In an Extraordinary General Assembly and a Special Assembly for Holders of Preferred Stock, held this Thursday, the shareholders of Klabin approved the proposals required to make the capitalization of the company successful for construction of the new pulp mill in Parana, the Puma Project.
Among the issues voted, the most significant was modification of Klabin’s By-laws to meet the requirements of Level 2 regulations by the BM&FBovespa, with higher corporate governance standards. Furthermore, as of now, the preferred stock holders will be able to count on 100% Tag Along. This mechanism will ensure greater alignment between potential investors, shareholders and other stakeholders.
With the decision of both assemblies, Klabin’s Board of Administration approved the issue of debentures to the total amount of R$ 1.7 billion on this same date. Klabin has already signed a contract with investors, moving ahead in the fund-raising process for the construction of the new plant.
“This is the beginning of a new cycle of growth for Klabin, which will enable the company to double its production volume in three years. It is Klabin’s biggest investment in its 115-year history”, points out Fabio Schvartsman, the CEO of Klabin.
The Puma Project will demand total investments of R$5.8 billion, not including forest assets, improvements to infrastructure and taxes. Inauguration of the new plant, installed in the town of Ortigueira (PR), is forecast for the first quarter of 2016.
With the new plant, Klabin’s production capacity will double in three years. The mill will have an annual production capacity of 1.5 million tons, of which 1.1 million tons in short fiber and 400 thousand tons in long fiber, part of which is to be converted into fluff pulp.
Fluff pulp, used mainly in the manufacture of diapers and absorbents, will be to supply the domestic market, which imports this raw material today. The short and long fiber pulp will be principally destined for the export market. The proposed product mix will allow operations to meet market demands by focusing on consumer products, thus incurring less volatility, generating stable cash flow and sales of products with higher margins.
The plant will be self-sufficient in electrical power generation, with the production of 260 MW of energy. Of this total, 110 MW are expected to be consumed by Klabin itself and the remaining 150 MW – enough power to supply a town of half a million inhabitants, like Londrina (PR) – will be offered to the Brazilian electrical grid system.
Of the total of pine and eucalyptus-planted forests, 107 thousand hectares will be dedicated to guaranteeing wood-supply for the new mill. The average radius of forest to plant is 74 km, which means wood transportation is both low-cost and competitive. Part of the production will be shipped by rail to the port of Paranagua.
Klabin, Brazil’s biggest paper manufacturer and exporter, produces packaging paper and board, corrugated boxes, industrial bags and timber in logs. Founded in 1899, today it has 15 industrial plants in Brazil and one in Argentina. It is organized in three business units: Forestry, Paper (cartonboard and kraft paper) and Converting (corrugated board and industrial bags).
Sustainable Development guides the management of the company, in the pursuit of integrated, responsible growth which combines profitability, social development and environmental commitment. Consequently, it is a signatory to the UN Global Compact and looks for suppliers and business partners who adhere to the same ethical values, transparency and respect for the principles of sustainability.
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