This Week. Depreciated Real lifts Brazilian containerboard exports; paper, packaging suppliers seek hikes

Transcription

1 Paper, Packaging and Fiber Market News and Prices for Latin America Feb. 18, 2014 Vol. 10, No. 07 Latin American Plantation Forests: Outlook for Timber Supply and Markets With a forest ownership database of 300 entries, detailing how much planted forest each company owns across 21 countries FINES OF UP TO $150,000 FOR COPYING THIS PUBLICATION Regular copying or other redistribution of this publication -- in whole or in part -- violates US copyright law, and is punishable by statutory damages of up to $150,000, plus attorney's fees (17 USC 504 et seq.). Illegal copying includes regular photocopying, faxing, excerpting, and sharing of online access. Discounts are available for groups of five or more new subscribers from the same company. Contact us at copyright@risi.com. for more information. For general subscription and other inquiries, info@risi.com. This Week US suppliers raise recovered paper prices to Mexico 4 Oji Brazil invests $6.3M to revamp thermal paper mill 4 Jari says dissolving pulp mill startup is delayed 5 Fibria takes scheduled downtime at Aracruz 5 Depreciated Real lifts Brazilian containerboard exports; paper, packaging suppliers seek hikes The Brazilian Real currency depreciation against the US dollar has been encouraging local packaging paper producers to increase their export volumes. According to data from the Brazilian pulp and paper assn (Bracelpa), the country's total packaging paper exports rose by 63.6% to 54,000 tonnes in December 2013 over December 2012, with volumes for full year 2013 hitting 619,000 tonnes or 22.8% higher than a year ago. Klabin, the largest supplier in the country, is one of those which are directing more paper to overseas markets aiming to improve the company's financial performance. "Since the exchange rate has improved, we have been accelerating the company's exports, and this already happened in the fourth quarter and is clearly happening in this first quarter of 2014," said Klabin's CEO Fabio Schvartsman. "Due to our paper capacity limitation, we have been buying paper in the domestic market especially recycled containerboard to feed our corrugated packaging plants and thus having more kraftliner available for exports, which obviously is improving our results," the executive added. On Dec. 31, the currency exchange rate was at $1/Real 2.34 and on Feb. 14 it was at $1/ Real 2.41 compared to $1/Real 1.96 on Feb. 14, 2013, representing a 23% depreciation of the Brazilian currency against the US dollar in the period. "The currency depreciation trend observed in the first nine months of last year continued in the fourth quarter, improving Brazilian products' competitiveness as a whole in exports and inhibiting end product imports into our market," stated Klabin's CFO Sergio Alfano. "In this scenario strong domestic market and higher revenues from exports due to good prices in dollar terms as well as the appreciated dollar Klabin once again has benefited from its business diversification and flexibility, maintaining >>> continued on page 2 Klabin gets 80% of equipment needed for new pulp mill; sales volume hit 1.8 million tonnes in 2013 Brazil's largest packaging paper producer, Klabin, has released its 2013 financial figures and detailed its recent investments to increase packaging paper capacity and the Puma project, the first market pulp mill investment carried out by the company. According to Klabin's CEO, Fabio Schvarstman, negotiations with equipment suppliers are advanced and about 80% of the machinery needed for the 1.5 million tonnes/yr bleached and hardwood kraft pulp mill are already hired. The executive said that the company is prioritizing local suppliers in order to keep investments in Brazil and reduce the project's exposure to currency variations. "This way we are not worried about currency effects in our investments, since only 20% of our deals are in foreign currency," Schvartsman stated on a conference call with analysts last week. Klabin didn't disclose yet what supplier will be responsible for building the pulp mill, which will be installed at Ortigueira city, Paraná state, southern Brazil, but PPI Latin America has learned that the company decided to divide the main equipment supply among five providers. "The remaining deals will be closed within the next coming weeks; we are following the schedule and budget previously announced," Schvarstman said. The mill is expected to kick off in March Paper investments. In 2013, the company's investments totaled Real 899 million ($380 million), of which Real 381 million went to paper capacity expansion projects including one new sack kraft paper machine (PM) and one recycled containerboard PM. The remaining was invested in maintenance activities (Real 283 million), the Puma project (Real 99 million), forestry (Real 86 million) and special projects (Real 51 million). >>> continued on page 3

2 Depreciated Real lifts Brazilian paper exports PACKAGING PAPER MARKET - BRAZIL (000 tonnes) Dec /12 Jan.-Dec /12 Production % 5, % Domestic sales % 1, % Exports % % Imports 4 0.0% % Apparent consumption % 4, % Source: Bracelpa. Note: The figures are subject to revision. <<< continued from page 1 strong sales volume both in the domestic market and abroad, ending the year 2013 with a record EBITDA," the CFO concluded. Klabin's 2013 kraftliner revenues at Real 598 million were 13% higher than 2012, driven by higher export prices and the depreciated Real currency. In terms of volume, Klabin increased kraftliner exports by 4% to 220,000 tonnes in 2013 over 2012 while it reduced kraftliner domestic sales by 10% to 157,000 tonnes. In the fourth quarter, the company exported 75,000 tonnes of kraftliner, a volume 47% higher than the same period of 2012, while its domestic sales dropped by 17% to 41,000 tonnes. Also, Klabin's converted packaging sales including corrugated boxes and industrial bags increased by 9% in 2013 to 693,000 tonnes from 638,000 tonnes in 2012, with revenues growing by 13% to Real 2 billion. "Our target is not related to market share. What we are doing at this moment buying more recycled paper from third-party suppliers in order to sell more of our kraftliner overseas doesn't impact our products' supply [especially converted packaging] in the domestic market," Schvartsman explained. "Klabin always does this buys paper in the domestic market to be able to export more kraftliner when the exchange rate is favorable which is also a way to adjust the domestic market. We have been hearing that they are full of orders at this start of the year," a market source told PPI Latin America, adding that there are rumors of a possible price increase on kraftliner in Brazil from March. Another source also commented of a kraftliner price increase planned by suppliers from March which would be partially influenced by a lower supply condition: "The prices are likely to be adjusted by 6-7% as producers have to pass on costs and also due to market adjustment reasons (supply x demand). The supply is not really lower now; I would say there is a 'lacking balance' in the kraftliner market due to the exchange rate, which favors exports, and also because some integrated paper suppliers are reducing kraftliner sales in order to feed their new packaging capacities." MWV Rigesa's business director Jairo Lorenzatto also mentioned in a recent interview to PPI Latin America that kraftliner prices may increase this year. "Rigesa is implementing a 5.5% price increase on fluting papers in January, due to the increasing recovered paper costs. Also, we see conditions for kraftliner being adjusted in the coming months too." Another big player in Brazil, Orsa International Paper, is also aiming to increase prices in the country. During International Paper's 2013 financial results call held in the beginning of February, CFO and senior VP Carol L. Roberts mentioned that the company is adjusting packaging paper and corrugated board prices in Brazil, effective in March. According to PPI Latin America's survey, prices for kraftliner are unchanged in February over January at Real 1,665-1,715/tonne, 4.3% higher over a year ago. Testliner is being negotiated for Real 1,400-1,460/tonne and is 6.3% higher than a year ago. As for fluting, prices are maintaining at Real 1,280-1,345/tonne, but are already 18.8% higher than in February "If kraftliner prices really go up, then testliner will be adjusted too and it is possible that fluting and recycled testliner prices increase as well," a contact said. "Recycled paper fluting and testliner may be adjusted between March and May. The reason is costs and market adjustment the market is well balanced at the moment, I mean, there is no excess paper. So the ones which don't have inventories or a good partnership with their suppliers may find it difficult to buy paper in the coming months," another source stated. According to a buyer, prices for fluting didn't change in January and February, but "There is expectation of an adjustment in March," which has been already informed by one of their suppliers. A supplier commented that, as recovered paper prices are now stable, his company hasn't adjusted recycled paper prices. "As for kraftliner, we are watching the market behavior and possibly will announce a price increase for March or April," the source said, adding that January was a good month for paper sales PRICE WATCH: PACKAGING PAPER - BRAZIL Prices are net (FOB mill) in Brazilian Real per tonne Feb Jan Dec Feb /13 Containerboard Kraftliner g/m 2 * 1,665-1,715 1,665 1,715 1,665-1,715 1,600-1, % White top liner g/m 2 1,890-1,950 1,890-1,950 1,890-1,950 1,820-1, % Fluting 120 g/m 2 1,280-1,345 1,280-1,345 1,280-1,345 1,080-1, % Testliner g/m 2 * 1,400-1,460 1,400-1,460 1,400-1,460 1,300-1, % Sack kraft Unbleached extensible g/m 2 2,050-2,200 2,050-2,200 2,050-2,200 1,900-2, % Source: PPI Latin America. Notes: Prices reflect most transactions in the month and are subject to changes by the end of the month. Kraftliner is mostly made of virgin fiber; WTL includes both virgin fiber based and recycled; testliner is mostly recycled; fluting is mostly recycled, but also includes paper made of semichemical and mechanical pulp. *Prices have been revised. DISCLAIMER: While the information in the price indices has been obtained from sources believed to be reliable, RISI does not warrant or guarantee the accuracy and completeness of the information. Actual transaction prices may vary. 2

3 CORRUGATED BOARD SALES - BRAZIL (tonnes) /13 January 278, , % Source: ABPO Note: The figures are subject to revision. "A little bit better than December" and February has been very similar to January. Another contact stated that the containerboard market, as well as the corrugated board market, is very demanded at this moment. "There is possibility of delivery delays," the source said. A few contacts complained about paper sales in the beginning of the year, saying they are lower than last year. "Demand for paper is weak January was weak and February is weak too. I think this is because buyers were holding high inventories in December and now decided to reduce purchases and consume their inventories," a seller said. According to Bracelpa's statistics, packaging paper domestic sales increased 4.7% to 156,000 tonnes in December 2013 over the same month of 2012 while production rose 2.1% to 447,000 tonnes. The association hasn't yet released the January statistics. As for kraft papers [extensible and non extensible], PPI Latin America contacts stated that prices have been experiencing adjustments in the Brazilian market. "We are increasing prices by 6-10% in this first quarter, and we know the market in general talks about a 6-12% increase in February-April," a supplier said. "We are in a campaign to raise prices on low basis weight papers between March and May," another supplier stated. Converted packaging. As announced by Klabin and Irani in the beginning of January, and by International Paper in the beginning of February, the companies are separately attempting a price increase on corrugated board in the Brazilian market. Other sources which talked to PPI Latin America stated that several corrugated board suppliers intend to adjust prices by 10-12% in the first quarter, in order to recover their margins which were impacted by higher fiber costs especially recovered paper last year. "In fact, recovered paper prices are pressured, as well as electricity and exchange rate. The producers which are more dependent on those inputs suffer a bigger pressure on costs and this may be reflected in a price increase," Klabin's CEO Schvartsman commented. "It is feasible that the corrugated packaging suppliers anticipate the annual price adjustment of around 10% to this first quarter of the year in order to pass on costs," a market contact said, adding that sales volumes are good and recovered paper prices continue high. "Recovered paper prices are stable, at high levels, and may be adjusted a little bit further in the coming months." A corrugated packaging supplier stated that "As this is a price adjustment which is happening during a low season of sales [different from other years when suppliers adjust prices in the second half], its implementation is a little bit harder and slower. We believe that the price adjustment will be completed by May." According to preliminary data from the Brazilian corrugated board assn (ABPO), shipments in January hit 278,259 tonnes, or 1.8% higher than January ABPO expects a 3-4% volume increase in 2014; in 2012 Brazilian corrugated board sales grew by 3% over 2012 reaching 3.4 million tonnes. Sources stated that February should end with a higher than expected volume of sales. "The second half of the month should be stronger, since buyers may want to anticipate orders to guarantee the prices before the adjustment," a contact said. Another source stated that "It is feasible that we see more orders for corrugated board this month, due to the price increase announced for March but then March will be weaker, also because we have fewer working days due to the Carnival holidays". By Renata Mercante, Editor, PPI Latin America, rmercante@risi.com Klabin s sales volume hit 1.8 million tonnes in 2013 <<< continued from page 1 On Nov. 12, the new 80,000 tonnes/yr sack kraft PM #23 began operations at the Correia Pinto unit, in Santa Catarina state, southern Brazil, producing its first jumbo roll. According to Klabin, the ramp up was considered a success with a better than expected performance. "At this moment with the Real currency accumulating depreciation the sack kraft exports become not only viable, but also very profitable for Klabin. We are taking advantage of our capacity to sell this product in other markets as we don't expect a sharp growth for the Brazilian domestic construction sector," Schvarstman detailed. In Goiana, Pernambuco state, northeast Brazil, Klabin has also concluded the foundations of the new recycled PM, with the project remaining on schedule and within budget. The company is installing an 110,000 tonnes/yr recycled containerboard PM which is expected to start up in October of this year. Klabin also included in its 2014's Capex another 60,000 tonnes/yr of kraftliner and fluting new capacity to be added to the Piracicaba and Angatuba mills, both located in São Paulo state, southeast Brazil. Besides that, it is investing Real 100 million to increase its boxboard output by 50,000 tonnes/yr on the PM #9 at the Monte Alegre mill, in Paraná state. The debottlenecking process will be completed during a 17-day downtime to be taken in May. Sales. Schvarstman stated that the company is "very satisfied" with the financial results obtained in 2013, when the company recorded a sales volume of 1.8 million tonnes, 4% more than In the fourth quarter, sales hit 476,000 tonnes, a 9% increase year-over-year, fueled by higher kraftliner exports. "We have been working hard to reduce our costs and giving special attention to our products' mix. We started up our new sack kraft PM and the company is very flexible, so since the Real currency depreciated we are increasing profitability by means of purchasing recycled containerboard in the domestic market and releasing kraftliner output for exports, which is more profitable," the CEO explained. The company's financial results also show that net income declined 85% in the fourth quarter to Real 22 million in the fourth quarter of Klabin explained to PPI Latin America that the reduction was a result of a Real 193 million currency negative accounting effect. The company's net revenues, though, increased 14.7% to KLABIN FINANCIAL RESULTS (Real million) 4Q / /13 Revenues 1, % 4, % Adjusted EBITDA % 1, % Net income (loss) % % Source: Klabin. 3

4 Real 1.23 billion in the last three months of 2013 due to more favorable international market conditions, which fueled exports, the more profitable product mix and the increase in paper sales volume. The financial result report also shows that Klabin's adjusted EBITDA grew 15.1% in the fourth quarter to Real 442 million, while net debt rose by 22% to Real 3.98 billion. The figures supported a leverage increase to 2.6x, from the 2.4x level recorded in October-December "In 2014, our forecast is to reach again a double digit growth and what I can read from the first two months of the year is that this is really the trend," Schvarstman added. The company commented that its efforts to reduce costs led to expressive results in the forestry unit. In this scenario, the upturn in the unit cash cost continued to lag the increase in Brazilian inflation, despite pressure from the exchange rate and recovered paper prices in the country. As a result, Klabin achieved sustainable cash flow growth in the fourth quarter, culminating in the tenth consecutive quarterly upturn in adjusted EBITDA, which reached the record level of Real 1.56 billion in the year, 16% up over 2012, accompanied by a margin of 34%. By Marina Faleiros, News Editor, PPI Latin America, mfaleiros@risi.com US suppliers raise recovered paper prices shipped to Mexico Prices for some US recovered paper grades in Mexico have increased this month. One of the most consumed materials, old corrugated containers (OCC), saw a $10/ton increase from January to February and is now being negotiated at $ /ton ($ /tonne), FOB, at the Laredo border. Sorted white ledger rose by $20-30/ton to $ /ton ($ /tonne), hard white envelope cuttings was adjusted by $10/ton to $ /ton ($ /tonne) and sorted office paper increased $20/ton to $155/ton ($170/ tonne) as on Feb. 5. According to market sources, the price increases are related to weather issues, which made rail car availability difficult for shipping to Mexico. Also, on sorted office paper, contacts added that Kimberly- Clark de Mexico was looking for more volumes and faced difficulties in obtaining material because of rail and weather. Prices for US old newsprint remain at $70/ton ($77/tonne) in the Mexican market this month, as well as coated groundwood sections at $100/ton ($110/tonne). Data from the Global Trade Information Service (GTIS) shows that Mexico imported a total of 1.05 million tonnes of recovered paper from the USA in 2013, a flat volume compared to Os this total, 492,200 tonnes were high grades, an 8.7% increase over the previous year, while OCC volume climbed 26.6% to 331,600 tonnes. Oji Paper invests $6.3M to increase thermal paper capacity, exports in LA US RECOVERED PAPER EXPORTS TO MEXICO (tonnes) Jan.-Dec Jan.Dec /12 Total 1,053,000 1,049, % OCC 331, , % Mixed paper 93, , % ONP 136, , % High grades 492, , % Source: GTIS. Oji is expanding thermal paper capacity by 20% at Piracicaba Oji Paper's operation in Brazil has been proving its flexibility throughout the years, in order to keep its two paper machines (PM)s occupied and adjust production to new market demand. From an important local printing/writing (P/W) paper producer, the company has become one of the main specialty paper producers in Brazil. In 2014, it plans to invest Real 15 million ($6.3 million) to revamp two coaters and increase its thermal paper capacity by 20% to 62,000 tonnes/yr at the Piracicaba mill, in São Paulo state. In February, the first coater has been already renewed and in March the second will be running with new capacity. According to Oji's CEO in Brazil, Gilberto Júlio Piatto, the strategy is to boost exports to other Latin American countries and defeat global players that are increasing sales in the region. "If you don't protect your business you are absorbed by competitors. We didn't have capacity to export before, as we were attending 80% of Brazil's thermal paper market," Piatto told PPI Latin America. Piatto commented that like Oji many other companies are also shifting their production lines from coated woodfree (CWF) paper to specialty. As commonly known, the continuous decrease of P/W paper consumption in mature markets is pressuring those changes. "Many companies with idled capacities had to search niches to keep producing. One example of these changes is Korean Hansol, which has been upgrading mills to produce thermal paper." Producers from Korea, the USA and Germany are selling significant volumes to South America, a market aimed by Oji due to the proximity to its Brazilian mill and tax advantages, especially regarding Mercosul countries. The company expects to export 10% of its thermal paper capacity to countries such as Uruguay, Argentina, Chile, Bolivia, Peru, Venezuela, Colombia and Ecuador in the upcoming years. "Our perspective in the future is to have 20% of the regional market share," Piatto added. On another front, the company is still producing carbonless paper, having 4

5 30,000 tonnes/yr capacity of this grade. In the past five years, though, the increasing use of electronic payment and billing devices in Brazil has reduced Oji's domestic sales of this product from 48,000 tonnes in 2008 to 15,000 tonnes in "At the moment we already export 50% of our production in this segment and in 2014 sales to other countries will be higher than the carbonless consumption in Brazil. We know this is still a growing segment in other countries in Latin America, but as happened in Brazil, the payment processing technology will advance and buyers in those markets will be our future thermal paper consumers," Piatto detailed. The CEO also revealed that after the revamps in Oji Brazil's existing coaters, the mill can expand output only by acquiring a new equipment. "This is a plan to be carried out in about five years, doubling our capacity to 100,000 tonnes/yr of thermal paper. We forecast that demand in the region will continue to grow, so the project is viable." By Marina Faleiros, News Editor, PPI Latin America, mfaleiros@risi.com Suzano names Aníbal pulp business director Brazilian pulp and paper producer Suzano last week completed changes in its management team. The company's paper unit director, Carlos Aníbal, will now also head the pulp business unit. The former pulp unit head Alexandre Yambanis is leaving Suzano. PPI Latin America has learned that Aníbal will be responsible for both pulp and paper business units and will follow the same policy as Yambanis. Suzano currently has capacity to produce 1.3 million tonnes/yr of paper, including uncoated woodfree, coated woodfree and boxboard. The company also has a combined output of 3.4 million tonnes/ yr of bleached eucalyptus kraft (BEK) pulp. On Dec. 30, 2013, Suzano kicked off its Imperatriz mill, with capacity to produce 1.5 million tonnes/yr of BEK market pulp. Jari's dissolving pulp mill startup delayed Brazilian Jari Celulose confirmed to PPI Latin America that the company's revamp project to convert its old 410,000 tonnes/ yr bleached eucalyptus kraft (BEK) pulp plant into a 245,000 tonnes/yr dissolving pulp mill is delayed. The company previously projected to kick off new production at the Monte Dourado pulp mill, located in Pará state, northern Brazil, in March this year. The company didn't disclose further details of the project schedule or when exactly it expects the mill to resume operations. The Monte Dourado mill was idled in January 2013 and is receiving a Real 450 million ($188 million) investment to complete the industrial modifications needed. In 2013, Jari stated it aimed to increase the unit's capacity to 300,000 tonnes/yr, which could happen in three years after the startup, when the required forests would be ready for harvesting. Fibria takes scheduled downtime at Aracruz Brazil's largest pulp producer Fibria on Feb. 9 started annual downtime at its 2.3 million tonnes/yr bleached eucalyptus kraft (BEK) pulp mill in Aracruz, Espírito Santo state, southeast Brazil. The operation is expected to idle the mill's "C" line through Feb. 19. During the 10-day downtime period, over 1,750 employees from 85 different companies will be conducting preventive maintenance procedures aimed at securing the plant's equipment integrity and efficiency. Among the activities involved in the downtime is the replacement of the log table from the mill's production line #8. According to Fibria's engineering and project coordinator, Adilan Rodrigues Bittar, the equipment was manufactured in Curitiba, Paraná state, and its setup is expected to improve eucalyptus log supply to the mill. The log table's assembly will be performed between Feb by the local company Imetame's team of 144 workers. Fibria's Aracruz mill has three fiberlines "A", "B" and "C". The fiberline "C" has a capacity of around 1 million tonnes/ yr of BEK pulp. Misionero starts up biomass power plant Argentinean packaging paper producer Papel Misionero has started up a new cogeneration power plant at its 105,000 tonnes/yr paper mill in Puerto Mineral, in the province of Misiones. "The cogeneration plant provides us with the possibility of being 100% self sufficient in power, through a clean development mechanism technology," Papel Misionero's controlling group, Grupo Zucamor, stated on its website. The biomass fueled power plant project suffered a setback last June, when a fire broke out and affected the site's cooling towers. The fire, however, didn't reach the company's paper production area. Chemicals supplier Ecotech expands Brazilian specialty chemicals supplier Ecotech group finalized in February the expansion of its research and development (R&D) center in Valinhos city, São Paulo state, under a Real 140,000 ($59,000) investment, which resulted in a 35% enlargement of its facilities. "The expansion started last May, with renovations in the building's infrastructure and the purchase of new laboratory equipment. This was carried out mainly due to a demand increase in the lab's activities. We actually have ended up assembling a whole new lab to help deal with the growth demand," Ecotech's R&D manager, Carla Veríssimo, explained. With the new structure in place, according to Veríssimo, the company expects to boost the number of projects developed for the pulp and paper sector, as well as increase the range of services provided, offering a larger portfolio. Throughout 2013, Ecotech also invested Real 450,000 in a pilot plant, used to develop environmental projects, mainly those involving water treatment processes. "The quest for efficiency increase is a hot button issue. We have also been developing antifoaming chemicals and cooking adjuvant for pulp production," Veríssimo said. Since it first started operating in 2005, the company's R&D lab received approximately Real 14 million in investments aimed at increasing productivity, acquiring new equipment and registering patents on new substances developed. FSC stamp spreads among consumers One in five consumers around the world recognizes the Forest Stewardship Council (FSC) stamp, according to a survey recently conducted by food and beverage packaging major supplier Tetra Pak. Over 7,000 people in 13 countries were interviewed for the study, including food and beverage industry representatives and government employees. In the case of Brazil, 90% of industry participants and 23% of consumers can identify the FSC stamp and are aware of its meaning. "The Brazilian's interest in consuming healthy products, such as organic food, is already known. The most recent challenge was to expand this awareness over from the individual to the collective benefit, which is the result of a sustainable forest management," FSC's executive secretary, Fabíola Zerbini, commented. According to FSC, Brazil currently holds fifth position in the ranking of countries with the largest forest certified areas, with a total of 7.8 million ha. Despite the positive result, however, the country's figures are far from the ranking's top two 5

6 members: Canada, with its 54 million ha, and Russia, with a total of 38.7 million ha. In terms of custody chain certification, Brazil occupies the ninth position, with a total of 1,022 certificates, while the list is topped by China, with 3,345, the USA, with 3,231, and the UK, with 2,341. As stated by Zerbini, it is the market demand for certified products that drives companies into taking the necessary steps for obtaining the stamp. "If there's demand, or even if the certification becomes a pre condition, such as in the case of the pulp and paper market, the company will pursue the certification and easily absorb the social, environmental and logistical costs which may incur," Zerbini stated. Market demand was responsible for the boost in certifications in Brazil, which started in 2004, when pulp and paper companies increased the search for certifications. This, according to Zerbini, was mainly due to the multinational customers which began considering the certification as criteria in their purchase policies. In order to boost the numbers it would be necessary to establish partnerships with other sectors of the economy, such as the civil construction business, as well as conduct campaigns combating the use of illegal lumber and increasing the small producers' access to the FSC certification process. To do so, pulp and paper companies are taking part in initiatives alongside FSC and the World Wide Fund for Nature (WWF). "Small producers as of yet don't represent a significant part of the Brazilian certified land, but several projects are being developed to change this. Between 2012 and 2013, a plan was developed with five pulp and paper companies and resulted in a specific standard for small producers, which is more flexible and adapted to their needs," Zerbini said. Copyright 2014 by RISI, Inc. All rights reserved. Reproduction in any form whatsoever is forbidden without express permission of the copyright owner. Editorial Staff Renata Mercante, Editor, recovered paper, packaging (Brazil and Mexico)...rmercante@risi.com; Marina Faleiros, News Editor, pulp, printing/writing (Brazil and Mexico), boxboard (Brazil)...mfaleiros@risi.com; Fernando Gonzalez, Associate Editor...fgonzalez@risi.com; Chris Cook, Executive Editor... ccook@risi.com; Will Mies, Editorial Director, North American News...wmies@risi.com; Contributing Editors Will Mies, Chris Cook, Greg Rudder and Bryan Smith (San Francisco), Steven Sachoff (Brussels) and Nick Chang (Singapore). Subscriptions and customer service Call (Brazil), (Belgium) or (US); info@risi.com; or visit Executives Mike Coffey...Chief Executive Officer Matt Graves...Senior Vice President Todd Petracek...Vice President, Pulp & Paper, News, Markets & Prices 6

7 Which countries in Latin America offer the best plantation forestry investment opportunities? Find out in Latin American Plantation Forests: Outlook for Timber Supply and Markets, including: Forest ownership database of 300 entries, detailing how much planted forest each company owns across 21 countries Trends in planted area and species most commonly planted in each country Availability of financial incentives for plantation development Area of FSC and PEFC certified forest by country Analysis of tree farm ownership structure and the key players Timber production trends and outlook for future supply/demand trends by country