SAO PAULO, Brazil, 13 August 2024 (Fastmarkets RISI) - Softwood is at the center of the strategy for the Brazilian packaging paper producer Klabin, with contributions from Arauco's forest assets in Paraná, southern Brazil, acquired at the end of 2023, chief executive officer Cristiano Teixeira said during the Fastmarkets 2024 Latin America Conference on August 13.

The executive noted that globally, Klabin "sees no opportunity" for softwood forests and production capacity, but "on the other hand, we see many uses for softwood. One example is the adult diaper segment, which is unlikely to see softwood replaced; if it is, it will be by a blend within the packaging itself," he said.

When asked about potential investments in other countries in Latin America, Teixeira said, "We don't see fiber production in another area of the region. There needs to be a journey of political stability for us to consider investments."

Regarding cardboard, Teixeira said that the company intends to raise prices to at least match the inflation rate, which is measured by the Broad Consumer Price Index (IPCA) and is expected to be around 4.2% this year, according to the latest Focus Report.

"Today, I see the price of cardboard as highly resilient. And I use this stability to talk about integration. Klabin is based on integration, and through it, we integrate 60-70% of our production," he said.

Teixeira also mentioned that the company believes the use of recycled materials has increased significantly worldwide, with less use of hardwood.

"For this reason, recycled materials bring opportunities to the sector, which is a movement of return on invested capital [ROIC], by removing the forest asset from this cardboard and generating more flexibility between papers."

The CEO also cited the stability in fluff prices compared with pulp prices, where he has already observed "enormous volatility."

"So, looking at these segments with stable prices, Klabin is involved in all of them," he said.

https://www.risiinfo.com/ic/news/marketprices/with-forest-expansion-in-southern-brazil-softwood-is-at-the-center-of-klabin-s-strategy-ceo-236047.html