and paper sector. The bond is linked to the goal of reducing greenhouse gas emissions by 15% by 2030 and raised a total of US$1.25 billion in the international market (US$750 million in September 2020 and a further US$500 million in November 2020).
These capital raisings underline Suzano’s leading position as an agent of change in the combined development of innovative and sustainable solutions contributing to tackle society’s greatest challenges through its business. In addition, this transaction highlights Suzano’s commitment to making its capital structure as sustainable and green as possible. After this issuance, 39% of Suzano’s debt is issued through Sustainability Linked Bonds or other green finance products compared to 9% at the end of 2019.
The two Sustainability-Linked Bond goals are part of Suzano’s 14 long-term public goals, called the ‘Commitment to Renew Life’. These goals can be viewed at: https://centraldeindicadores.suzano.com.br/en/long-term-goals2/
Strong results drive continued reduction in company's leverage
Suzano, the world's leading eucalyptus pulp producer and a global benchmark in the manufacture of bioproducts developed from eucalyptus, reported operating cash generation of R$4.9 billion for the three months to 30 June 2021 (2Q21). This represents a 47% increase compared to the same period last year (2Q20) and the best quarterly result since Suzano’s inception following the merger between Suzano Papel e Celulose and Fibria in January 2019.
- The results have been driven by strong pulp sales and higher prices in the market. Suzano has the world’s largest inventory levels, however this is still below optimum operational levels, as current supply cannot meet current demand.
- The weakening of US$ against BRL at the end of the quarter was largely responsible for the net gain of R$10 billion, due to the positive impact of exchange variation on debt and derivatives contracted in US$.
- Suzano’s multi-billion-dollar project at Mato Grosso do Sul, will be one of the largest private sector investments under development in Brazil once the project commences following Board approval.
- These results follow Suzano’s milestone leaps in the ESG agenda including the announcement a biodiversity scheme to connect half a million hectares of native forests by 2030 and its issuing of a new US$1 billion Sustainability-Linked Bond (SLB) linked to environmental and social targets. Suzano has now raised over US$2.25 billion through SLBs since 2020 and 37% of the total debt is now issued through SLBs or other green finance products.
The results continue to be driven by strong pulp sales and higher prices in the market. Suzano ended the quarter with current pulp inventories below the optimum operational level. The paper segment was marked by solid commercial and operational performance, given prices increases and sales volume in the domestic market. Pulp sales during 2Q21 were 2.5 million tons, while paper sales totaled 296,000 tons, contributing to net revenue of R$9.8 billion in 2Q21.
Adjusted EBITDA, another important indicator of Suzano’s financial performance, totaled R$5.9 billion, an increase of 42% on the same period last year.
Suzano’s cash generation capacity, combined with prudent financial discipline, has helped reduce leverage in US$, as measured by net debt/adjusted EBITDA, to 3.3x as of 30 June 2021, compared to 3.8x at the end of 1Q21.
“Our results once again demonstrate Suzano's financial strength. Our performance in recent quarters has laid the groundwork necessary to build a landmark new pulp mill in Brazil”, says Walter Schalka, CEO of Suzano.
The multi-billion-dollar project at Mato Grosso do Sul, announced in May 2021, will be one of the largest private sector investments under development in Brazil once the project commences following Board approval.
Addressing the bottom line, the weakening of US$ against BRL at the end of the quarter was largely responsible for the net gain of R$10 billion. This is predominantly due to the positive impact of exchange variation on debt and derivatives contracted in US$.
The second quarter saw two milestones in Suzano’s Environmental, Social and Governance (ESG) agenda. Suzano announced a biodiversity scheme to connect half a million hectares of native forests by 2030 and increased the use of green finance within its capital structure in June by issuing a US$1 billion Sustainability-Linked Bond (SLB) linked to targets including the representation of women in leadership positions and the reduction of water use in industrial operations.
Suzano is the world's leading eucalyptus pulp producer and Latin America's largest paper and pulp producer. Guided by its purpose of renewing life through trees, Suzano is global player in developing sustainable and innovative solutions from renewable sources. Today the 97-year-old company plays a part in the lives of over 2 billion people via its 11 mills across Brazil and has the capacity to produce 10.9 million tons of market pulp and 1.4 million tons of paper a year, exporting to more than 100 countries. Suzano’s shares are traded on stock exchanges in Brazil and the United States.
All of Suzano’s ESG activity closely aligns with industry best practice and reporting models including the SDGs, SASB, Global Reporting Initiative (GRI), and the Task Force on Climate-related Financial Disclosures (TCFD) amongst others.
Suzano’s credentials as a sustainability leader are bolstered by key ESG indexes and ratings including the MSCI Index, Dow Jones Sustainability Index (DJSI), Brazil B3 Exchange’s Corporate Sustainability Index (ISE), and the Carbon Disclosure Project (CDP).
Metso will expand its global service network by opening a new service center to serve Suzano Papel e Celulose S.A.'s 1.5-million-tonne greenfield pulp mill in Maranhão, northeastern Brazil. The service center will supply roll grinding and other maintenance services, and will have a storage for selected spare parts and consumables. The center will be located in Imperatriz, close to the Maranhão mill, and will be operational in late 2013. The groundbreaking ceremony for the new service center was held in Imperatriz on April 25, 2013.
The groundbreaking ceremony of the new service center to be built in Imperatriz was held on April 25, 2013. Pictured are (left to right) Adriano Canela, Project Manager, Suzano Papel e Celulose, Sebastião Madeira, Mayor of City of Imperatriz, Elio Krummenauer, Director, Services, South America, Metso, Volnei Remor Hilbert, Industrial Manager of Suzano Maranhão mill, Celso Tacla, Area President, South America, Pulp, Paper and Power, Metso, and Jukka Tiitinen, President, Services business line, Pulp, Paper and Power, Metso.
"This investment is in line with Metso's strategy for services growth. Local support to customers and long-term partnerships bring value both to our customers and Metso," says Jukka Tiitinen, President, Services business line, Pulp, Paper and Power, Metso.
In addition, Metso and Suzano Papel e Celulose S.A. have agreed that Metso will establish mill maintenance for the entire Maranhão mill. With the agreement Metso will take responsibility for the establishment of the mill's maintenance management system and support Suzano in establishing materials management operations. The value of the agreement will not be disclosed.
"We have decided to contract Metso to bring equipment manufacturer's process knowledge and maintenance expertise in establishing maintenance for the Maranhão mill. We expect to have efficient maintenance plans and organization in order to contribute to a reliable start-up and quick learning curve, from the first days of operation," says José Alexandre, Industrial Director, Suzano Papel e Celulose.
All main technology for the Maranhão pulp mill is being supplied by Metso. Metso's scope of supply covers wood handling, cooking plant and fiberline, pulp drying and baling, evaporation, power boiler, recovery boiler, causticizing and lime kiln, and an integrated automation solution for all process areas. The mill is scheduled to start up in the second half of 2013.
Nalco, providing essential expertise for water, energy and air, has helped Suzano Pulp and Paper's industrial units in the cities of Suzano, Sao Paulo and Mucuri, Bahia in Brazil, significantly reduce water and chemical use in their papermaking process.
Suzano, the second largest global producer of eucalyptus pulp and regional leader in the paper market, developed a new set of KPIs (key performance indicators) for its papermaking operations and asked Nalco to find ways to improve its performance, reduce costs and optimize the use of natural resources.
The Nalco team identified the combination of a new retention, drainage and formation program with patented PARETO Mixing Technology to enhance the wet-end of the papermaking process, where high amounts of water and fiber are formed into the paper sheet before it is dried. By using the PARETO Optimizer solution, improved mixing was achieved, leading to the desired decrease in water and chemical usage.
"As a sustainability-oriented company, Suzano is always looking to increase its business competitiveness while at the same time implementing effective solutions that strengthen innovation," said Ernesto Pousada, Executive Director of Operations at Suzano Pulp and Paper.
With the implementation of these new technologies, total fresh water demand in both mills decreased more than 79 million gallons per year, leading to a significant improvement in the sustainability performance.
This success led Suzano Pulp and Paper to recognize its successful partnership with Nalco and present the company with the Suzano Providers Award, in the Innovation Category, in 2009.
Suzano Pulp and Paper is launching today the Forestry Partnership Program (Programa de Parceria Florestal – PPF) in the state of Piauí. The objective of the program is to enable rural landowners to participate in the pulp production chain through eucalyptus plantations by providing them with special financing lines. The Company thus hopes to create new opportunities for the region, strengthening its sustainable management model that takes into account the development of business and the communities where it operates.
One of the key goals is to develop forestry activities through incentives and initiatives to encourage the planting of eucalyptus trees on the property of local independent producers. The Program will primarily focus on the participation of small- and medium-size producers, making them responsible for part of the supply of Suzano’s industrial units, thus contributing with income generation and creation of direct and indirect jobs.
The Forestry Partnership Program is part of the investments in Suzano’s new growth cycle, which will allow the Company to achieve, within the next decade, an additional production capacity of 4.3 million tons of pulp per year, reaching a maximum production capacity of 7.2 million tons. To reach that capacity, the company has announced two new pulp mills in the states of Maranhão and Piauí, which should start-up in 2013 and 2014 respectively, and a third location yet to be defined, in addition to the project to increase production at the Mucuri Unit located in the south of the state of Bahia.
By including the rural landowners in its supply chain as wood suppliers, Suzano is stimulating forestry activities, enabling the most diverse types of alternative farming and assisting with the conservation of legal reserves and permanent preservation areas, contributing towards environmental balance and sustainable wood production.
Currently Suzano has partnered with more than 1000 landowners located in the states of São Paulo, Espírito Santo and Bahia. The objective of the Forestry Partnership Program is to make participants within the program account for approximately 30% of the total wood supply. Therefore, we estimate that 200 contracts will be signed annually, throughout Brazil, covering all types of producers.
By 2015, Suzano will invest approximately R$ 8 billion in the implementation of these new mills in Maranhão and Piauí and in the creation of its forestry base in these states (R$ 4 billion in each state), which will accelerate the growth and development in the regions within the scope of these developments.
So that these investments are made in a sustainable manner, Suzano has carried out active work with communities, through several communication channels to answer questions and receive suggestions, in addition to promoting meetings with organizations, community leaders and government representatives to discuss local development. Suzano has also had meetings with community associations to discuss specific programs and actions and, thus, consolidate the relationship with people that live in the community, as well as organizations in the municipalities.
Suzano and partners are not the only ones involved in the Program; financing institutions such as Banco do Brasil and Banco do Nordeste are also participating. The process to include farmers in Suzano’s Forestry Partnership Program is initiated whenever any candidate shows interest in developing forestry activities, with a major social, economic and environmental benefit, along with their traditional agricultural activities. Suzano will then send one of its technicians to the farmer’s property for the first technical visit, who will verify the potential and suitability of the area for forestry production.
The Suzano Forestry Partnership Program is divided into two categories —Renda Verde and Invest Verde (Green Income and Green Invest)—according to the social, environmental and land profile of the participants and the region of the country. The Program establishes the maximum area of property that can be allocated for eucalyptus plantations for each category and also the percentage of wood that Suzano agrees to purchase .
Renda Verde (Green Income)
This type of program in Piauí is intended for producers and landowners whose plot is up to 680 ha; maximum; 340 ha can be planted during the contract period.
Suzano guarantees to purchase at least 95% of the wood produced by Green Income partners. Suzano will assist farmers by providing forestry, agricultural and environmental incentive packages, support during the certification process and seedlings for planting and replanting.
Invest Verde (Invest Green)
This type will serve farmers and rural landowners as well as investors in Piauí, with 340 to 2,800 ha of land; up to 50% of the property may be allocated to forestry activities.
In this category, Suzano guarantees it will purchase at least 50% of the wood produced through a specific contract, as well as provide assistance, forestry incentive packages and seedling supply for planting and replanting.
|Planted Area (ha)
|Number of Partners
|at least 20
|at least 400
About Suzano Pulp and Paper
As a forestry base company and one of the leading vertically integrated producers of eucalyptus pulp and paper in Latin America, Suzano Pulp and Paper is part of the Suzano Group. The Group has been investing in the pulp and paper sector for the past 86 years, with global presence in approximately 80 countries. The company has adopted a management model that takes into account the three main dimensions of sustainability: business, society and environment. Suzano currently has five mills: Suzano, Rio Verde and Embu, in the interior of the state of São Paulo, Mucuri in the state of Bahia and 50% stake in Conpacel in São Paulo, also located in the state of São Paulo.
For further information
GWA Comunicação Integrada
Suzano Papel e Celulose Ltda, Brazil, has awarded Pöyry a contract for pre-engineering and preparatory work for mill infrastructure for a 1.3 million t/a bleached eucalyptus market pulp mill to be built in the state of Maranhao, Brazil. The value of Pöyry's assignment is about EUR 7.3 million. The client is expected to make the final investment decision in spring next year.
The concept of the mill is based on the use of the best available technologies and the best environmental practices, which constitute a state-of-the-art level pulp mill. Using existing eucalyptus plantations as raw material, the mill is to produce more with less use of natural resources, at low production costs, progressive environmental impact reduction and minimum risk of accidents at work.
The assignment now received strengthens Pöyry's position as the leading engineering solutions provider for the pulp and paper sector in the world.
Additional information by:
Martin Kuzaj, President, Industry Business Group, Finland
Tel. +358 10 33 21179
Sanna Päiväniemi, Director, Investor Relations, Pöyry PLC, Finland
Tel. +358 10 33 23002
Pöyry is a global consulting and engineering company dedicated to balanced sustainability. We offer our clients integrated management consulting, total solutions for complex projects and efficient, best-in-class design and supervision. Our in-depth expertise extends to the fields of energy, industry, urban & mobility and water & environment. Pöyry has 7000 experts operating in about 50 countries, locally and globally. Pöyry's net sales in 2009 were EUR 674 million and the company's shares are quoted on NASDAQ OMX Helsinki (Pöyry PLC: POY1V).
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