São Paulo, March 31, 2020 — Klabin, Brazil’s largest manufacturer and exporter of packaging paper, has announced the acquisition of International Paper’s packaging paper and corrugated packaging business in Brazil. With an investment of R$ 330 million, the transaction is in line with Klabin’s operational and product flexibility integration and expansion strategy, by enhancing service to markets and customers. Today, International Paper’s packaging paper units have an annual production capacity of 310 thousand tons, while the corrugated boxes operations have a capacity of 305 thousand tons per year, with a 6.6%* market share in the domestic market.

With the acquisition, Klabin will reach an installed capacity of more than 1 million tons of corrugated packaging per year, with a 23.9%* market share, strengthening its position as a leader in the corrugated boxes segment in Brazil. The company also is broadening its leading position as Brazil’s largest packaging paper recycler and largest manufacturer of recycled paper in Brazil, which stresses its responsibility to act actively in the circular economy and solid waste management in Brazil.

With the acquired assets, located in São Paulo, Goiás and Amazonas, Klabin will have corrugated boxes plants across the five regions of Brazil. The arrival of an industrial unit in the Midwest will enhance the service to the animal protein sector, a key sector for the Brazilian economy and with a wide competitive edge in the world. “We are always watching out for integration business opportunities and, after a long period of negotiations, I am very pleased to announce this transaction, which stresses the belief in the Brazilian market and validates our long-term strategic vision”, says Cristiano Teixeira, CEO of Klabin.

The completion of the transaction is pending approval by the Administrative Council for Economic Defense (CADE). Klabin, with a solid cash position and the best debt profile in its history (with an average term of around eight years), will use its own resources for funding, and the impact on financial leverage will be intangible.

With a focus on operational efficiency, care for people and the environment, Klabin has increasingly developed renewable products. Solutions in paper and corrugated packaging are made from recycled fibers and planted and certified forests, from sustainable, renewable and recyclable sources. Klabin’s packaging is certified by international bodies and assures safety and quality to its customers’ products.

*data from the Brazilian Corrugated Boxes Association (ABPO), 2018.