Suzano Case Study

1534 Words7 Pages
Suzano is the largest Brazilian paper company and the world’s fourth-largest market pulp producer. The company operates three integrated pulp and paper facilities, including Mucuri in the State of Bahia, Limeira and Suzano in the State of São Paulo, one market pulp facility, Imperatriz, in the State of Maranhão and one paper facility, Rio Verde, in the State of São Paulo. The company has 1.3mn tons of paper capacity, including 1.05mn tons of coated and uncoated printing and writing capacity and 200k tons of paperboard capacity. Additionally, the company has 2.3mn tons of market pulp capacity. Suzano’s land assets are larger than countries such as Qatar and Lebanon and totalled 1.2mn hectares of which 580k hectares are planted eucalyptus.…show more content…
For example, certain paper manufacturers, such as SUZANO and KLABIN, have historically produced and consumed their own pulp in their integrated paper manufacturing facilities. Pulp produced for sale to third parties is called market pulp. For example, FIBRBZ and ECELUP are pure-pulp manufacturers, whose end-product is sold to paper and packaging companies (ie, they are market pulp manufacturers). Historically, many of the integrated participants have consumed a majority of their own pulp in an integrated process. However, recent increases in pulp prices have incentivized a number of operators to expand their pulp manufacturing capacity, ultimately making a portion of their total production “market pulp.” For example, in FY14, SUZANO began operations at its Imperatriz facility, which brought on 1.5mn tons of market pulp capacity, while in FY16, KLAB commenced operations at its Puma facility, which brought on 1.5mn tons of market pulp capacity (400k tons of which are softwood pulp). Similarly, FIBRBZ is expanding its Três Lagoas mill (called Horizonte II), which will increase capacity at the facility by 1.95mn tons, while Eldorado is analyzing expanding its Três Lagoas mill (called Vanguarda 2.0), which could potentially expand capacity by 2.3-2.5mn tons. Of the 139mn tons of chemical pulp manufactured, integrated mills represent 59% of consumption (82mn tons), while market pulp…show more content…
Softwood pulp includes wood species with long cellulose fibers, including pine, spruce or fir, and is mostly grown in temperate areas. These longer fiber pulps are best suited for products requiring strength and durability, including packaging products and certain printing papers. Hardwood pulp includes wood species of short cellulose fibers, such as eucalyptus, aspen, acacia or birch, and is mostly grown in tropical areas. These shorter fiber pulps are best used for paper products with high smoothness, opacity, and uniformity, such as tissue paper. Softwood pulp represents 46% of market pulp demand (24mn tons), while hardwood pulp represents 54% of market pulp demand (31mn tons). Eucalyptus trees (the main raw material for Brazilian manufacturers) have a favorable growth cycle compared with species from which softwood is derived. Eucalyptus trees are among the fastest in the world, with the average growth cycle six to seven years. This compares with over 10 years in other countries in the Americas, and over 20 years for species in certain countries in the Northern hemisphere. Having a faster growing forestry asset provides an important competitive advantage for Brazilian pulp manufacturers, given the importance of wood costs in the production process (~50% of cash costs are related to

More about Suzano Case Study

Open Document