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Technology and innovation in developing packaging papers.

Klabin is pioneer and leader in the production of packaging paper in Latin America. All Klabin’s paper and board mills have been awarded the chain of custody seal by the FSC (Forest Stewardship Council).

Currently, the company has 6% of the internationally-traded kraftliner market. Klabin kraftliner is responsible for inter-company supply of the company’s nine boxplants, and is also sold to boxplants in over 60 countries.

Klabin cartonboard is made with a mix of short (eucalyptus) and long (pine) fibers which confer strength to the package, as well as excellent printability. The cartonboard sector is a reflection of Klabin’s high technology, focused on higher added-value products, to meet the demands of the most demanding customers.

Production capacity increase for packaging papers

Approved in January 2006 by Klabin’s Board of Directors, Project MA-1100 is intended to raise the Monte Alegre mill’s capacity in Telemaco Borba, Parana, from 700 thousand tons/year to 1.1 million tons/year – increasing the company’s total cartonboard production from 340 thousand to 740 thousand tons/year. The Preliminary License and the Installation License have already been approved, which means that all environmental prerequisites have been met at the beginning of construction.

Included in part of this new project is the acquisition of a new state-of-the-art paper machine, the installation of a new eucalyptus pulp line (CMTP process), the biggest in Brazil, and the implementation of a new biofuel-based plant to co-generate steam and electricity, including a new biofuel boiler, with 250 tons/hour of steam capacity, working at 5000 º C and 100 bar pressure, which will become the most efficient co-generation plant of the Pulp and Paper sector in Brazil, with this configuration. Besides raising capacity with this project, Klabin intends to increase the use of eucalyptus in the production process, leading to more competitive boards in international markets, both in quality and in cost.

The company will invest about R$ 2.2 billion in this expansion. The Monte Alegre Unit, which is already the largest paper mill in Brazil, will rank among the ten biggest mills in the world, and Klabin will become one of the six leading global manufacturers of virgin-fiber cartonboard.

Klabin boards already bring innovation to the marketplace because of their combination of long (pine) and short (eucalyptus) fibers, with their comparative advantages, since they incorporate the best properties of both: strength and printability. The principal end-uses for cartonboard are in the sectors of food (milk, milk derivatives, juices, sauces, wines and cold drinks), Beverages (soft drinks and beer), hygiene, cleaning materials and pharmaceuticals.

The main suppliers have already been selected. Important companies are on board with Klabin like, Metso Paper (wood yard, bleaching and coating kitchen), Andritz (CTMP), Voith Paper (MP 09), CBC (Nr. 2 Recovery Boiler), Babcock Power Spain (Power Boiler), Kvaerner (rebuild of digester, evaporation, caustification and new lime kiln), ABB (automation), Siemens/CNEC (Turbo-generator), Centroprojekt (ETE) and Enfil (water treatment for the boilers). The forecast is for the whole expansion project to terminate with the start-up of production at the end of 2007.

The socioenvironmental benefits for the region will be multiple, such as reduction in the specific load of effluents discharged to the Tibagi River, reduction in fuel consumption with the installation of the new biofuel boiler, and consequent reduction of greenhouse gases (GHG), and reduction of both solid residues and water consumption at Klabin and in the Telemaco Borba region. The project is expected to bring approximately 1000 direct jobs, 250 of which in the mill operations and 750 in the forestry area.

During implantation of the project, it is estimated that up to 4.5 thousand jobs will be made available. It is foreseen that R$ 350 million will be paid out in taxes and R$ 13 million per year will be paid in salaries in the region which will give an extra boost to the Forestry Foster and Leasing Programs.

MA–1100 places Klabin in an excellent position in the global market, as a major producer with highly competitive production and distribution costs. Despite all of this, we must never forget our historical commitment to sustainable development and excellence in service to customers.