2 INDUSTRY NEWS


Shared value produces strong results for Fibria in Brazil


environment and communities in Brazil during London Pulp Week in November by revealing research that shows it is part of a trend in global companies that are recognising the connection between financial success and society’s success. The research by FSG shows


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that this correlation, called ‘shared value’, comes as Fibria has successfully completed the start-up of its new pulp mill at Três Lagoas, Mato Grosso do Sul, and reported a large increase in pulp production and strong third- quarter results. Value-sharing at Fibria has


two key initiatives. One is the Rural Land Development Program, (PDRT) which supports local farmer associations and encourages local development. In the past, wood theft is said to have cost Fibria around R$50 million because communities had few other economic alternatives. Seven years later wood theft has fallen by 90 per cent and PDRT is supporting 50 communities


ibria, the world’s largest producer of softwood pulp, showcased its commitment to the


adjacent to Fibria’s three mills. The other value-sharing


initiative is Forest Savings, which helps farmers grow eucalyptus on their land as part of a crop diversification programme. Farmers are said to be now supplying 20 per cent of Fibria’s eucalyptus with 2,000 families benefitting. Last year Fibria says it saved more than R$100 million (US$31m) by interacting with farmers in its supply chain. Marcelo Castelli, chief executive of Fibria, commented: “We saw an opportunity to restructure the company’s relationship with the community. We talked, compromised and developed a solution together. We’re very proud of what we’ve achieved with our shared-value initiatives. “We were able to improve the


lives of hundreds of families and also the environment, while also becoming a more profitable company. And I’m certain that this is just the beginning. There’s still much to be done.” Fibria’s finances have also been turned round in the last 12 months. Softwood pulp production volume increased by 11 per cent in the third quarter,


Marcelo Castelli, chief executive of world-leading pulp producer Fibria


year-on-year, to 1.45 million tons, of which 124,000 tons was added by the new pulp mill at Três Lagoas, which started production on 23 August, three weeks ahead of schedule. Sales grew by 24 per cent in the quarter to R$2.84 billion (US$878m), while cost savings increased margins which produced a net profit of R$743m (US$230m), and reversing the loss of R$259m in the second quarter. Fibria says that, with such good fundamentals, it is increasing prices. Talking to Pulp Paper & Logistics,


Smurfit Kappa recognised by German research institute


Smurfit Kappa has been recognised for its Performance Packaging technology from a leading European research institution. The pioneering technology, which Smurfit Kappa invented in 2001, has been endorsed by the


November/December 2017


Papiertechnische Stiftung (PTS) research and service institute in Germany in setting a new industry standard. PTS assists companies with the


development and use of fibre- based materials. The PTS validation


means that Smurfit Kappa’s test protocols are now published as an official Deutsches Institut für Normung (DIN) norm leading to a more scalable and credible approach for corrugated packaging users.


Castelli explained the background to the second Três Lagoas pulp production line, which represents a total investment of R$2.2bn (US$680m) and increases Fibria’s annual pulp capacity at the mill by 1.95m tons to 3.25m tons, making it one of the largest in the world. With its other mills at Aracruz in Espírito Santo state, Jacareí in São Paulo state, and Eunápolis in Bahia state, Fibria has total capacity of 7.25m tons. Increasing capacity makes sense, said Castelli, because “softwood pulp demand is not a problem with two to three per cent growth a year”. Global demand for paper is 410m tons a year, of which 240m is recycled and 160 to 170m is virgin fibre. “Integrated companies produce 100m tons a year, leaving demand for around 60m tons of virgin pulp. The one to two per cent growth justifies the added capacity at Três Lagoas mill.” Castelli said he was pleased with the progress of the project. “It’s the biggest single pulp line in the world and after the environmental licencing was completed, from the first purchase order it took 44 months to production.”


Arco Berkenbosch, innovation


& development chief at Smurfit Kappa, said: “We are very proud that with the support of PTS, we have set the new standard in the industry. In the last 16 years we have seen that more and more companies inside and outside our industry have started using our innovative performance packaging approach to optimise and harmonise their materials.”


Pulp Paper & Logistics


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