Brazilian Pulp And Paper Industry

March 2011

2

Index

15Brazilian Pulp and Paper Production

13Energy Matrix

12Contribution to the Environment

10Rotation And Yield Comparison Softwood Pulp Species

9Rotation And Yield Comparison Hardwood Pulp Species

7Planted Forests Productivity Evolution

6Planted Forests Area in the World

11Forest Area Required for Pulp Mill

14Social Contribution

8Forestry: Brazil, World Benchmark

5Planted Forests by the Brazilian Pulp and Paper Industry

4Main World And Pulp and Paper Producers 2009

3Industry Overview 16Recycled Paper Recovery Rate

27Members Companies

17Recycled Paper

18Paper Apparent Consumption per Capita

26Brazilian Paper Export by Destination

25China Imports by Origin Bleached Hardwood Kraft Pulp

24Brazilian Pulp Export by Destination

23Industry Trade Balance

22Paper Domestic Sales

21Industry Performance

20Agribusiness selected products

19Industry Trade Balance Evolution

3

Industry Overview

Arquivo Celso Foelkel

3

222 companies spread in 539 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: 2.0 million hectares

Exports 2010: US$ 6.8 billion

Trade Balance 2010: US$ 4.9 billion

Taxes: R$ 2.2 billion

Investments: US$ 12 billion in the last 10 years

Jobs: 115 thousand direct jobs (industry 68 thousand, forests 47 thousand)

and 575 thousand indirect jobs

4

Main World and Pulp and Paper Producers 2009

1,000 tons 1,000 tons

1. USA 48,329 1. China 86,391

2. China 20,813 2. USA 71,613

3. Canada 17,079 3. Japan 26,279

4. Brazil * 13,315 4. Germany 20,902

5. Sweden 11,463 5. Canada 12,857

6. Finland 9,003 6. Sweden 10,933

7. Japan 8,506 7. Finland 10,602

8. Russia 7,235 8. South Korea 10,481

9. Indonesia 5,971 9. Brazil * 9,428

10. Chile 5,000 10. Indonesia 9,363

11. India 3,803 11. India 8,693

12. Germany 2,542 12. Italy 8,449

Other 24,898 Other 84,696

TOTAL WORLD 177,957 TOTAL WORLD 370,687

Source: RISI

* Source: Bracelpa

Country Country

PULP PAPER

5

2009 – Planted Forests by thePulp and Paper Industry

233

205

167

268

420

2

172

155

527

46

1

49

12

1,000 hectares

Brasil: 2.2 million de hectares

6

Planted Forests Area in the World

1,000 hectares

CountryCountry

Total Area

Planted

Forests Area (¹)%

Japan 37,780 10,000 26.5

India 328,726 32,600 9.9

Portugal 9,191 800 8.7

China 959,696 45,000 4.7

Indonesia 205,000 9,000 4.4

Spain 50,599 1,900 3.8

Chile 75,609 2,200 2.9

United States 937,261 16,000 1.7

Brazil (²) 851,488 6,782 0.8

Pulp & Paper (³) 2,250 0.3

(¹)Source: FAO/Bracelpa(²)Source: ABRAF(³)Source: Bracelpa 2009

7

Planted ForestsProductivity Evolution

Species 1980 2009Growth

Rate

• Eucalyptus 24 44 83%

• Pinus 19 38 100%

WOOD FOR PULP PRODUCTION

Productivity (m3/ha/year)

REASONS FOR HIGH PRODUCTIVITY LEVELS

Climate and soil

Research

Organized private sector

High qualified labor force

TECHNOLOGICAL ADVANCES

Genetics

Biotechnology

High quality raw material

Socio-environmental planning

Sustainable Forest Management

Rotation

8

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

Source: Pöyry* Fonte: Bracelpa

44

25

20

25

70

35

30

30

0 10 20 30 40 50 60 70

Chile

(eucalyptus)

Indonesia

(acacia)

Uruguay

(eucalyptus)

Brazil

(eucalyptus) *

Potential

Actual

Forestry: Brazil, World Benchmark

9

Rotation and Yield ComparisonHardwood 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 ComparisonSoftwood 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 a1,0 million tons/year Admit Pulp Mill

Source: Pöyry

Brazil

100,000

Iberian

Peninsula

300,000

Scandinavia

720,000

12

Contribution to the Environment bythe 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

1970-2009 – Energy Matrix of thePulp and Paper Industry

Source: Brazilian National Energy Balance

* Sub Product (Firewood)

18

33

4752

61 65 6528

15

27 21

1919 19

4548

18 19 107 6

7 8104 5 3 3 2 2

85

0%

20%

40%

60%

80%

100%

1970 1980 1990 2000 2005 2008 2009

Other Black Licor* Firewood Natural Gas Fuel Oil

2

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 : 27,651 properties

in 425 thousand hectares

15

Brazilian Pulp and Paper Production

0

2

4

6

8

10

12

14

16M

illio

n t

on

s

Pulp 0.8 3.1 4.4 12.0 12.7 13.3 14.1

Paper 1.1 3.4 4.7 9.0 9.4 9.4 9.8

1970 1980 1990 2007 2008 2009 2010

Annual Growth Average

Pulp 7.4%

Paper 5.6%

16

Recycled Paper Recovery Rate

36,5%

34,6%

38,3%

46,0%

0

1,500

3,000

4,500

6,000

7,500

9,000

1990 1995 2000 2009

tons

Paper Apparent Consumption Recovered Paper Consumption Recovery Rate %

17

2009 - Recycled Paper

* Volume of recovered paper in the country divided by

paper apparent consumption

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%

Brazil ** 46.0%

Argentina 45.8%

China 40.0%

Russia 36.4%

India 25.9%

Recovery Rate *

Source: RISI

** Source Bracelpa

18

Paper Apparent ConsumptionPer Capita

SELECTED COUNTRIES

kg per capita

339,1

263,3

248,9

242,1

211,4

191,7

184,5

166,9

81,0

60,4

60,4

44,2

Finland

USA

Germany

Japan

Canada

Ita ly

United Kingdom

France

Chi le

Mexico

Argentina

Brazi l *

World Average

57.5 kg per capita

Source: RISI

*Source: Bracelpa

19

Industry Trade Balance Evolution1990-2000

Source: SECEX

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

Export Import Balance

US

$ M

illio

n

20

Agribusiness Selected ProductsExports x Planted Area in 2009

PRODUCTSEXPORTS

US$ million

PLANTED AREA

thousand haUS$ / ha

Soy Complex 17,240 22,194 777

Sugar + Alcohol (*) 9,716 8,650 1,123

Pulp & Paper 5,001 2,250 2,223

Coffee (*) 4,279 2,110 2,028

Corn 1,390 13,587 102

Cotton 845 1,044 809

Source: MAPA/CONAB/IBGE/BRACELPA/SECEX

(*) harvested area

21

Industry Perfomance1,000 tons

(¹) Source: SECEX

(²) Preliminary data

2010 2011 (2) %

.Production 13,315 14,064 5.6 1,215 1,222 0.6

.Import (1)

359 412 14.8 33 29 -12.1

.Export (1)

8,229 8,375 1.8 619 677 9.4

.Apparent Consumption 5,445 6,101 12.0 629 574 -8.7

2010 2011 (2) %

.Production 9,428 9,792 3.9 828 800 -3.4

.Import (1)

1,085 1,502 38.4 116 138 19.0

.Export (1) 2,008 2,074 3.3 178 172 -3.4

.Apparent Consumption 8,505 9,220 8.4 766 766 0.0

2010

2010PAPER

PULP 2009

2009 %

Jan

Jan

%

22

Paper Domestic Sales1,000 tons

300

330

360

390

420

450

480

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

2010 2011

-1.2

%

380

385

390

395

400

405

410

Jan/2010 Jan/2011*

* Preliminary data

23

Industry Trade Balance US$ Million FOB

2010 2011 ** %

EXPORT * 5,001 6,770 35.4 473 571 20.7

.Pulp 3,315 4,762 43.7 319 402 26.0

.Paper 1,686 2,008 19.1 154 169 9.7

IMPORT * 1,339 1,900 41.9 130 176 35.4

.Pulp 242 360 48.8 23 27 17.4

.Paper 1,097 1,540 40.4 107 149 39.3

BALANCE 3,662 4,870 33.0 343 395 15.2

.Pulp 3,073 4,402 43.2 296 375 26.7

.Paper 589 468 -20.5 47 20 -57.4

2009 %Jan

2010

* Source: SECEX

** Preliminary data

24

Brazilian Pulp Export by Destination

Jan/2010 Jan/2011

Source: SECEX

Europe

46%

North

America

18%

China

24%

Africa

0%

Latin

America

0%

Asia &

Oceania

12%

US$ 319 Million

China

31%

Asia &

Oceania

13%

Latin

America

3%

North

America

14%

Africa

0%

Europe

39%

US$ 402 Million

25

China – Imports By OriginBleached Hardwood Kraft Pulp

Arq./Fibria

Suzano/Ricardo Teles

Arq./Cenibra

24

Europe Asia Brazil Other Other America

Source: SVEN DATA

By Region of OriginUS$ millions1.000 t

1,4061,240

1,720

1,168

2,433

1,765

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2009 2010

-27 %

-32 %

-12 %

Var.

10/09

625869

785

830

1,054

1,233

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2009 2010

17 %

6 %

39 %

Var.

10/09

26

Brazilian Paper Export by Destination

BSC / Gleison Rodrigues

BSC / Gleison Rodrigues

25

Jan/2010 Jan/2011

Source: SECEX

Latin

America

49%

Europe

23%

North

America

9%

China

3%

Asia &

Oceania

8%Africa

8%

US$ 154 Million

North

America

8%

Africa

6%

Latin

America

57%

Europe

18%

China

5%Asia &

Oceania

6%

US$ 169 Million

27

Members Companies

Lwarcel CeluloseAdami S/A Madeiras

MD Papéis Ltda.Arjo Wiggins Ltda.

Melhoramentos Florestal S/A.Bahia Specialty Cellulose

Melhoramentos Papéis.Bignardi Ind. e Com. de Papéis e Artefatos Ltda.

Miguel Forte Industrial S/A Papéis e MadeiraBonet Madeiras e Papéis Ltda.

Mili S/ACelulose Irani S/A

Nobrecel S/A - Celulose e PapelCelulose Riograndense

Norske Skog Pisa Ltda.Celulose Nipo-Brasileira S/A - Cenibra

Papirus Indústria de Papel S/ACocelpa - Cia. de Celulose e Papel do Paraná

Primo Tedesco S/ACopapa - Cia. Paduana de Papéis

Rigesa Celulose, Papel e Embalagens Ltda.Facepa - Fábrica de Papel da Amazônia S/A

Santa Maria Cia. de Papel e CeluloseFibria Celulose S/A

Santher - Fábrica de Papel Santa Therezinha S/AIbema - Cia. Brasileira de Papel

Stora Enso Arapoti Indústria de Papel Ltda.Iguaçu Celulose e Papel S/A

Suzano Papel e CeluloseInternational Paper do Brasil Ltda.

SWMJari Celulose S/A

Trombini Industrial S/AKimberly-Clark Brasil Ind. Com. de Produtos de Higiene Ltda.

Veracel Celulose S/A

Viscofan do Brasil Sociedade Comercial e Industrial Ltda.Klabin S/A

KM Indústria e Comércio de Papel Ltda.

Eka Chemicals do Brasil S/A

Poyry Tecnologia Ltda

Albany International Tecidos Técnicos Ltda

Carbocloro S/A Indústrias Químicas

Fellow Members

Manufacturing Members

28

Rua Olimpíadas, 66 - 9º andar

São Paulo – SP - Brazil

CEP 04551-000

Fone: 11 3018-7800

Fax: 11 3018-7813

www.bracelpa.org.br

faleconosco@bracelpa.org.br