Brazilian Pulp And Paper Industry

May 2013

2

Index

Industry Overview 3

Main World And Pulp and Paper Producers 2009 4

Planted Forests by the Brazilian Pulp and Paper Industry 5

Planted Forests Area in the World 6

Planted Forests Productivity Evolution 7

Forestry: Brazil, World Benchmark 8

Rotation And Yield Comparison Hardwood Pulp Species 9

Rotation And Yield Comparison Softwood Pulp Species 10

Forest Area Required for Pulp Mill 11

Contribution to the Environment 12

Energy Matrix 13

Social Contribution 14

Brazilian Pulp and Paper Production 15

Recycled Paper Recovery Rate 16

Recycled Paper 17

Paper Apparent Consumption per Capita 18

Industry Trade Balance Evolution 19

Agribusiness selected products 20

Industry Performance 21

Paper Domestic Sales 22

Industry Trade Balance 23

Brazilian Pulp Export by Destination 2011 24

Brazilian Pulp Export by Destination 25

China Imports by Origin Bleached Hardwood Kraft Pulp 26

Brazilian Paper Export by Destination 27

Members Companies 28

3

Industry Overview

Arquivo Celso Foelkel

3

220 companies spread in 540 municipalities, located in 18 States

2.2 million hectares of planted area for industrial use

2.9 million hectares of preserved forests

Total certified forest area: 2.7 million hectares

Exports 2012: US$ 6.7 billion

Trade Balance 2012: US$ 4.7 billion

Taxes: R$ 3.5 billion

Jobs: 128 thousand direct jobs (industry 77 thousand, forests 51 thousand)

and 640 thousand indirect jobs

4

Main World and Pulp and Paper Producers 2011

1,000 tons 1,000 tons

1. USA 49,740 1. China 99,300

2. China 19,542 2. USA 75,083

3. Canada 18,308 3. Japan 26,627

4. Brazil * 13,922 4. Germany 22,698

5. Sweden 11,859 5. Canada 12,112

6. Finland 10,363 6. South Korea 11,492

7. Japan 9,020 7. Finland 11,329

8. Russia 7,453 8. Sweden 11,298

9. Indonesia 6,805 9. Brazil 10,159

10. Chile 4,876 10. Indonesia 10,035

11. India 3,999 11. India 9,655

12. Germany 2,725 12. Italy 9,130

Other 25,215 Other 89,959

TOTAL WORLD 183,827 TOTAL WORLD 398,877

Source: RISI

* Source: Bracelpa

Country Country

PULP PAPER

5

2011 – Planted Forests by the Pulp and Paper Industry

1,000 hectares Brazil: 2.2 million de hectares

10

43

81

16

6

478

5

208

309

163

2

409

265

143

209

6

Planted Forests Area in the World 2010

1,000 hectares

CountryCountry

Total Area

Planted

Forest Area (¹)%

Japan 36,450 10,326 28.3

Finland 30,409 5,904 19.4

Germany 34,887 5,283 15.1

Sweden 41,033 3,613 8.8

China 942,530 77,157 8.2

India 297,319 10,211 3.4

Chile 74,880 2,384 3.2

United States 916,193 25,363 2.8

Indonesia 181,157 3,549 2.0

Brazil (²) 851,196 6,973 0.8

Pulp & Paper (³) 2,196 0.3

(¹) Source: FAO/STCP/SAE

(²) Source: ABRAF

(³) Source: Bracelpa 2010

7

Planted Forests Productivity Evolution

REASONS FOR HIGH PRODUCTIVITY LEVELS

Climate and soilResearchOrganized private sectorHigh qualified labor force

TECHNOLOGICAL ADVANCES

GeneticsBiotechnologyHigh quality raw materialSocio-environmental planningSustainable Forest ManagementRotation

Species 1980 2011Growth

Rate

• Eucalyptus 24 44 83%

• Pinus 19 38 100%

WOOD FOR PULP PRODUCTION

Productivity (m³/ha/year)

8

Fast growing forest productivity in other countries (m³/ha/year)

Source: Pöyry * Fonte: Bracelpa

Forestry: Brazil, World Benchmark

25

20

25

41

30

30

35

70

Chile(eucalyptus)

Indonesia(acacia)

Uruguay(eucalyptus)

Brazil(eucalyptus)

Potential

Actual

9

Rotation and Yield Comparison Hardwood Pulp Species

Species CountryRotation

(years)

Yield

m3/ha/year

Eucalyptus Brazil 7 44

Eucalyptus South Africa 8-10 20

Eucalyptus Chile 10-12 25

Eucalyptus Portugal 12-15 12

Eucalyptus Spain 12-15 10

Birch Sweden 35-40 6

Birch Finland 35-40 4

Source: Pöyry

10

Rotation and Yield Comparison Softwood Pulp Species

Species CountryRotation

(years)

Yield

m3/ha/year

Pinus spp Brazil 15 38

Pinus radiata Chile 25 22

Pinus radiata New Zealand 25 22

Pinus elliottii / taeda United States 25 10

Douglas Fir Canada (coast) 45 7

Picea abies Sweden 70-80 4

Picea abies Finland 70-80 4

Picea glauca Canada (inland) 55 3

Picea mariana Canada (east) 90 2

Source: Pöyry

11

Forest Area (ha) Required for a 1,0 million tons/year Admit Pulp Mill

Source: Pöyry

Brazil 100.000

Iberian Peninsula300.000

Scandinavia720.000

12

Contribution to the Environment by the Sector’s Planted Forests

Planted forests do not compete with traditional agriculture

Restoration of degraded land

Soil conservation

Using land not fit for agriculture

Mixing plantations and natural forests

Biodiversity protection

Watershed protection

CO2 sequestration

Less pressure on natural forests12

13

1970-2010 – Energy Matrix of the Pulp and Paper Industry

Source: Brazilian National Energy Balance* Sub Product (Firewood)

18

33

4752

65 65 6628

15

27 21

19 19 18

4548

18 1907 06 06

02 05 07 08 081004 05 03 02 02 02

0%

20%

40%

60%

80%

100%

1970 1980 1990 2000 2008 2009 2010

Black Licor Firewood Fuel Oil Natural Gas Other

14

Social Contribution

14

Pulp and paper industry has a prominent presence by motivating economic and social development in regions far away from big urban centers, investing in projects and initiatives in areas as:

Education

Health

Environmental responsibility

Income and jobs generation

Forest Fostering

15

Brazilian Pulp and Paper Production

1970 1980 1990 2008 2010 2012

Pulp 0,8 3,1 4,4 13 14 14

Paper 1,1 3,4 4,7 09 10 10

0

2

4

6

8

10

12

14

16

milh

ões

t

Annual Growth AveragePulp 7.1%

Paper 5.4%

16

Recycled Paper Recovery Rate

36%35%

38%

47%

45%

0

1.500

3.000

4.500

6.000

7.500

9.000

10.500

1990 1995 2000 2005 2011

tons

Paper Apparent Consumption Recovered Paper Consumption Recovery Rate %

17

2010 - Recycled Paper

* Volume of recovered paper in the country divided by paper apparent consumption

Source: RISI

** Source Bracelpa

Selected Countries

South Korea 91.6%

Germany 84.8%

Japan 79.3%

United Kingdom 78.7%

Spain 73.8%

United States 63.6%

Italy 62.8%

Indonesia 53.4%

Finland 48.9%

Mexico 48.8%

Argentina 45.8%

Brazil ** 45.5%

China 40.0%

Russia 36.4%

India 25.9%

Recovery Rate *

18

Paper Apparent Consumption Per Capita

Source: RISI *Source: Bracelpa

281

243

240,2

220

185

178

168

152

79

69

64

61

49

Finland

Germany

USA

Japan

Canada

Italy

UK

France

Chile

China

Mexico

Argentina

Brazil *

SELECTED COUNTRIESkg per capita

World Average57.0 kg per capita

19

Industry Trade Balance Evolution 1993-2012

Source: SECEX

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

US$

Mill

ion

Export Import Balance

20

Agribusiness Selected Products Exports x Planted Area in 2011

Source: CONAB/FNP/MAPA/SECEX

PRODUCTSEXPORTS

US$ million

PLANTED AREA

thousand haUS$ / ha

Soy Complex 24,154 25,018 965

Sugar + Alcohol 16,404 8,567 1,915

Coffee 8,731 2,753 3,171

Pulp & Paper 7,190 2,347 3,063

Corn 2,766 15,451 179

Cotton 1,977 1,430 1,383

21

Industry Perfomance 1,000 tons

2012 2013 (2)

.Production 13,922 13,999 0.6 4,688 4,834 3.1

.Import (1) 392 411 4.8 128 145 13.3

.Export (1) 8,478 8,513 0.4 2,837 2,967 4.6

.Apparent Consumption 5,836 5,897 1.0 1,979 2,012 1.7

2012 2013 (2)

.Production 10,159 10,171 0.1 3,369 3,435 2.0

.Import (1) 1,455 1,396 -4.1 472 430 -8.9

.Export (1) 2,052 1,875 -8.6 667 619 -7.2

.Apparent Consumption 9,562 9,692 1.4 3,174 3,246 2.3

(1) Source: SECEX(2) Preliminary data

PULP

PAPER

2011

2011

2012

2012

%

%

Jan-Apr

Jan-Apr

%

%

22

Paper Domestic Sales 1,000 tons

* Preliminary data

300

325

350

375

400

425

450

475

500

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dez

2012 2013

+ 5

.8 %

300

500

700

900

1.100

1.300

1.500

1.700

1.900

Jan-Apr2012

Jan-Apr2013*

23

Industry Trade Balance US$ Million FOB

2012 2013 %

Export 7,190 6,657 -7.4 2,194 2,246 2.4

.Pulp 5,002 4,706 -5.9 1,537 1,589 3.4

.Paper 2,188 1,951 -10.8 657 657 0.0

Import 2,128 1,945 -8.6 657 604 -8.1

.Pulp 374 339 -9.4 110 112 1.8

.Paper 1,754 1,606 -8.4 547 492 -10.1

Balance 5,062 4,712 -6.9 1,537 1,642 6.8

.Pulp 4,628 4,367 -5.6 1,427 1,477 3.5

.Paper 434 345 -20.5 110 165 50.0

Source: SECEX

2011 2012 %Jan-Apr

24

Pulp Paper

Source: SECEX

Brazilian Exports by Destination 2012

LatinAmerica

1%

Europe46%

NorthAmerica

19%

Africa0%

Asia &Oceania

8%

China26%

US$ 4.7 billion

LatinAmerica

59%Europe

15%

NorthAmerica

10%

Africa5%

Asia &Oceania

7%

China4%

US$ 2.0 billion

25

Jan-Apr/ 2012 Jan-Apr/2013

Source: SECEX

Brazilian Pulp Exports by Destination

LatinAmerica

1%

Europe44%

NorthAmerica

17%

Africa0%

Asia &Oceania

9%

China29%

US$ 1.5 billion

LatinAmerica

1%

Europe40%North

America18%

Africa0%

Asia &Oceania

8%

China33%

US$ 1.6 billion

26

China – Imports By Origin Bleached Hardwood Kraft Pulp

24 Source: SVEN DATA

By Region of Origin US$ millions 1,000 t

Europe Asia Brazil OtherOther America

625 707

498 534

921 739

0

500

1.000

1.500

2.000

2.500

Jan-Apr/2012 Jan-Apr/2013

-20 %

7 %

13 %

Var.12/11

349 419

279335

512460

0

200

400

600

800

1.000

1.200

1.400

Jan-Apr/2012 Jan-Apr/2013

-10 %

20 %

20 %

Var.12/11

27

Brazilian Paper Exports by Destination

25

Jan-Apr/2012 Jan-Apr/2013

Source: SECEX

LatinAmerica

54%

Europe16%

NorthAmerica

9%

Africa8%

Asia &Oceania

8%

China5%

US$ 657 million

LatinAmerica

54%

Europe16%

NorthAmerica

12%

Africa5%

Asia &Oceania

9%

China4%

US$ 657 million

28

Members Companies

Fellow Members Manufacturing Members

Adami

Arauco do Brasil

Arjo Wiggins Security

Bahia Specialty Cellulose

Bignardi

Bonet

Celulose Irani

Celulose Riograndense

Cenibra

Cocelpa

Copapa

Eldorado

Facepa

Fibria

Ibema

Iguaçu

International Paper

Grupo Orsa - Jari Celulose

Kimberly-Clark

Klabin

KM Papel

Lwarcel

Manikraft

MD Papéis

Melhoramentos Florestal

Melhoramentos Papéis

Miguel Forte

Mili

Multiverde

Nobrecel

Norske Skog Pisa

OJI Papéis

Papirus

Primo Tedesco

Rigesa

Sanovo

Santa Maria

Santher

Stora Enso

Suzano

SWM

Trombini

Veracel

Viscofan

Vitopel

Albany International Brazil

ArborGen

Carbocloro

Eka Chemicals

Poyry Technologia

29

Rua Olimpíadas, 66 - 9º andar São Paulo – SP - Brazil

CEP 04551-000 Phone: +55 11 3018-7800

Fax: +55 11 3018-7813

www.bracelpa.org.br faleconosco@bracelpa.org.br