RISI International Containerboard Conference Flvio Deganutti - - PowerPoint PPT Presentation

RISI International Containerboard Conference

Flávio Deganutti

November, 2018

• Degree in Chemical Engineering,

a MSc in Paper Production, and a MBA in Business Administration

• 20 years of experience in the

Pulp and Paper sector

• Joined Klabin in 2000, mostly

dedicated to kraftliner, coated boards and Liquid Packaging

Flávio Deganutti

Commercial Director of Papers

KLABI N

A little bit about

1 7 0 k tpy

* Installed capacity

TOTAL LAND 4 9 0 k hectares

140k

hectares

90k

hectares

PI NUS EUCALYPTUS

MARKET PULP FI BERS 3 .5 m illion tpy

1.1mi tpy

short fiber

0.4mi tpy

long fiber & fluff pulp

CONTAI NERBOARDS 1 .2 5 m i tpy

CONVERSI ON 9 2 0 thousand tpy

CORRUGATED BOXES I NDUSTRI AL BAGS 7 5 0 k tpy

PLANTED FORESTS 2 3 0 k hectares

I NTEGRATED FI BERS 1 .8 m i tpy

RECYCLED FI BERS

2 6 5 THOUSAND tpy

PAPER 2 .0 m illion tpy

COATED BOARDS 7 5 0 k tpy

integrated business model

DI VERSI FI CATI ON AND FLEXI BI LI TY

SUST AINABIL IT Y AT KL ABIN

+200 000 he c tar e s 723 spe c ie s 88 spe c ie s

• f pre se rve d fo re sts

re quire d by Brazilian le gislatio n)

• f e ndange re d animals in

the ir fo re sts

• f e ndange re d plants in

the ir fo re sts

Mo re than 98% o f the mate rials use d by K labin in its pro duc tio n are fro m re ne wable o rigin Curre ntly, 86% o f the e ne rg y matrix is made up o f re ne wable so urc e s

Mo saic Plantatio n

NE W KL ABIN T E CHNOL OGY CE NT E R

5 re se arc h ro ute s o f the T e c hno lo g y Ce nte r

Quality Pulp Pape r Bar r ie r s

Brazilian Macroeconomics

GDP 2015: ‐3.6% 2016: ‐3.5% 2017: 1.0% UNEMPLOYMENT RATE 2015: 8.5% 2016: 11.3% 2017: 12.8%

After 3 years of storm

Source: IMF

What is going to happen?

Main measures

• Privatization
• Social programs
• Social security reform
• Fiscal control
• Inflation control

Image source: Sérgio Lima/Poder360 ‐ 8.mai.2018

New President

We believe in a better weather

GDP 2018: 1.4% 2019: 2.4% 2020: 2.3% UNEMPLOYMENT RATE 2018: 11.8% 2019: 10.7% 2020: 10.2%

Source: IMF

3.25 3.31 3.90 3.83 2016 2017 2018 2019 Exchange Rate

Source: BCB

Uncertain exchange rate

R$/US$

What is new?

CNC

MFC

EUCA PINUS PINUS PINUS EUCA

Lignin

Characterization of the various lignins Green Carbon Fiber Lignin based barriers

200 335 373 429 482 100 200 300 400 459 523 1950 1960 1970 1980 1990 2000 2010 2020 2030 Paper Plastic

Evolution production

1973 oil crisis 2008 recession

Million tonnes

Plastic Wood Fiber

? ?

Source: Klabin

Source: Ibá e and Klabin

5 4 4 4 2 5 2 0 1 2 1 0 6 4 3 8 2 2 2 2 1 0 7 4 4

EUCALYPTUS

24 31 35 39 42 42 44 46 47

<69 70-89 90-04 05 06-09 10-11 12-15 16-20 21-25

m³/ha/year

26 35 41 50 52 58 61 65

<73 74-85 85-95 95-05 05-11 12-15 16-20 21-25

PI NE

Forest Productivity

m³/ha/year

Mean annual increment (MAI)

m³/ha/year

Forest Productivity

m³/ha/year

Mean annual increment (MAI)

PR/ BR

Brazilian Containerboard

Corrugated packaging per capita in the World

Me xic o 28 Chile 37

Arg e ntina 42

F ranc e 81 I taly 108 Spain 107

U SA 108

24 mm tpy

I ndia 7

5.8 mm tpy

Japan 110

9.2 mm tpy

China 51

46.6 mm tpy

Brazil 30

3.6 mm tpy

Ge rmany 122

15.5 mm tonne / ye ar

[m²]

Brazilian Corrugated Packaging Market Share

2016

16.8% 8.0% 6.5% 5.6% 42.4%

Player 1 Player 2* Player 3 Player 4 Other = 63

0.7%

e xpor ts

NOR T H 2.4% NOR T HE AST 10% SOUT HE AST 47.7% MIDWE ST 9.2% SOUT H 30%

Division by region

2.2% ‐0.1%

2017

3 502

2014

3 506

2018e

3 580

ABPO

Corrugated packaging shipments in Brazil

k tonne

533 530 528 523 521 520 516 513 509 506 502 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Source: ICCA

Corrugated packaging basis weight

g/m² ‐0.6%

70% 30%

(2017 – %)

Paper consumption in corrugated board

Source: ABPO

Vir gin Re c yc le d

Horticulture & Fruits are big potential for corrugated board

• Brazil is the 3rd largest fruit

producer, but exports 3% of the total production

• Only 10% of the domestic market

use corrugated board

Fruit exports

824 824 783 783 835 835 2017 2017 2015 2015 2016 2016

USA Netherlands 34 UK Spain 99 Portugal 141 323 45

(k tonne) 5 largest destinations

Proteins: Brazil is the first exporter and the second producer of meat and poultry.

4 304 4 384 4 320 1 362 1 351 1 486

2015 2016 2017

6 221 6 467 6 503 732 697 555 215.2 millio ns 1.3 billio ns

flo c k Protein exports

(k tonne)

Me at Pig s Po ultry

In 2017 proteins accounted for 22.5%

• f the ABPO shipments

Source: ABPA and MDIC

The Market is demanding better quality and Coated WTL

Image source: Tondo Embalagens

E‐commerce represents 4.3% of the Brazilian total retail, but growths 3 times faster.

Source: eBIT

CONTAINERBOARD BRAZIL

k tonne

5 443

2017 2021

4 592

4 855 4 325

4.3%

Pro duc tio n Appare nt Co nsumptio n

Source: Risi Latin America Pulp & Paper Forecast

T

• tal Capac ity 2017 Brazil

4.9 million tonnes

Source: Risi Capacity Report 2017 and Risi Latin American Pulp & Paper Forecast ‐ 5‐Year

CONT AINE R BOAR D CAPACIT Y

41% 40%

Kr aftline r T e stline r Se mic he minal R e c yc le d Me dium 1%

18%

T

• p 5 pr
• duc e r

s

Kr aftline r + Se mic he mic al T e stline r + Re c yc le d me dium

819

Player 4

87

Player 2

435

Player 5 Player 3

70

Player 1

183

(k to nne s)

162 180

Player 3 Player 1

276

Player 2

275

Player 4

161

Player 5

T

• tal 55 playe r

s

267 588

2017 2021

22%

Pro duc tio n

Kraftliner export

k tonne

Source: Risi Latin America Pulp & Paper Forecast

Kraftliner

From the South Hemisphere

• > % Eucalyptus
• Light weight
• High compression
• Low cash cost
• Better printing quality

What it comes to…

• Better economic perspectives
• Paper consumption increasing over plastic worldwide. Brazil well

positioned to grow and export paper

• Too fragmented corrugated market so far
• High potential to expand domestic corrugated box market
• Increasing HW content on containerboard
• New bio‐based materials supporting light weights and barriers