The year 2017 was surprising for the global pulp market. It began with a prospect of prices dropping throughout the period, as a result of new production lines on the market – one of them, our second mill in Três Lagoas (Mato Grosso do Sul state). These forecasts were not confirmed. Despite the increase in the supply of pulp due to these new capacities, a series of unexpected shutdowns removed from the market a volume of pulp larger than the new addition.
This turnaround in supply was combined with strong growth in demand for a market in which, contrary to the initial forecasts of analysts and players, there was a shortage of the product. The result was an uninterrupted sequence of increases in the price of pulp, which reached the end of the year at USD 979 per ton in Europe, according to the reference price disclosed by FOEX.
Fibria was well positioned to yield the results from the change in conditions and, in addition, the market assessment improved: the S&P risk agency changed its outlook for Fibria from negative to stable, eliminating the risk of loss of investment grade. Fitch, which also classifies the company’s investment grade credit, changed the outlook from stable to positive. We now have the lowest cost of funding in the sector and we have carried out the largest investment project in Latin America with significantly lower leverage than expected.
What does this mean for the immediate future? A great increase in the company’s financial sustainability, which generates more cash and drives its deleveraging.
At the same time, we seek to consolidate our social and environmental sustainability, which is also gradually becoming recognized by the market as a set of indicators as important as the economic front to evaluate the future prospects of an enterprise.
Fibria seeks dialogues and transparency in its relationship with its shareholders and investors. To this end, it promotes events such as the Investor Tour and Fibria Day, held annually at the New York Stock Exchange (NYSE), both events with the presence of analysts and investors from around the world.
The company is listed on the New York Stock Exchange’s Dow Jones Emerging Markets Sustainability Index (DJSI Emerging Markets) Corporate Sustainability Index (ISE), which signals to the market their commitment to this aspect.
Fibria issued its first green bonds in January
in the amount of USD 700 million
These bonds are used to finance investments related to environmental sustainability, including maintaining planted forests, conserving native forests, and eco-efficiency projects related to water, renewable energy, and waste.
These resources, in line with the company’s long-term goals, will fund projects focused on sustainable forest management, native forest restoration and biodiversity conservation, waste management, sustainable water management, and generation of renewable energy.
In September, Fibria received, for this offering, the Global Capital Sustainable and Responsible Capital Markets Award, granted by Global Capital, one of the leading international publications on capital markets.