3rd fibria investor tour presentation - jacare? unit

8/11/2019 3rd Fibria Investor Tour Presentation - Jacare? Unit

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FIBRIA APP IS AVAILABLE FOR DOWNLOAD AT APPLE STORE AND GOOGLE PLAY

WELCOME TO THE 3RD FIBRIA INVESTOR TOUR


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DISCLAIMER

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The information contained in this presentation may include statements which constitute

forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933,as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended.

Such forward-looking statements involve a certain degree of risk and uncertainty with respectto business, financial, trend, strategy and other forecasts, and are based on assumptions, dataor methods that, although considered reasonable by the company at the time, may turn out tobe incorrect or imprecise, or may not be possible to realize.

The company gives no assurance that expectations disclosed in this presentation will beconfirmed.

Prospective investors are cautioned that any such forward-looking statements are notguarantees of future performance and involve risks and uncertainties, and that actual resultsmay differ materially from those in the forward-looking statements, due to a variety of factors,including, but not limited to, the risks of international business and other risks referred to in thecompanys filings with the CVM and SEC.

The company does not undertake, and specifically disclaims any obligation to update anyforward-looking statements, which speak only for the date on which they are made.


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Fibrias Team

4

Marcelo Castelli, CEO

Aires Galhardo, ForestryGuilherme Cavalcanti, CFO & IRO

Henri Philippe, Comercial & International Logistics

Paulo Silveira, Industrial & Engineering

Executive Officers

Paulo Gaia, General Manager

Industrial Operations

Caio Zanardo, General ManagerForestry Operations

Andr Gonalves - General ManagerCamila NogueiraRoberto Costa

Raimundo Guimares

Investor Relations

Geraldo Magella - ManagerPatricia BahryNanci Contarini

Corporate Communication

Technology Center

Fernando Bertolucci, General ManagerCesar Bonine, ManagerGabriel Dehon, ManagerPaulo Pavan, ManagerRobert Sartorio, Manager

Accounting

Arvelino Cassaro, Manager

Treasury

Marcelo Habibe, General ManagerDavid Alegre, Manager

Governance, Risks and Compliance

Everson Bassinelo, General Manager

M&A

Vinicius Nonino, Officer

Supply Chain

Wellington Giacomin, Officer


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AGENDA

5

08:30 a.m.Registration

09:00 a.m.Financial Strategy |Guilherme Cavalcanti

09:45 a.m.Operational Risk Management Industrial - Fibria Case|FM Global

10:30 a.m.Forestry Capex | Aires Galhardo

11:15 a.m.Climate Change | Fernando Bertolucci

12:00 p.m.Q&A

01:40 p.m.Lunch

02:50 p.m.Departure for the Igarat watershed (1:40h)

04:30 p.m.Arrival and visit to the Igarat watershed

06:00 p.m.Departure for So Paulo


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Financial StrategyGuilherme Cavalcanti - CFO

6


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THE MATURITY OF SYNERGIES CAPTURED SINCE FIBRIASCREATION IMPROVED ITS OPERATING INDICATORS

7

PRODUCTION VOLUME (000 t)BEST PRACTICES AND OPERATING STABILITY

CASH COST (R$/ton)

SG&A (R$ million)STRUCTURE AND PROCESS SIMPLIFICATION

EBITDA (R$ million) - EBITDA MARGIN (%)

4,600

5,0545,184

5,299 5,271 5,253

2009* 2010* 2011 2012 2013 2Q14 LTM

432 448 471 473505 519

656 624 596549 545

2009* 2010* 2011 2012 2013 2Q14 LTM

Historical Value Inflation Effect**

593 594 605 584648 645

900826 766 678 699

2009* 2010* 2011 2012 2013 2Q14 LTM

Historical Value Inflation Effect**

1,522

2,526

1,9642,253

2,796 2,857

2009* 2010* 2011 2012 2013 2Q14 LTM

29%

40%34% 36%

40% 40%

* Excludes Conpacel | ** Inflation effect calculated by the IPCA (Consumer Price Index)

+14% -21%

-28%


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NO EXPOSURE TO THE RISK OF ELECTRICITY SHORTAGES,IN SPITE OF WHICH THE COMPANY HAVE BENEFITEDFROM THE SALE OF SURPLUS ENERGY

8

Utilities results boosted by energy sales(2Q14: R$ 36/t I 1Q14: R$ 18/t I 2Q13: R$ 14/t)

546

559

14

13

54

(27) 4

2Q13 Maintenancedowntimes

Wood FX Maintenance Utilities Others 2Q14

LTM inflation(IPCA): 6.5%

LTM averageFX: 7.9%

+ 2.2%


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STRONG FLEXIBILITY AND STRUCTURAL ENERGYGENERATION SURPLUS OF 60 MW

9RB: Recovery Boiler (Total: 7) | PB: Power Boiler (Total: 6) | TG: Turbo Generator (Total: 13)

Aracruz

RB

RB

RB

PB

PB

TG

TG

TG

TG

TG

TG


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CAPITAL STRUCTUREFIBRIA HAS THE LOWEST LEVERAGE RATIO AMONG ITS LATINAMERICAN PEERS

10

Net Debt/EBITDA (x)(1)

Fibria Arauco CMPC Klabin Suzano

S&P BB+/Positive BBB-/Stable BBB-/Stable BBB-/Stable BB/Negative

Moodys Ba1/Positive Baa3/Negative Baa3/Negative - Ba2/Stable

Fitch BBB-/Stable BBB/Stable BBB+/Stable BBB-/Stable BB-/Positive

(1) Fibrias historical data in BRL. | (2) Market consensus.

2.4 2.3 2.4

4.84.5

4.0

1.7 1.7

2.6

2.9 3.1

3.83.6 3.7

3.2

14.813.2

11.7

4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 2014

Fibria Suzano Klabin CMPC Arauco Eldorado

2


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CONTINUATION OF THE LIABILITY MANAGEMENT PLAN,ALSO FOCUSING ON IMPROVING MATURITIES

11

December 2013

June 2014

Cost of debt: 3.8%

Average maturity: 52 months

Land Deal

Bond buyback: Fibria 2020,2021 and VOTO IV

Fibria 2024 issuance

Bank loans renegotiations

Lower cost of debt

Smoother debt amortizationschedule

NPV of all initiatives:US$270 million

1,064

384 530750 554 634

2,020

1,341

-

410

450 299

506422 128

149

1001,473

834 829

1,255

976 762

2,168

1,441

264

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Cost of debt: 4.6%

Average maturity: 52 months

Local CurrencyForeign Currency

Local CurrencyForeign Currency

855

314 451831 778 790

371 31811

1,302

213

459 318

524437

133

174 135

37 6

1,068

773 769

1,3551,215

923

545453

48 6

1,302

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024


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BUT THE INITIATIVES HAVE NOT FINISHED, THERE ARECERTAIN ONGOING NEGOTIATIONS THAT WILL IMPROVEFIBRIAS DEBT PROFILE EVEN FURTHER

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Revolver

Liquidity 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Others ACC/ACE ECN BNDES Bond Pre-payment

Cash

R$1 billion

Average Term

From: 52 months | to: 54 months

Average Cost

From: 3.8% | to: 3.7%


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A CONSISTENT AND DISCIPLINED APPROACH FOCUSEDON REDUCING DEBT AND ITS COST

13

Gross Debt (R$ million) x Leverage Interest (R$ million) x Leverage

14,985

8,4578,606

3,840

6.3

3.6

4.8

3.42.8 2.3

Debt (R$) Debt (US$) Leverage (x)

946

528473

230

6.3 5.95.5

5.24.6

3.8

Interest (R$) Interest (US$) Cost of Debt (%)

Free Cash FlowIncrease

Reduction ininterest

Reduction inCost of Debt

This creates avirtuous cycle

2009 2010 2011 2012 2013 Jun/14 2009 2010 2011 2012 2013 2Q14LTM


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NEW ISSUANCE BETTER PRICED THANINVESTMENT GRADE ISSUERS

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As of Sep 01, 2014

Rating Maturity Volume T-Spread Coupon

Fibria Ba1 / BBB- / BB+ 2024 US$ 600 MM 275 bps 5.25%

Braskem Baa3/BBB-/BBB- 2024 US$ 500 MM 340 bps 6.45%

Petrobras Baa1/BBB/BBB 2024 US$ 2.5 bi 350 bps 6.28%

BNDES Baa2/BBB-/ 2024 US$ 500 MM 362 bps 6.32%

Klabin BBB-/BBB- 2024 US$ 500 MM 269 bps 5.25%

Odebrecht Baa3/BBB/BBB 2029 US$ 500 MM 263 bps 5.25%

Secondary Market

Rating Maturity Volume T-Spread Yield

Fibria Ba1 / BBB- / BB+ 2024 US$ 600 MM 277 bps 5.158%

Braskem Baa3/BBB-/BBB- 2024 US$ 500 MM 300 bps 5.353%

Klabin BBB-/BBB- 2024 US$ 500 MM 287 bps 5.289%

Odebrecht Baa3/BBB-/BBB 2029 US$ 500 MM 251 bps 5.103%

Petrobras Baa1/BBB/BBB 2024 US$ 2.5 bi 254 bps 4.908%

Gerdau Baa3/BBB-/BBB- 2023 US$ 750 MM 260 bps 4.873%


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GROSS CAPACITY ADDITION SHOULD NOT BE REGARDEDAS THE ONLY FACTOR INFLUENCING PULP PRICEVOLATILITY(1)

15

List Price bottoming at US$650/t in 2011 and US$726/t in 2014

B

HKPprices-c

ifEurope(

US$/ton

)

Green

fie

ldcapac

ity(

000ton

)

(1) Source: Hawkins Wright , Poyry and Fibria Analysis. Pulp price estimates according to Hawkins Wright (Jul/2014) and Brian McClay (Jul/14)(2) Partially integrated production

0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

1,6

1,8

2,0

0

100

200

300

400

500

600

700

800

900

1.000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Valdivia

APPHainan

VeracelNueva Aldea

Santa F

Mucuri

Fray

Bentos

Kerinci

PL3

Trs

Lagoas

Rizhao

APP Guangxi

Chenming

Zhanjiang

EldoradoMontes

del Plata

Maranho

Guaba II

APP South

Sumatra(2)

Klabin


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CAPACITY CLOSURES DO HAPPEN

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Closures of Hardwood Capacity Worldwide (000 ton)

-910

-85

-1,260

-1,180

-540 -500

-105

-1,085-1,030

2006 2007 2008 2009 2010 2011 2012 2013 2014-2016 Eas of

Aug14

Source: PPPC and Fibria


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LOWEST VOLATILITY AMONG COMMODITIES

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Commodities Historical Volatility (US$)(1)

38%

32%30%

26% 25%

21%

26%

7%

Sugar Iron Ore WTI CrudeOil

Soy LME Metals Ibovespa Cattle FOEX PIXBHKP

(1) Since 2009


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562

844810

751791

752

FX AND PULP PRICE EXPLAIN 80% OF FIBRIASEBITDA MARGIN

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1,522

2,526

1,964

2,253

2,796 2,857

2009 (1) 2010 (1) 2011 (1) 2012 2013 2Q14 LTM

29%

40%34% 36%

40% 40%

EBITDA(R$ million)

EBITDAMargin

Average PriceFOEX (US$/t)

2.001.76 1.67

1.952.16

2.30

Exchange RateAverage (R$/US$)

Each 10% depreciation of the Real increases EBITDA by 24%


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FIBRIA DELIVERS ONE OF THE INDUSTRYSHIGHEST EBITDA/T AND FCF/T

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Free cash flow - 2Q14 LTM (R$ Million)

2,857

1,125(1,409)

(386)

111

(20) (28)

Adjusted EBITDA Capex Interest(paid/received) Working Capital Taxes Others Free Cash Flow

Free Cash Flow per ton - 2Q14 LTM (R$/ton)

544

214(268) (74)

21

(4) (5)

Adjusted EBITDA Capex Interest(paid/received)

Working Capital Taxes Others Free Cash Flow


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AMONG THE INDUSTRYS LOWEST CASH COSTPRODUCERS

20Source: Hawkins Wright (Outlook for Market Pulp, July 2014) | Fibrias 2Q14 considering a FX of R$/US$2.23.Gray bar includes cash expenses as Interest, CAPEX, SG&A and Taxes (Source: RISI and Fibria).

531 493 490 457408 444 420 442 424

340 322 344 315258 251

4870 43

69 122 35 86 40 43

42 55 49 68113

70

50

141

20

Cash Cost (US$/t) Delivery (US$/t)

628 614 6032Q14 net priceUS$ 559/t

Positive WorkingCapital: US$44/t

SG&A

Capex

Interest

Interest

Capacity(k tons):

660 595 1,775 585 565 355 1,005 2,410 1,960 1,095 7,450 = 31,930330 3,680 4,165 5,300

Total Cash Cost of BHKP delivered to Europe (US$/t)


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EXCHANGE RATE DRIVERS

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International Market

Recovery of the US economy.

Carry-trade: Selic (11% p.a.) versus Fed Funds (0.25% p.a.)+ Brazilian Central Bank Swaps.

Domestic Market

Balance of payments: current account deficit financedby capital account.

Deterioration of the public accounts: reduction in theprimary surplus.

Crisis in Argentina: reduction in Brazilian exports.

Decline in industrial production


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BRL DEPRECIATION IS A MARKET CONSENSUS THAT CANBE CONFIRMED THROUGH THE BROADER SPREADBETWEEN FX CALL/PUT OPTIONS

22

Put x Call x Spot

1,50

2,00

2,50

3,00

3,50

4,00

Jan/12 Oct/12 Dec/12 Feb/13 Apr/13 Jun/13 Aug/13 Oct/13 Dec/13 Apr/14 Jun/14 Aug/14

Put option Call Option BRL spot

NDF notional reduction and increase in zero cost collar operations followed by a BRL depreciation


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REAL EXCHANGE RATE HAS NOT REFLECTED DOMESTIC/FOREIGN INFLATION DIFFERENTIAL OVER TIME(Base 100 = Jan 2002)

23

217

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abr/

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jul/14

IPCA BRL/USD


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FIBRIA HAS THE SIMPLEST AND MOSTTRANSPARENT CALL IN THE INDUSTRY

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Negative Neutral Positive

Pulp supply

Closures/conversions

Inefficient capacities in China

Demand

Mature markets

China

Pulp price

Brazil GDP

Energy crisis

FX

Capex inflation

Cost inflation

Rating

Corporate Governance


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ROE and ROIC

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RETURNS MAY CONCEALMISLEADING INFORMATION, SOMEOF WHICH WE WILL TRY TO ADDRESS

When dealing with return metrics like ROEand ROIC, it is advisable to be aware of thefollowing:

26

Brazilian and US peers are not comparable:

- USGAAP does not call for revaluation of biological assets;

Within the commodity sector, there are differences relatedto the accounting treatment of certain information underIFRS (e.g. biological assets in the mining sector vs forestryproducts);

- IAS 41 states that biological assets should be measured atthe fair value;

Business combination (IFRS 3) had an additional impacton companies that have undertaken M&A transactionssince 2009Fibria's Case.

- IFRS 3 considers the fair value of the assets acquired.


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WHEN LOOKING AT BLOOMBERG, ROE DUPONTANALYSIS SAYS THAT....

Net Margin

48.9%

9.6%

-14.8%-11.3% -10.1%

7.3%

2009 2010 2011 2012 20132014LTM

Net Margin = Net profit / Net revenues

Asset Turnover

23.2%

20.1% 20.1%

22.0%

25.2%

27.0%

2009 2010 2011 2012 20132014LTM

Asset Turnover = Net revenues / Average Assets

Total Leverage

2.14

2.05

1.941.89

1.851.78

2009 2010 2011 2012 20132014LTM

Total Leverage = Average Assets/ AverageEquity

ROE

24.4%

4.0%

-5.8% -4.7% -4.7%

3.5%

2009 2010 2011 2012 2013

2014LTM

ROE = Net Profit / Average Equity

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WHY SHOULD YOU NOT USE NETPROFIT OR OPERATION PROFIT AS APROXY FOR FIBRIAS ROE AND ROIC?

There were others, but the mainaccounting/non-cash items that led Fibria topresent net loss in recent years are:

28

FX translation of dollar denominated debt at BRLfinancial statements

Depreciation, depletion and amortization


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IMPACT OF THE FX VARIATION ON NET INCOME(ACCOUNTING ONLY) HAS DRIVEN THE NET LOSS IN THE LASTFEW YEARSSince the Company is not subject to any material refinancing risk, the exchange ratevariation on dollar denominated debt has an even minor relevance

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R$ million 2010 2011 2012 2013 2014LTM1

Operating Profit 1,589 730 937 1,535 1,584

Net Financial Result (364) (1,869) (1,696) (2,054) (1,064)

Foreign Exchange Variation - Debt 331 (1,036) (804) (910) 5

Bond Repurchases/Other (261) (176) (247) (429) (579)

Interest (732) (660) (683) (576) (528)

Net Income (Loss) 529 (868) (698) (698) 522

2010 2011 2012 2013 Jun/14

Year End Exchange Rate 1.67 1.88 2.04 2.34 2.20

1 - As of June 30, 2014


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CAPEX (INDUSTRIAL AND FORESTRY) VS. DEPRECIATION,DEPLETION AND AMORTIZATION

30

1,416

1,078

1,2871,409

1,884 1,848 1,862 1,863

2011 2012 2013 2Q14LTM

CAPEX Depreciation, Depletion and Amortization

(R$ MILLION)


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CAPEX (INDUSTRIAL AND FORESTRY) VS. DEPRECIATION,DEPLETION AND AMORTIZATION(R$ MILLION)

31

1.416

1.078

1,2871.409

1.884 1.848 1,862 1.863

2011 2012 2013 UDM 2Q14

CAPEX Depreciation, Depletion and Amortization

Industrial: R$330 million

Forestry: R$957 million

In the following slides we will show the main factors behind the reconciliation of thecapex and depreciation, depletion and amortization in the 2013 income statement


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FORESTRY CAPEX VS. DEPLETIONR$ million (2013)

32

957631

580

(65)

165

102(20)

329

97

66893975

Forestry Capex2013(1)

Expansion(2) Sustaining ForestryCapex 2013

Fair value - IAS 41(Biological Asset)(3)

Other Total Depletion2013(3)

Forestrymanagement

Forestrypurchase

ForestryPartnership

HistoricalDepletion

IAS 41 andIFRS 3Depletion

ForestryPartnershipDepletion

1. Includes Forestry Partnership - According to notes 18 and 22 (Additions2013 Financial Statements)

2. According to 4Q13 Earnings Release Capital Expenditures

3. According to note 18 and 22 (2013 Financial Statements)


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INDUSTRIAL CAPEX VS. DEPRECIATION/AMORTIZATIONR$ million (2013)

33

1. According to note 19 (2013 Financial Statements)

2. According to 4Q13 Earnings Release (Capital Expenditures)

3. According to 2013 cash cost breakdown14% for maintenance

330322

908

(8)

380

19017

Industrial Capex2013(1)

Expansion(2) Sustaining Capex2013

MaintenanceOPEX(3)

IFRS 3 Depreciation Other Total Depreciation/Amortization 2013


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WHY SHOULD YOU NOT USE NET INCOME OR OPERATINGPROFIT FOR THE ROE AND ROIC CALCULATION?

34

We recommend using a proxy for the net income or operating profit that

eliminates the already mentioned non-cash items, resulting in a metric that wouldcapture a cash approach

ROEAdj. EbitdaTotal Capex

InterestTaxes

Shareholders Equity

ROICAdj. EbitdaTotal Capex

InterestTaxes

Invested Capital

Worth mentioning that any capital gains from land sales would be captured by operatingprofit (EBIT), so when using Adj. EBITDA Capex, we are not capturing the return on landsale, as in the case of Parkia deal in 2013 (capital gain before taxes: R$ 800 million)

Land sold to Parkia represented 38% ofFibrias own land in December, 2013.

Invested Capital = Account receivable + Inventories + current liabilities + fixed assets + Biological Assets


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SUBSTITUTING NET INCOME AND ADJUSTING EQUITY TOGIVE A CASH-BASED RETURN ON EQUITY

35

Adj. EBITDACAPEXInterestTaxes(R$ million)

-558

918

121

640

1,020 1,042

2009 2010 2011 2012 2013 2014 LTM

Including capital

gains from the land

sale in 2013, ROE

for that year would

have been 15%

Shareholders Equity (R$ million)

8,109 10,571 10,880 10,417 10,035 10,254

2.5204.669 4.089 3.760 3.447 3.213

2009 2010 2011 2012 2013 2014 LTM

Shareholder Equity Before IFRS IFRS 3

ROE = (Adj. EbitdaCAPEXInterest - Taxes) / Equity before IFRS

-6.9%

8.7%

1.1%

6.1%

10.2% 10.2%

2009 2010 2011 2012 2013 2014 LTM


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CASH ROE, BEFORE IFRS

36

ROE = Net Income / EquityROE = (Adj. EbitdaCAPEXInterest - Taxes) /

Equity before IFRS

24.4%

4.0%

-5.8%-4.7% -4.7%

3.5%

2009 2010 2011 2012 2013LTM2014

-6.9%

8.7%

1.1%

6.1%

10.2% 10.2%

2009 2010 2011 2012 2013LTM2014

S S O O C


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...AND THE SAME APPLIES TO THE ROIC

37

Invested Capital = Account receivable+ Inventories + current liabilities + fixed

assets + Biological Assets

37

Adj. EBITDACAPEXInterestTaxes(R$ million)

Invested Capital (R$ million)

-558

918

121

640

1,020 1,042

2009 2010 2011 2012 2013 2014LTM

Including capital

gains from the land

sale in 2013, ROIC

for that year would

have been 11%

ROIC = (Adj. EbitdaCAPEXInterest - Taxes) /Capital Employed before IFRS

-2.9%

5.1%

0.8%

4.2%

7.2% 7.3%

2009 2010 2011 2012 2013 2014LTM

19,21617,951 15,227 15,068 14,106 14,265

2,133 2,0361,940 1,833 1,573 1,532

1,512 1,263

931 874 693 695

2009 2010 2011 2012 2013 2014 LTM

Invested Capital Before IFRS IFRS 3 IAS 41

CLOSING REMARKS


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CLOSING REMARKS

38

Net income should be considered as a reference for dividend purposesonly, not for return metrics;

Most of the difference between capex and depreciation/depletionexplained by accounting factors generated by IFRS;

Positive evolution of Fibrias ROE and ROIC in recent years.


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Operational Risk ManagementThe FM Global approach

FM GLOBAL BY THE NUMBERS


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FM GLOBAL BY THE NUMBERS

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~3,000 total clients

310 clients in Brazil

178 years

31 years in Brazil

US$ 5.6 Bn premium p.a.

US$ 10.3 Bn surplus

AA Fitch

A+ AM Best

THE FM GLOBAL DIFFERENCE


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THE FM GLOBAL DIFFERENCE

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ENGINEERING1800 field engineers

Singlefocus onProperty

MutualOwnership

Membershipcredits

Administrationand Claims

RESEARCH CAMPUS FM GLOBAL


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RESEARCH CAMPUS - FM GLOBAL

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NORTH AND SOUTH AMERICA MARKET SHARE


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NORTH AND SOUTH AMERICA MARKET SHARE

4343

Pulp Capacity Recovery Units Paper Capacity

69%

FM Global Others

65%

FM Global Others

64%

FM Global Others

WHAT DO THESE COMPANIES HAVE IN COMMON?


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WHAT DO THESE COMPANIES HAVE IN COMMON?

44

A CLEARLY DEFINED PATH TO HPR
http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=Fs7oJMZVMNQJaM&tbnid=6wNTPtqNTPcvRM:&ved=0CAUQjRw&url=http://www.logostage.com/logo/vale/&ei=FhvfUcj6Lsm2yAGQ5oCICw&bvm=bv.48705608,d.ZGU&psig=AFQjCNE9WAHqX1ckZpOQUwOOASAE-vxcVw&ust=1373662354030904http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=Fs7oJMZVMNQJaM&tbnid=6wNTPtqNTPcvRM:&ved=0CAUQjRw&url=http://www.logostage.com/logo/vale/&ei=FhvfUcj6Lsm2yAGQ5oCICw&bvm=bv.48705608,d.ZGU&psig=AFQjCNE9WAHqX1ckZpOQUwOOASAE-vxcVw&ust=1373662354030904http://www.google.com/url?sa=i&rct=j&q=cemex&source=images&cd=&cad=rja&docid=L49E1jCLSCgS-M&tbnid=_4jwcPlrlB9jjM:&ved=0CAUQjRw&url=https://mexicoinstitute.wordpress.com/tag/cemex/&ei=1eh3UcCGNPPy0QGy7oDwBw&bvm=bv.45645796,d.dmQ&psig=AFQjCNHftAsQtA66xaPW-rr3gLpfh9gyZQ&ust=1366899280412188http://www.google.com/url?sa=i&rct=j&q=cemex&source=images&cd=&cad=rja&docid=L49E1jCLSCgS-M&tbnid=_4jwcPlrlB9jjM:&ved=0CAUQjRw&url=https://mexicoinstitute.wordpress.com/tag/cemex/&ei=1eh3UcCGNPPy0QGy7oDwBw&bvm=bv.45645796,d.dmQ&psig=AFQjCNHftAsQtA66xaPW-rr3gLpfh9gyZQ&ust=1366899280412188


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A CLEARLY DEFINED PATH TO HPR

45

1. Process commitment

2. Management interest

3. Investment commitment

4. Engineering support

5. Continuous improvement

FM GLOBAL RELATIONSHIP TENURE (IN YEARS)


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FM GLOBAL RELATIONSHIP TENURE (IN YEARS)

127

123

113

111

90

76

65

12

31%

25%

20%

24%

0 - 5 years 5 -10 years 10 -15 years > 20 years

FM Global Client Average

46

HPR HIGHLY PROTECTED RISK


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HPRHIGHLY PROTECTED RISK

47

PREVENTION HPRPROTECTION

CAPACITY

US$ 15 million HPR location: US$1 billion

RISK POTENTIAL


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RISK POTENTIAL

48

Initial risk

Magnitude($)

Pro

ba

bility

Maximum Foreseeable Loss

(MFL)

Prevention

Protection

HPR


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49

Production

Time

$

$

Normal Activities

Loss

Disruption

Production

Adequate protection(HPR)

HPR BENEFIT


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HPR BENEFIT

50

0,81,5

5,1

22,0

Average Loss Cost (US$ million) Average days to resume production

HPR Non HPR

Source: FM Global clients history 2000 - 2010


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51

And if there is a loss?

PULP AND PAPER LOSSES BY PERIL


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PULP AND PAPER LOSSESBY PERIL

52Source: Loss history 10 years | FM Global clients

35%

22%

12%

9%

8%

8%6%

Mechanical breakdown

Fire

Natural Catastrophe

Other

Collapse

Pressude vessel

Electrical failure

ib i d Gl b l hi


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Fibria and FM Global partnership

ACCOMPLISHMENTS

12 Years of Partnership

275 Recommendations completed252 Field Engineering Visits

10 Visits per year with Fibrias Management

52

MEMBERSHIP CREDIT ($USD MILLION)


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MEMBERSHIP CREDIT ($USD MILLION)

54

237

316355

380420

465

2001 2004 2007 2010 2013 2014

Fibria

MembershipCredit

$ 2,440,000


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55

How close is Fibria to being fully HPR?


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56

HPR BENEFITS


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HPR BENEFITS

57

Maintain strong revenue streams

Superior risk management

Reduce production volatility

Promote operational stability

Meet customer needs and reliability

Preserve reputation

PROTECT FINANCIAL RESULTS

IMPROVE COMPETITIVENESS


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FORESTRY CAPEXAires Galhardo Forestry Operations

58

CAPITAL EXPENDITURE


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CAPITAL EXPENDITURE

59

Maintenance

FertilizerPesticides Forestry protectionSoil preparationSeedling

159%

224%

35%

44%

53%

63%

72%

Planting orsprouding

Harvestingand

logistics

Opex

The information contained herein is for the exclusive use of Fibria Celulose SA, and may not be transferred without authorization from the Company.

Base date: July, 2014. I t does not include depreciation.

CAPITAL EXPENDITURE


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CAPITAL EXPENDITURE

60

Maintenance

FertilizerPesticides Forestry protectionSoil preparationSeedling

159%

224%

35%

44%

53%

63%

72%

Planting orsprouding

Harvestingand

logistics

Opex

The information contained herein is for the exclusive use of Fibria Celulose SA, and may not be transferred without authorization from the Company.

Base date: July, 2014. I t does not include depreciation.

FIBRIA INFLATION


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FIBRIA INFLATIONFOCUS ON ALWAYS REMAINING BELOW THEIPCA/INCAF

61

Index 2007=100

100

120

140

160

2007 2008 2009 2010 2011 2012 2013 2014 RF

Labor

Fertilizers

Pesticides

Fuel

etc

INCAF - Brazilian Wood Cost Index

FIBRIA - Fibria Wood Cost Index

IPCA - Brazilian Inflation

MAINTENANCE CAPEX


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MAINTENANCE CAPEX(R$ MILLION)

1,416

1,078

1,208

1,520

2011 2012 3Q13 LTM Land Deal:Rural

Partnership

Non recurringwood

purchase

Inflation FX Rate Modernization Others 2014E

62

NON RECURRING WOOD IMPACTS ON CASH


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O CU G OO C S O C SCOST AND CAPEX

63

The wood impact should take 2-2.5 years when then it willbecome again to normal levels

Aracruz Unit:

Non recurring increase in third party wood due to:1) Limited investments in 2008-2009 due to financial crisis2) Higher volumes of matured wood from partnership program3) Physiological disturbance in southern Bahia (controlled impact)

Trs Lagoas Unit:

Increase in higher mill to forest distance under partnership programcontracts in Mato Grosso do Sul, in order to supply the original start-upof Trs Lagoas II (2014).

Jacare Unit:

2-year increase in partnership program in So Paulo.

WOOD PURCHASING


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64

0%

5%

10%15%

20%

25%

30%

35%

40%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

In 2008/2009, in an effort to reduce costs, weemphasized the cutting of our own wood and

stopped purchasing contracted forest fostering wood.

35% of third party wood supply in 2015

This percentage will start reducing in 2016 reachinga long-term third party wood rate of 8%

MAINTENANCE CAPEX


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(R$ MILLION)

1,416

1,078

1,208

1,520

2011 2012 3Q13 LTM Land Deal:Rural

Partnership

Non recurringwood

purchase

Inflation FX Rate Modernization Others 2014E

65

FORESTRY CAPEXFIBRIA STRATEGY TO SEEK


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OUT BASE PARTNERSHIPS FOR WOOD SUPPLY

66

0,0

0,5

1,0

1,5

2011 2012 2013 RF2014

R$million

Operating Cost Wood Purchases/Leasing Parkia Roads Sustaining Other

OPERATING COSTS


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STABILITY THROUGH IMPROVED MANAGEMENTAND INNOVATION

67

Effective investment per

hectare remains in line with

the strategy of controlling

inflation

R$/ha

1,006 960 9951,052

100.0% 95.4% 98.9% 104.6%

2011 2012 2013 RF2014

R$/ton

96 94 98 101

FOREST OF THE FUTURE


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2014 ACHIEVEMENT OF 83% OF THE CUMULATIVE CURVE

68


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A NEW OUTLOOKA NEW MANAGEMENT MODEL

69

NEW SELF-PROPELLED PESTICIDE APPLICATION


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TECHNOLOGY

70

30% of area cleaning operatingcost in Bahia

85 % machines for this operation

62 % of personnel in thisoperation

Annual CAPEX savings of R$ 4.6 million

NPV - R$ 35.6 million

COMBINED ACTIVITIES
http://localhost/var/www/apps/conversion/tmp/scratch_4/IMG_4659.MOVhttp://localhost/var/www/apps/conversion/tmp/scratch_4/IMG_4659.MOV


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OPTIMIZATION OF THE MAINTENANCE AND LOGISTICSSUPPORT STRUCTURE

71

Tillage FertilizationBasin

IrrigationPre-

emergent

Annual CAPEX Savings R$ 1.8 millionNPV - R$ 16 million

SUSTAINING FORESTRY


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72

This account also peaked in these years due to the replacement of machinesat Trs Lagoas

In an effort to reduce the impact, we introduced the Skidder model in 2014,reducing the fleet from 5 Clambuncks to 3 Skidders

4.18

2.64

75

120

Before After

Cost (R$/m) Productivity (m/h)


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73

FIBRIA FORESTRY IMPLEMENT PROJECT(FFIP)

FIBRIA FORESTRY IMPLEMENT PROJECT (FFIP)


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REQUIRED PATENT

74

Reduce the structural weight of the implement by 15%

Increase the volumetric capacity of the cargo box by 10%, through the use of

differentiated materials

Savings of R$2.80/m

54.649.7

56.562.1

Conventional FFIP

#trips/month/truck Cargo box/truck

ALIGNMENT


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75

Average Projected Annual Increase at 7 years,

base Commercial Volume with Bark

MAI7 INV: MAI InventoryLast measurementprojects

Only plantations over 2 years old aremeasured (< 2012)

Tip

Bark

Stump

Parameters (references):

MAI7tot (cc)*: 100%

MAI7com (cc)*: 95%

MAI7com (sc)**: 84%

Bark: 11 12%

Forecast Chart

Analyzed Variable

Age years)

MAI: Mean Annual Increment Pulp Planting*With bark ** Without bark

FIBRIA MAI


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76

40

33

36

39

42

45

FIBRIA MAI7

2007 2008 2009 2010 2011 2012 average

mcc/ha

.year

Harvest Year

MANAGEMENT OF COMPLEXITY WITH


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COMPETITIVE DIFFERENTIAL

77

Integrated Strategic Planning

UNsMax value

FIbriaM&A

GAP/Surpluswood

SupplyStrategy

ForestryManagemen

t

FOCUS ON STAKEHOLDERS

Digestor

FOCUS ON THE CLIENT

What / when toharvest?

What / when andhow to transport ?

Where / what typeof management to

adopt?Clones/IMACEL

Road Plan

Supply Plan Harvest PlanTransport

PlanSilviculture

PlanNursery Plan

Long

Mid

Short

LONG TERM PLANNINGB d f k t d i


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78

3 production units

27,000 plots of land

500,000 hectares of planted

area

3 transport modes +

transhipment of wood (hubs

and deposits)

Base Multipurpose Forestry Matrix

Proof of IMACCEL gains

Enhancement of land flows

Insertion of biomass module and the possibility of sending wood to thebiomass unit

Maximize the

Companys value

Minimize CAPEX

Minimize OPEX

Partnership with

companies

Management

recommendation

Acquisitions and

divestments

Operational strategy

definition

New businesses

analysis

Be prepared for market dynamics

WE REMAIN CONFIDENT IN MAINTAININGO S COS S O O


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FORESTRY COSTS BELOW INFLATION

79

FORESTRY HARVEST LOGISTICS

Increase operationalproductivity through new

technology

Forestry Nano-PlanningUsing spatial variability in our

favor to maximize theproductivity of each site

Use of larger marchines Lighter trucks withgreater load capacity

Maintain operational

excellence

OPERATIONAL PROCESSES

The next phase of the Forest of the Future will be proposed for 2015 to 2018


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CLIMATE CHANGE AND ITS EFFECTS ON EUCALYPTUSPLANTATIONS: Turning adversity into a competitive advantage

Fernando BertolucciTechnology Center


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Climate ChangeAn overview

The Fibria ApproachDimensions of analysis, resources and tools

Impacts of climate change oneucalyptus plantations

Actions to improve adaptation andthe mitigation of risks

81


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82

CLIMATE CHANGE - an overview


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Main Observed Indicators of a Changing Global Climate

Northern Hemisphere Spring Snow CoverA

Figuras IPCC 2013

Artic Summer Sea Ice ExtentB

Change in Global Average Upper Heat ContentC Global Average Sea Level ChangeD

84



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Simulation: average of several models for different scenarios by 2100

IPCC 2013 Pictures

Changes in average temperature in relation to current

Changes in average rainfall in relation to current

Least drastic scenario Most drastic scenario

85



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Global warming isan unequivocal

fact:

the surface of the earthhas been successivelywarmer over the pastthree decades than it

has during any decadesince 1850

Concentrations ofCO2 have

increased 40%since pre-industrial

times

There is a clearhuman impact on

the climate

86



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86

The impacts are clear: Ex. Mountain Pine Beetle

A necessary condition for naturalpest (larvae) control: -30Ctemperature for at least fivecalendar days

Milder winters, previouslyuncommon:

Expansion of pests

Epidemics, unprecedenteddamage

Area affected (USA/CANADA):over 20 million ha.


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87

HOW HAS FIBRIA

APPROACHEDTHIS ISSUE?

UNDERSTANDING THE BASICS


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88

Physiological Processes Robust Databases

UNDERSTANDING THE BASICS


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89

Phenotype (F) Genotype (G) Environment (A) GxE

SP

MS

ES and BA

Open-air laboratories ($$)

Sensors and equipment Specialized field teams Partnerships with Universities

and Research Institutes

23,000 planting blocks:

Very diverse environments Different growth potentials Specific needs

MONITORING

STUDIES

DIMENSIONS OF ANALYSIS


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90

TREE(TECHS)

PLANTATION(FLUX TOWERS)

LANDSCAPE(WATERSHEDS)

Different Scales

RESOURCES AND TOOLS USED - TREE LEVEL


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91

TECHS: Tolerance of Eucalyptus Clones to Hydric and Thermal Stress25 COMPANIES / 8 UNIVERSITIES

CONNECTION BETWEEN FORESTRY, ECOPHYSIOLOGY AND BREEDING

7 climate types

Annual rainfall: 800 to 2600mm

EXCLUSION OF RAIN:+ variability

RESOURCES AND TOOLS USED - TREE LEVEL


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92

Stomatalconductance

Measurementsphotosynthesis

Respiration

Gas exchange

Leaf waterpotential

Sap flow

Leaf areaindex

Leaf area index

Leaf and treetranspiration

RESOURCES AND TOOLS USED

PLANTATION LEVEL


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93

PLANTATION LEVEL

Flow towers

Second-by-second measurements of climate andplant growth

Balances of carbon, water and energy, as well asthe efficient use of these resources #

Modeling the processes that control growth

# Eddy-covariance methodology

RESOURCES AND TOOLS USED

LANDSCAPE LEVEL


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94

LANDSCAPE LEVEL

Watershed Studies (validated):

Monitoring of the main components of the water, carbon and nutrient cycles

RunoffWater tableRainwater interception

RESOURCES AND TOOLS USED: SUMMARY


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95

Flow Towers (Eucalyptus, Cerrado, Grassland)6

Intensely Monitored Watersheds7

Fibria Autmatic Weather Stations55

APPLYING EXPERTISE

VALUE ADDED TO BUSINESS


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96

VALUE ADDED TO BUSINESS

MODELING

Adaptado de PMS Instrument Company

Humidity

TemperatureRadiation

Wind

Transpiration

Leaf area

Photosynthesis

Growth

Nutrition

Humidity

FertilityTexture

Temperature

Soil type

Environmentalconditions

Gross primaryproduction

LAI

CO2

Interceptedlight

Photosynthesis

Light interception

T, VPD,

H2O, N

Net primaryproduction

Respiration

Climateand soil

condition

Stem RootsLeaves

FROM UNDERSTANDING PHENOMENA TO

GROWTH MODELS (SIMULATIONS)

3-PG

Physiological Principles Predicting Growth


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97

IMPACTS OF CLIMATE CHANGE


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98

Changes in weather patterns

Variation in rainfall patterns in Esprito Santo (1968 to 2010)

500

600

700

800

900

1000

1100

1200

13001400

1500

1600

1700

1800

1900

2000

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

rainfall (mm)

Reduced rainfall and increased amplitude (extreme weather)

IMPACTS OF CLIMATE CHANGE


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99

Reduced rainfall vs. forest productivity

Productivity Simulation

Historical Average 2003 (dry year)

CLIMATE CHANGE IMPACTS


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100

The impact of increased CO2

Several Studies

Ex.:

The Hawkesbury Forest Experiment

University of Western Sydney (Australia)

Effects of increased atmospheric CO2 on plants:

Stimulation of photosynthetic activityincreasedcarbohydrates, accelerating the growth of the crowns andstems, leading to greater productivity.

Reduction in stomatal conductanceless use of water

positive impact on the amount of water that flows into riversand streams, as well as recharging the water table.

CLIMATE CHANGE IMPACTS

i f i i


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101

Compensation for the increase in CO2

HISTORICAL PRODUCTIVITY PRODUCTIVITY 2030 PRODUCTIVITY 2050

Meteorological and eco-physiologicalmodels (simulations) indicate potential productivity

gains in areas currently used by Fibria

Note: 3 global models (HAD, CSIRO, PCM); change in precipitation, VPD and temperature, 4 IPCC scenarios (A1, B1, A2, B2)


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102

ADAPTATION AND RISK MITIGATION ACTIONS


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103

Areas with environmental restrictions, especially with limitations on the availabilityof water, will be needed to meet the future demand for wood (a global issue)

In this context, considering its 20 years of research into the issue, Fibria hasintensified its actions to adapt to this new situation, turning a potential probleminto an opportunity to generate a competitive advantage



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104

1 2

3 4

5 6

Detailed soil and climaticclassification and

mapping of all of ourplanting areas

Evaluation of traditionalgenetic material(urograndis) under waterstress - clonal tests andexperiments in climatic extremes

Introduction of specieswith a tolerance to waterstress

Environmental changesimulations andevaluations of the risks ofEucalyptus pests anddiseases

Mapping andmonitoring of exoticpests and disease

Genetic transformation ofEucalyptus for greatertolerance to climaticextremes


E CLONAL TEST IN MONTEZUMA MG (650 f i f ll ) 5


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105

Ex.: CLONAL TEST IN MONTEZUMA MG (650 mm of rainfall per year)5years old

Clone A Clone D

Clone IMA4m3/ha.yr

A 43.6

B 40.3

C 39.7

D 39.5

E 38.1

F 37.3

G 37.1

H 34.8

FINAL MESSAGE: THE POSSIBILITIES FOR OUR FUTURE

A NEW BALANCE DEPENDS ON RESPECT FOR NATURAL RESOURCES


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A NEW BALANCE DEPENDS ON RESPECT FOR NATURAL RESOURCES

Technological Level x Wood productivity (m3

/ha.year)

0

10

20

30

40

50

60

70

Historical Actual Potential

DEFINING FACTORSClimate

(water, temperature,sunlight and CO2)

LIMITING FACTORSSoil, nutrients,genotypes,

management

REDUCING FACTORSWeeds,

Pestsand diseases 20 YEARS OF

KNOWLEDGE:

Predictability:anticipating the future

Mitigation of limitingfactors

Produce more with lessWoodproductivity(m3/ha.year)

Technological Level

MANY OF THESE RESULTS CAME FROM OUROPEN-AIR LAB


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107

THE WATERSHED PROJECT (since early 90s)

Plant Ecophysiology

Hydrogeology

Meteorology

Water Balance

Carbon Allocation

Soil Erosion

Flora

Fauna

Forest modelling

Integrating scientific areas of study!

WATERSHED PROJECT

Main Objectives


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Develop forestry management techniques and practices to increase forestproductivity and reduce possible environmental impacts

Answer controversial questions about Fibria's Eucalyptus plantations involvingdifferent stakeholders

Develop and enhance process-based models to predict and estimate forest

growth taking into account environmental factors

Promote environmental education and sustainable conscious of surroundingcommunities

Maintain operational licenses and certifications

108

Main Objectives

WATERSHED PROJECT

Main Objectives


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Total area = 150 ha

Previous land use: pasture

Natural vegetation: Atlantic rainforest

Climate: tropical summer wet season and winter dry season.

Current land use:

E. grandis x E. urophylla hybrids (5th cycle) (65% of the land) with two plantation ages

Rainforest regenerating (30%)

Roads (5%)

109

Main Objectives

WATERSHED PROJECT

Site Map and Tour


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110

Site Map and Tour

WATERTABLE

TREETRANSPIRATION

SOILEROSION

CARBONBALANCE

SOILEROSION

1

2

3


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111

Fibria Investor Tour

September 16, 2014

D

DIP: Deinked Pulp. Paper pulp produced by deinkingof recovered paper.

GLOSSARYB

BCP: Bleached chemical pulp (includes bleached kraft pulp and all sulphite pulp,


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g

H

Hardwood pulp: is based on short fibre wood species with broad leaves, typicallyeucalyptus, birch aspen and mixed hardwoods. The hardwoods are simply harderthan the softwoods because the fibres are shorter. Shorter fibre makes for densercellulose fibres, but also for weaker cellulose. Thus, hardwood is well suited for

copy paper, while softwood is required for lightweight printing papers and strongpackaging papers. Among the bleached market kraft pulps, 55% is softwood pulpand 45% is hardwood pulp.

L

LBKP: Leaf bleached kraft pulp,also known as BHKP.

M

Mechanically processed pulp: (also known as "high-yield" pulp) is characterized bythe fact that a very high percentage (normally in the range of 85 to 95 percent) ofthe original wood components are retained in the final product. The mechanicalprocesses include groundwood, refiner mechanical, thermo mechanical and

chemi-thermomechanical. They are products with high bulk, opacity andabsorbency, some qualities that are particularly advantageous in certain useappl ications, l ike in the production of newsprint and in publication grades ofprinting and writing paper. Dissolving pulp is highly puri fied chemical pulp ofspecial quality, with a very high alpha-cellulose content (usually 90% or more),intended primarily for conversion into chemical derivatives of cellulose and usedmainly in the manufacture of viscose staple fibre, solvent spin fibre an filament.These pulps are always bleached. They are used principal ly as the source ofcel lulose in the manufacture of such products as manmade fibers, plastics ,lacquers, rayon, acetate and explosives. Pulp is produced for internalconsumption (integrated pulp) or for external sales (market pulp). Of the totalglobal capacity of 215mn tonnes/year, 48mn tonnes (about 255) are market pulp.For statistical purposes, all pulp which crosses an international border is defined asmarket pulp, even if i t i s being transferred between mills belonging to a singlecompany. Bleached chemical pulp (BCP, most of it bleached kraft pulp or BKP) isthe main pulp type and accounts for nearly 90% of al l market pulp capaci ty(42.5mn tonnes/year). The integrated capacity of bleached kraft pulp is about53mn tonnes, bringing the total global capacity of bleach kraft to roughly 95mntonnes per year . Pulp can be categori zed according to what type of woodspecies is used, or more specifically, the length of the wood fibres. Softwood pulpis based on long fibre wood species. These are typically trees with needles, suchas pine and spruce. Pine is the main raw material for chemical softwood pulp,while spruce is excellent for the production of mechanical pulps used inpublication papers.

(including unbleached sulphite). Also known as "white pulp".BCTMP: Bleachedchemi-thermomechanical pulp (Market BCTMP is produced mainly in Canadaand New Zealand).

BEKP: Bleached eucalyptus kraft pulp (Market BEKP is produced mainly in LatinAmerica and Iberia. Some is also produced in Norway and Thailand).

BHKP: Bleached hardwood kraft pulp (all grades, including BEKP, birch, SMHW,NMHW).

Birch: Bleached birch kraft pulp. Birch is the principal hardwood grade producedin the Nordic countries. Some is also produced in Canada, although for statisticalpurposes Canadian birch is categorized as northern mixed hardwood - NMHW.

BKP: Bleached kraft pulp (includes all softwood and hardwood kraft pulp.)

BSKP: Bleached softwood kraft pulp (all grades).

BSP: Bleached sulphite pulp.

c

Chemically processed pulp: which accounts for approximately 55% of totalglobal pulp production, can be broken down further into sulphate pulp (kraftpulp) or sulphite pulp. The name "kraft" is derived from the German word for"strong". The method involves cooking (digesting) wood chips in an alkal inesolution for several hours during which time the chemicals attack the lignin in thewood. The dissolved lignin is later removed leaving behind the cellulose fibres.Sulphite is an old and obsolete production process, and most of the chemicalpulp today is produced through the sulphate production process. Chemical pulpcan be further categorized into bleached and unbleached. Unbleached Kraftpulp i s dark brown in color, so before i t can be used in many papermakingapplications it must undergo a series of bleaching processes.

CMP: Chemi-mechanical pulp. It is the pulp of ligno-cellulose materials, that are

previously treated with chemical reagents, obtained by defibration at anatmospheric pressure.

CTMP: Chemi-thermomechanical pulp. A category of pulp which is produced bya process in which wood chips are treated with chemicals prior to heating andrefining. Unbleached CTMP is mainly used in integrated paper mills. BleachedCTMP,dried and sold as market pulp, has grown significantly in importance and isnow widely used in the production of many grades of paper, including woodfreepapers.

GLOSSARYN

NBKP: Needle bleached kraft pulp, also known as BSKP.

T

TCF: Totally chlorine free. Pulp bleached without the use of any chlorine or


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NBSK: Northern bleached softwood kraft pulp, the industry's benchmark grade ofpulp. Market NBSK is produced mainly in Canada and the Nordic countries.Some NBSK is also produced in north-western USA and in Russia .

NMHW: Northern mixed hardwood (kraft) pulp. Sometimes known as NBHK,northern bleached hardwood kraft.

P

Pulp: is the main raw material used in the production of virgin-fibre paper andpaperboard. Fibres are long structures, formed by a microscopic size plant cell,not wide butlong, hollow and with wallsthat vary in width.

Pulpwood: i s wood used to produce pulp that i s used in the manufacture oflumber or plywood. Paper can also be produced using non-wood fibres, l ikestraw, bagasse or bamboo. Recycled paper and paperboard uses recoveredpaper and board instead of virgin fibre. Pulp can be classified by the productionprocess used to separate the three main components of the wood: cellulose,water and lignin. Lignin acts as the cementing agent in wood, binding thecel lulose fibres together. This process can be chemical (wood cooked withchemicals), mechanical (wood ground withphysical force), or a combination.

R

RMP: Refiner Pulp. Pulp produced by subjecting wood chips and/or residues toatmospheric or open-discharge refining.

S

Semi-chemical pulp: High-yield pulp produced by a mild chemical treatment ofthe raw material followed by a mechanical defibrating operation, where thelignin is onlypartially removed.

SGW: Stone Groundwood Pulp. Pulp produced by grinding wood logs or bolts(usually 4 feet in length) into relatively short fibres.

SMHW: Southern mixed hardwood (kraft) pulp (produced exclusively in thesouthern United States .)

Sources: Celulose Online,Bracelpa, PPPC and Merrill Lynch.

Semi-chemical pulp: High-yield pulp produced by a mild chemical treatment ofthe raw material followed by a mechanical defibrating operation, where thelignin is onlypartially removed

chlorinated chemical compounds.

TMP: Thermomechanical Pulp. A high-yield pulp produced by a process in whichwood particles are softened by pre-heating under pressure prior to a pressurizedrefining stage. TMP is generally used at mills producing newsprint and mechanicalprinting papers. Many older mills have replaced their groundwood and sulphitepulping operations withTMP.

U

UKP: Unbleached kraft pulp.

USP: Unbleached sulphite pulp.

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