Suzano Starts Operation of the World’s Largest Pulp Production Line

Rhea-AI Summary

Suzano, the world's largest market pulp producer, has successfully launched its new mill in Ribas do Rio Pardo, Mato Grosso do Sul state. This US$4.3 billion investment marks the completion of one of Brazil's largest private projects. The state-of-the-art facility will produce 2.55 million tonnes of eucalyptus pulp annually, increasing Suzano's production capacity by over 20% to 13.5 million tonnes per year.

The project aligns with Suzano's ESG commitments, using renewable biomass to generate 180 MW of surplus green power monthly. The mill's proximity to eucalyptus farms reduces emissions from transportation. It will create 3,000 full-time jobs and has already invested R$ 300 million in local infrastructure, education, and healthcare improvements.

Positive

• Increased production capacity by 20% to 13.5 million tonnes annually
• Generation of 180 MW surplus green power monthly
• Creation of 3,000 full-time jobs
• R$ 300 million investment in local infrastructure and social initiatives
• Reduced emissions due to proximity to eucalyptus farms
• Self-sufficiency in sulfuric acid and hydrogen peroxide production

Negative

• None.

Insights

Financial Analyst

Suzano's completion of the world's largest pulp production line, with an investment of $4.3 billion, is a substantial milestone. This project is expected to increase Suzano’s production capacity by over 20% to 13.5 million tonnes annually. In financial terms, the massive scale of this investment will likely bolster Suzano's market position as a dominant player in the pulp industry. The potential for increased revenue streams from the expanded capacity should positively impact Suzano's financial performance in the coming years. Additionally, the project's adherence to budget and timeline showcases financial prudence and strong project management skills, which could enhance investor confidence. The sustainability focus, including renewable energy generation and reduced emissions, aligns with global ESG (Environmental, Social, Governance) trends, potentially attracting ESG-conscious investors.

Market Research Analyst

The successful launch of the Cerrado Project positions Suzano favorably in the global pulp market. With a production capacity increase exceeding 20%, Suzano can better meet the growing global demand for eucalyptus pulp, used extensively in paper production. This enhancement may lead to Suzano capturing a larger market share, especially in regions where demand for sustainable products is rising. Furthermore, the proximity of the mill to Suzano’s eucalyptus plantations reduces logistical costs and time, potentially leading to cost savings and efficiency improvements. This competitive edge could help Suzano offer more competitively priced products, thereby increasing its appeal to large paper manufacturers globally.

Environmental Expert

Suzano’s new mill has notable environmental implications. The use of renewable biomass for energy, producing an average of 180 MW of surplus green power, underscores the company’s commitment to sustainability. This renewable energy can power a city of 2 million inhabitants, significantly reducing the carbon footprint associated with pulp production. Additionally, the reduced transportation distance from forest to mill diminishes emissions, aligning with global efforts to fight climate change. The plant’s self-sufficiency in sulfuric acid and hydrogen peroxide production further enhances its sustainability profile. Such initiatives not only support Suzano’s ESG goals but also set industry benchmarks for environmental responsibility.

Cerrado Project required investment of around US$4.3 billion and will contribute to increase Suzano’s production by more than 20%

SÃO PAULO--(BUSINESS WIRE)-- Suzano, the world’s largest market pulp producer, announces the successful operational startup of its new mill, the largest single pulp production line in the world, in Ribas do Rio Pardo, Mato Grosso do Sul state. This marks the completion of one of Brazil’s largest ever private investment projects.

This state-of-the-art facility will have an annual production capacity of 2.55 million tonnes of eucalyptus pulp, increasing Suzano’s production capacity by more than 20% to 13.5 million tonnes a year. The project is the result of a total investment of R$ 22.2 billion (~US$4.3 billion), of which R$ 15.9 billion (~US$3.1 billion) was allocated for the construction of the plant and R$ 6.3 billion (~US$1.2 billion) was earmarked for initiatives such as the formation of the planting base and the pulp outbound logistics. Suzano also has the capacity to produce 1.5 million tonnes of paper per year, including sanitary paper, printing and writing and packaging lines, among other products that use pulp as raw material.

“The successful completion of the Cerrado Project reflects the dedication and execution capability of each person involved in this grand and transformative project. It also attests to the culture of excellence that permeates the entire organization, masterfully led by Walter Schalka during his 11-year tenure here”, says Beto Abreu, newly-named CEO of Suzano. “His vision and ambition have proven key in delivering a world-class mill within the planned budget. Crucially, this is also a project which has, at every stage, adhered to Suzano’s core focus on supporting sustainability and having a positive impact on local communities”, he added.

In line with Suzano’s ESG Commitments to Renewing Life, the site has been purpose-built to meet global demand for sustainably produced eucalyptus-based products. The mill will use renewable biomass to produce, on average, 180 MW of surplus green power a month. This energy, which will be directed toward the mill’s local suppliers as well as the national grid, is enough to power a city of up to 2 million inhabitants. The proximity of the mill to Suzano’s eucalyptus farms means emissions and time from logging transportation will be significantly reduced. The structural distance from forest-to-mill is only 65 kilometres on average compared to Suzano’s structural average supply radius of 150 kilometres. The plant will also be self-sufficient in the production of sulfuric acid and hydrogen peroxide.

This is the largest investment in Suzano’s 100-year history and has a series of operational and socio-environmental advances. “The new plant will lay the foundations for future growth opportunities, such as the development of innovative new products from renewable raw material, and strengthen Suzano’s irreplicable business model", says Walter Schalka, who recently stepped down as CEO of Suzano after an 11-year journey in charge of the company.

The completed project will also have a major impact on both the local community and wider regional economy. Having created as many as 10,000 jobs during the construction phase, the operational mill will now provide 3,000 full-time jobs at the mill and the surrounding forestry and logistic operations.

In tandem with this, Suzano is making significant investments into improving local infrastructure and broadening access to quality education and healthcare. The company delivered more than R$ 300 million in construction and equipment in the municipality, in building new housing units and a new medical center and in voluntary social initiatives focused on sustainable development, income generation and reduction of poverty indicators in the region. These investments were distributed in seven axes of action: education, income generation, rights protection, infrastructure, health, relationship with communities and work.

ABOUT SUZANO

Suzano is the world’s largest producer of market pulp. Our responsibly grown raw materials are used in products reaching over two billion people in more than 100 countries, including tissue and toilet paper, books, printing and writing paper, diapers and period products, packaging, textiles, and a range of innovative applications that can replace products made from fossil fuels. Our pulp is made using biomass produced from farmed eucalyptus trees, offering a biodegradable, renewable and recyclable raw material for consumer and industrial use. We plant 1.2 million trees a day and only harvest what we plant. We manage around 26,000 km² of land and around 40% of this is protected for permanent conservation, with a zero deforestation policy across all of our operations. Suzano’s history goes back over 100 years. We are listed on the B3 stock exchange in Brazil (SUZB3) and the NYSE (SUZ) in the United States. Learn more at: suzano.com.br/en

View source version on businesswire.com: https://www.businesswire.com/news/home/20240722940920/en/

Hawthorn Advisors

suzano@hawthornadvisors.com

Source: Suzano

FAQ

What is the production capacity of Suzano's new pulp mill in Ribas do Rio Pardo?

Suzano's new pulp mill in Ribas do Rio Pardo has an annual production capacity of 2.55 million tonnes of eucalyptus pulp.

How much did Suzano invest in the Cerrado Project (SUZ)?

Suzano invested approximately US$4.3 billion (R$ 22.2 billion) in the Cerrado Project, with US$3.1 billion for plant construction and US$1.2 billion for planting and logistics.

How many jobs will Suzano's new pulp mill create (SUZ)?

Suzano's new pulp mill will create 3,000 full-time jobs in the mill, surrounding forestry, and logistic operations.

What is the green power generation capacity of Suzano's new mill (SUZ)?

Suzano's new mill will generate an average of 180 MW of surplus green power per month, enough to power a city of up to 2 million inhabitants.