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FIBRIA APP IS AVAILABLE FOR DOWNLOAD AT APPLE STORE AND GOOGLE PLAY
WELCOME TO THE 3
RD
FIBRIA INVESTOR TOUR
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DISCLAIMER
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The information contained in this presentation may include statements which constitute
forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933,
as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended.
Such forward-looking statements involve a certain degree of risk and uncertainty with respect
to business, financial, trend, strategy and other forecasts, and are based on assumptions, data
or methods that, although considered reasonable by the company at the time, may turn out to
be incorrect or imprecise, or may not be possible to realize.
The company gives no assurance that expectations disclosed in this presentation will be
confirmed.
Prospective investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties, and that actual results
may differ materially from those in the forward-looking statements, due to a variety of factors,
including, but not limited to, the risks of international business and other risks referred to in the
companys filings with the CVM and SEC.
The company does not undertake, and specifically disclaims any obligation to update any
forward-looking statements, which speak only for the date on which they are made.
Fibrias Team
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Marcelo Castelli, CEO
Aires Galhardo, Forestry
Guilherme Cavalcanti, CFO & IRO
Henri Philippe, Comercial & International Logistics
Paulo Silveira, Industrial & Engineering
Executive Officers
Paulo Gaia, General Manager
Industrial Operations
Caio Zanardo, General Manager
Forestry Operations
Andr Gonalves - General Manager
Camila Nogueira
Roberto Costa
Raimundo Guimares
Investor Relations
Geraldo Magella - Manager
Patricia Bahry
Nanci Contarini
Corporate Communication
Technology Center
Fernando Bertolucci, General Manager
Cesar Bonine, Manager
Gabriel Dehon, Manager
Paulo Pavan, Manager
Robert Sartorio, Manager
Accounting
Arvelino Cassaro, Manager
Treasury
Marcelo Habibe, General Manager
David Alegre, Manager
Governance, Risks and Compliance
Everson Bassinelo, General Manager
M&A
Vinicius Nonino, Officer
Supply Chain
Wellington Giacomin, Officer
AGENDA
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08:30 a.m. Registration
09:00 a.m. Financial Strategy |Guilherme Cavalcanti
09:45 a.m. Operational Risk Management Industrial - Fibria Case|FM Global
10:30 a.m. Forestry Capex | Aires Galhardo
11:15 a.m. Climate Change | Fernando Bertolucci
12:00 p.m. Q&A
01:40 p.m. Lunch
02:50 p.m. Departure for the Igarat watershed (1:40h)
04:30 p.m. Arrival and visit to the Igarat watershed
06:00 p.m. Departure for So Paulo
Financial Strategy
Guilherme Cavalcanti - CFO
6
THE MATURITY OF SYNERGIES CAPTURED SINCE FIBRIAS
CREATION IMPROVED ITS OPERATING INDICATORS
7
PRODUCTION VOLUME (000 t)
BEST PRACTICES AND OPERATING STABILITY
CASH COST (R$/ton)
SG&A (R$ million)
STRUCTURE AND PROCESS SIMPLIFICATION
EBITDA (R$ million) - EBITDA MARGIN (%)
4,600
5,054
5,184
5,299
5,271 5,253
2009* 2010* 2011 2012 2013 2Q14 LTM
432
448
471 473
505
519
656
624
596
549
545
2009* 2010* 2011 2012 2013 2Q14 LTM
Historical Value Inflation Effect**
593 594 605
584
648 645
900
826
766
678 699
2009* 2010* 2011 2012 2013 2Q14 LTM
Historical Value Inflation Effect**
1,522
2,526
1,964
2,253
2,796
2,857
2009* 2010* 2011 2012 2013 2Q14 LTM
29%
40%
34%
36%
40% 40%
* Excludes Conpacel | ** Inflation effect calculated by the IPCA (Consumer Price Index)
+14% -21%
-28%
NO EXPOSURE TO THE RISK OF ELECTRICITY SHORTAGES,
IN SPITE OF WHICH THE COMPANY HAVE BENEFITED
FROM THE SALE OF SURPLUS ENERGY
8
Utilities results boosted by energy sales
(2Q14: R$ 36/t I 1Q14: R$ 18/t I 2Q13: R$ 14/t)
546
559
14
13
5
4
(27) 4
2Q13 Maintenance
downtimes
Wood FX Maintenance Utilities Others 2Q14
LTM inflation
(IPCA): 6.5%
LTM average
FX: 7.9%
+ 2.2%
STRONG FLEXIBILITY AND STRUCTURAL ENERGY
GENERATION SURPLUS OF 60 MW
9
RB: Recovery Boiler (Total: 7) | PB: Power Boiler (Total: 6) | TG: Turbo Generator (Total: 13)
Aracruz
RB
RB
RB
PB
PB
TG
TG
TG
TG
TG
TG
CAPITAL STRUCTURE
FIBRIA HAS THE LOWEST LEVERAGE RATIO AMONG ITS LATIN
AMERICAN PEERS
10
Net Debt/EBITDA (x)
(1)
Fibria Arauco CMPC Klabin Suzano
S&P BB+/Positive BBB-/Stable BBB-/Stable BBB-/Stable BB/Negative
Moodys Ba1/Positive Baa3/Negative Baa3/Negative - Ba2/Stable
Fitch BBB-/Stable BBB/Stable BBB+/Stable BBB-/Stable BB-/Positive
(1) Fibrias historical data in BRL. | (2) Market consensus.
2.4 2.3
2.4
4.8
4.5
4.0
1.7 1.7
2.6
2.9
3.1
3.8
3.6 3.7
3.2
14.8
13.2
11.7
4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 2014
Fibria Suzano Klabin CMPC Arauco Eldorado
2
CONTINUATION OF THE LIABILITY MANAGEMENT PLAN,
ALSO FOCUSING ON IMPROVING MATURITIES
11
December 2013
June 2014
Cost of debt: 3.8%
Average maturity: 52 months
Land Deal
Bond buyback: Fibria 2020,
2021 and VOTO IV
Fibria 2024 issuance
Bank loans renegotiations
Lower cost of debt
Smoother debt amortization
schedule
NPV of all initiatives:
US$270 million
1,064
384
530
750
554
634
2,020
1,341
-
410
450
299
506
422
128
149
100
1,473
834 829
1,255
976
762
2,168
1,441
26
4
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Cost of debt: 4.6%
Average maturity: 52 months
Local Currency Foreign Currency
Local Currency Foreign Currency
855
314
451
831
778 790
371
318
11
1,302
213
459
318
524
437
133
174
135
37
6
1,068
773
769
1,355
1,215
923
545
453
48
6
1,302
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
BUT THE INITIATIVES HAVE NOT FINISHED, THERE ARE
CERTAIN ONGOING NEGOTIATIONS THAT WILL IMPROVE
FIBRIAS DEBT PROFILE EVEN FURTHER
12
Revolver
Liquidity 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Others ACC/ACE ECN BNDES Bond Pre-payment
Cash
R$1 billion
Average Term
From: 52 months | to: 54 months
Average Cost
From: 3.8% | to: 3.7%
A CONSISTENT AND DISCIPLINED APPROACH FOCUSED
ON REDUCING DEBT AND ITS COST
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Gross Debt (R$ million) x Leverage Interest (R$ million) x Leverage
14,985
8,457 8,606
3,840
6.3
3.6
4.8
3.4
2.8
2.3
Debt (R$) Debt (US$) Leverage (x)
946
528
473
230
6.3
5.9
5.5
5.2
4.6
3.8
Interest (R$) Interest (US$) Cost of Debt (%)
Free Cash Flow
Increase
Reduction in
interest
Reduction in
Cost of Debt
This creates a
virtuous cycle
2009 2010 2011 2012 2013 Jun/14 2009 2010 2011 2012 2013 2Q14LTM
NEW ISSUANCE BETTER PRICED THAN
INVESTMENT GRADE ISSUERS
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As of Sep 01, 2014
Rating Maturity Volume T-Spread Coupon
Fibria Ba1 / BBB- / BB+ 2024 US$ 600 MM 275 bps 5.25%
Braskem Baa3/BBB-/BBB- 2024 US$ 500 MM 340 bps 6.45%
Petrobras Baa1/BBB/BBB 2024 US$ 2.5 bi 350 bps 6.28%
BNDES Baa2/BBB-/ 2024 US$ 500 MM 362 bps 6.32%
Klabin BBB-/BBB- 2024 US$ 500 MM 269 bps 5.25%
Odebrecht Baa3/BBB/BBB 2029 US$ 500 MM 263 bps 5.25%
Secondary Market
Rating Maturity Volume T-Spread Yield
Fibria Ba1 / BBB- / BB+ 2024 US$ 600 MM 277 bps 5.158%
Braskem Baa3/BBB-/BBB- 2024 US$ 500 MM 300 bps 5.353%
Klabin BBB-/BBB- 2024 US$ 500 MM 287 bps 5.289%
Odebrecht Baa3/BBB-/BBB 2029 US$ 500 MM 251 bps 5.103%
Petrobras Baa1/BBB/BBB 2024 US$ 2.5 bi 254 bps 4.908%
Gerdau Baa3/BBB-/BBB- 2023 US$ 750 MM 260 bps 4.873%
GROSS CAPACITY ADDITION SHOULD NOT BE REGARDED
AS THE ONLY FACTOR INFLUENCING PULP PRICE
VOLATILITY(1)
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List Price bottoming at US$650/t in 2011 and US$726/t in 2014
B
H
K
P

p
r
i
c
e
s

-
c
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f
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$
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(
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0
0

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(1) Source: Hawkins Wright , Poyry and Fibria Analysis. Pulp price estimates according to Hawkins Wright (Jul/2014) and Brian McClay (Jul/14)
(2) Partially integrated production
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
1,8
2,0
0
100
200
300
400
500
600
700
800
900
1.000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Valdivia
APP
Hainan
Veracel
Nueva Aldea
Santa F
Mucuri
Fray
Bentos
Kerinci
PL3
Trs
Lagoas
Rizhao
APP Guangxi
Chenming
Zhanjiang
Eldorado
Montes
del Plata
Maranho
Guaba II
APP South
Sumatra
(2)
Klabin
CAPACITY CLOSURES DO HAPPEN
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Closures of Hardwood Capacity Worldwide (000 ton)
-910
-85
-1,260
-1,180
-540
-500
-105
-1,085
-1,030
2006 2007 2008 2009 2010 2011 2012 2013 2014-2016 E
as of
Aug14
Source: PPPC and Fibria
LOWEST VOLATILITY AMONG COMMODITIES
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Commodities Historical Volatility (US$)
(1)
38%
32%
30%
26%
25%
21%
26%
7%
Sugar Iron Ore WTI Crude
Oil
Soy LME Metals Ibovespa Cattle FOEX PIX
BHKP
(1) Since 2009
562
844
810
751
791
752
FX AND PULP PRICE EXPLAIN 80% OF FIBRIAS
EBITDA MARGIN
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1,522
2,526
1,964
2,253
2,796
2,857
2009 (1) 2010 (1) 2011 (1) 2012 2013 2Q14 LTM
29%
40%
34%
36%
40% 40%
EBITDA
(R$ million)
EBITDA
Margin
Average Price
FOEX (US$/t)
2.00
1.76
1.67
1.95
2.16
2.30
Exchange Rate
Average (R$/US$)
Each 10% depreciation of the Real increases EBITDA by 24%
FIBRIA DELIVERS ONE OF THE INDUSTRYS
HIGHEST EBITDA/T AND FCF/T
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Free cash flow- 2Q14 LTM (R$ Million)
2,857
1,125
(1,409)
(386)
111
(20)
(28)
Adjusted EBITDA Capex Interest
(paid/received)
Working Capital Taxes Others Free Cash Flow
Free Cash Flow per ton - 2Q14 LTM (R$/ton)
544
214
(268)
(74)
21
(4)
(5)
Adjusted EBITDA Capex Interest
(paid/received)
Working Capital Taxes Others Free Cash Flow
AMONG THE INDUSTRYS LOWEST CASH COST
PRODUCERS
20
Source: Hawkins Wright (Outlook for Market Pulp, July 2014) | Fibrias 2Q14 considering a FX of R$/US$2.23.
Gray bar includes cash expenses as Interest, CAPEX, SG&A and Taxes (Source: RISI and Fibria).
531
493 490
457
408
444
420
442
424
340
322
344
315
258 251
48
70
43
69
122
35 86 40
43
42
55
49
68
113
70
50
141
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Cash Cost (US$/t) Delivery (US$/t)
628
614
603
2Q14 net price
US$ 559/t
Positive Working
Capital: US$44/t
SG&A
Capex
Interest
Interest
Capacity
(k tons):
660 595 1,775 585 565 355 1,005 2,410 1,960 1,095 7,450 = 31,930 330 3,680 4,165 5,300
Total Cash Cost of BHKP delivered to Europe (US$/t)
EXCHANGE RATE DRIVERS
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International Market
Recovery of the US economy.
Carry-trade: Selic (11% p.a.) versus Fed Funds (0.25% p.a.)
+ Brazilian Central Bank Swaps.
Domestic Market
Balance of payments: current account deficit financed
by capital account.
Deterioration of the public accounts: reduction in the
primary surplus.
Crisis in Argentina: reduction in Brazilian exports.
Decline in industrial production
BRL DEPRECIATION IS A MARKET CONSENSUS THAT CAN
BE CONFIRMED THROUGH THE BROADER SPREAD
BETWEEN FX CALL/PUT OPTIONS
22
Put x Call x Spot
1,50
2,00
2,50
3,00
3,50
4,00
Jan/12 Oct/12 Dec/12 Feb/13 Apr/13 Jun/13 Aug/13 Oct/13 Dec/13 Apr/14 Jun/14 Aug/14
Put option Call Option BRL spot
NDF notional reduction and increase in zero cost collar operations followed by a BRL depreciation
REAL EXCHANGE RATE HAS NOT REFLECTED DOMESTIC
/FOREIGN INFLATION DIFFERENTIAL OVER TIME
(Base 100 = Jan 2002)
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217
94
0
30
60
90
120
150
180
210
240
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IPCA BRL/USD
FIBRIA HAS THE SIMPLEST AND MOST
TRANSPARENT CALL IN THE INDUSTRY
24
Negative Neutral Positive
Pulp supply
Closures/conversions
Inefficient capacities in China
Demand
Mature markets
China
Pulp price
Brazil GDP
Energy crisis
FX
Capex inflation
Cost inflation
Rating
Corporate Governance
ROE and ROIC
25
RETURNS MAY CONCEAL
MISLEADING INFORMATION, SOME
OF WHICH WE WILL TRY TO ADDRESS
When dealing with return metrics like ROE
and ROIC, it is advisable to be aware of the
following:
26
Brazilian and US peers are not comparable:
- USGAAP does not call for revaluation of biological assets;
Within the commodity sector, there are differences related
to the accounting treatment of certain information under
IFRS (e.g. biological assets in the mining sector vs forestry
products);
- IAS 41 states that biological assets should be measured at
the fair value;
Business combination (IFRS 3) had an additional impact
on companies that have undertaken M&A transactions
since 2009 Fibria's Case.
- IFRS 3 considers the fair value of the assets acquired.
WHEN LOOKING AT BLOOMBERG, ROE DUPONT
ANALYSIS SAYS THAT....
Net Margin
48.9%
9.6%
-14.8%
-11.3%
-10.1%
7.3%
2009 2010 2011 2012 2013
2014LTM
Net Margin = Net profit / Net revenues
Asset Turnover
23.2%
20.1%
20.1%
22.0%
25.2%
27.0%
2009 2010 2011 2012 2013
2014LTM
Asset Turnover = Net revenues / Average Assets
Total Leverage
2.14
2.05
1.94
1.89
1.85
1.78
2009 2010 2011 2012 2013
2014LTM
Total Leverage = Average Assets/ Average
Equity
ROE
24.4%
4.0%
-5.8%
-4.7% -4.7%
3.5%
2009 2010 2011 2012 2013
2014LTM
ROE = Net Profit / Average Equity
27
WHY SHOULD YOU NOT USE NET
PROFIT OR OPERATION PROFIT AS A
PROXY FOR FIBRIAS ROE AND ROIC?
There were others, but the main
accounting/non-cash items that led Fibria to
present net loss in recent years are:
28
FX translation of dollar denominated debt at BRL
financial statements
Depreciation, depletion and amortization
IMPACT OF THE FX VARIATION ON NET INCOME
(ACCOUNTING ONLY) HAS DRIVEN THE NET LOSS IN THE LAST
FEW YEARS
Since the Company is not subject to any material refinancing risk, the exchange rate
variation on dollar denominated debt has an even minor relevance
29
R$ million 2010 2011 2012 2013 2014LTM
1
Operating Profit 1,589 730 937 1,535 1,584
Net Financial Result (364) (1,869) (1,696) (2,054) (1,064)
Foreign Exchange Variation - Debt 331 (1,036) (804) (910) 5
Bond Repurchases/Other
(261) (176) (247) (429) (579)
Interest
(732) (660) (683) (576) (528)
Net Income (Loss) 529 (868) (698) (698) 522
2010 2011 2012 2013 Jun/14
Year End Exchange Rate 1.67 1.88 2.04 2.34 2.20
1 - As of June 30, 2014
CAPEX (INDUSTRIAL AND FORESTRY) VS. DEPRECIATION,
DEPLETION AND AMORTIZATION
30
1,416
1,078
1,287
1,409
1,884
1,848
1,862 1,863
2011 2012 2013 2Q14LTM
CAPEX Depreciation, Depletion and Amortization
(R$ MILLION)
CAPEX (INDUSTRIAL AND FORESTRY) VS. DEPRECIATION,
DEPLETION AND AMORTIZATION
(R$ MILLION)
31
1.416
1.078
1,287
1.409
1.884
1.848
1,862 1.863
2011 2012 2013 UDM 2Q14
CAPEX Depreciation, Depletion and Amortization
Industrial: R$330 million
Forestry: R$957 million
In the following slides we will show the main factors behind the reconciliation of the
capex and depreciation, depletion and amortization in the 2013 income statement
FORESTRY CAPEX VS. DEPLETION
R$ million (2013)
32
957
631
580
(65)
165
102
(20)
329
97
66
893
975
Forestry Capex
2013(1)
Expansion(2) Sustaining Forestry
Capex 2013
Fair value - IAS 41
(Biological Asset)(3)
Other Total Depletion
2013(3)
Forestry
management
Forestry
purchase
Forestry
Partnership
Historical
Depletion
IAS 41 and
IFRS 3
Depletion
Forestry
Partnership
Depletion
1. Includes Forestry Partnership - According to notes 18 and 22 (Additions 2013 Financial Statements)
2. According to 4Q13 Earnings Release Capital Expenditures
3. According to note 18 and 22 (2013 Financial Statements)
INDUSTRIAL CAPEX VS. DEPRECIATION
/AMORTIZATION
R$ million (2013)
33
1. According to note 19 (2013 Financial Statements)
2. According to 4Q13 Earnings Release (Capital Expenditures)
3. According to 2013 cash cost breakdown 14% for maintenance
330
322
908
(8)
380
190
17
Industrial Capex
2013(1)
Expansion(2) Sustaining Capex
2013
Maintenance
OPEX(3)
IFRS 3 Depreciation Other Total Depreciation/
Amortization 2013
WHY SHOULD YOU NOT USE NET INCOME OR OPERATING
PROFIT FOR THE ROE AND ROIC CALCULATION?
34
We recommend using a proxy for the net income or operating profit that
eliminates the already mentioned non-cash items, resulting in a metric that would
capture a cash approach
ROE
Adj. Ebitda Total Capex
Interest Taxes
Shareholders Equity
ROIC
Adj. Ebitda Total Capex
Interest Taxes
Invested Capital
Worth mentioning that any capital gains from land sales would be captured by operating
profit (EBIT), so when using Adj. EBITDA Capex, we are not capturing the return on land
sale, as in the case of Parkia deal in 2013 (capital gain before taxes: R$ 800 million)
Land sold to Parkia represented 38% of Fibrias own land in December, 2013.
Invested Capital = Account receivable + Inventories + current liabilities + fixed assets + Biological Assets
SUBSTITUTING NET INCOME AND ADJUSTING EQUITY TO
GIVE A CASH-BASED RETURN ON EQUITY
35
Adj. EBITDA CAPEX Interest Taxes
(R$ million)
-558
918
121
640
1,020 1,042
2009 2010 2011 2012 2013 2014 LTM
Including capital
gains from the land
sale in 2013, ROE
for that year would
have been 15%
Shareholders Equity (R$ million)
8,109 10,571 10,880 10,417 10,035 10,254
2.520
4.669
4.089
3.760
3.447 3.213
2009 2010 2011 2012 2013 2014 LTM
Shareholder Equity Before IFRS IFRS 3
ROE = (Adj. Ebitda CAPEX Interest - Taxes) / Equity before IFRS
-6.9%
8.7%
1.1%
6.1%
10.2% 10.2%
2009 2010 2011 2012 2013 2014 LTM
CASH ROE, BEFORE IFRS
36
ROE = Net Income / Equity
ROE = (Adj. Ebitda CAPEX Interest - Taxes) /
Equity before IFRS
24.4%
4.0%
-5.8%
-4.7% -4.7%
3.5%
2009 2010 2011 2012 2013
LTM
2014
-6.9%
8.7%
1.1%
6.1%
10.2% 10.2%
2009 2010 2011 2012 2013
LTM
2014
...AND THE SAME APPLIES TO THE ROIC
37
Invested Capital = Account receivable
+ Inventories + current liabilities + fixed
assets + Biological Assets
37
Adj. EBITDA CAPEX Interest Taxes
(R$ million)
Invested Capital (R$ million)
-558
918
121
640
1,020 1,042
2009 2010 2011 2012 2013 2014LTM
Including capital
gains from the land
sale in 2013, ROIC
for that year would
have been 11%
ROIC = (Adj. Ebitda CAPEX Interest - Taxes) /
Capital Employed before IFRS
-2.9%
5.1%
0.8%
4.2%
7.2% 7.3%
2009 2010 2011 2012 2013 2014LTM
19,216
17,951 15,227
15,068 14,106 14,265
2,133
2,036
1,940 1,833
1,573 1,532
1,512
1,263
931 874
693 695
2009 2010 2011 2012 2013 2014 LTM
Invested Capital Before IFRS IFRS 3 IAS 41
CLOSING REMARKS
38
Net income should be considered as a reference for dividend purposes
only, not for return metrics;
Most of the difference between capex and depreciation/depletion
explained by accounting factors generated by IFRS;
Positive evolution of Fibrias ROE and ROIC in recent years.
Operational Risk Management
The FM Global approach
FM GLOBAL BY THE NUMBERS
40
~3,000 total clients
310 clients in Brazil
178 years
31 years in Brazil
US$ 5.6 Bn premium p.a.
US$ 10.3 Bn surplus
AAFitch
A+ AM Best
THE FM GLOBAL DIFFERENCE
41
ENGINEERING
1800 field engineers
Single
focus on
Property
Mutual
Ownership
Membership
credits
Administration
and Claims
RESEARCH CAMPUS - FM GLOBAL
42
NORTH AND SOUTH AMERICA MARKET SHARE
43 43
Pulp Capacity Recovery Units Paper Capacity
69%
FM Global Others
65%
FM Global Others
64%
FM Global Others
WHAT DO THESE COMPANIES HAVE IN COMMON?
44
A CLEARLY DEFINED PATH TO HPR
45
1. Process commitment
2. Management interest
3. Investment commitment
4. Engineering support
5. Continuous improvement
FM GLOBAL RELATIONSHIP TENURE (IN YEARS)
127
123
113
111
90
76
65
12
31%
25%
20%
24%
0 - 5 years 5 -10 years 10 -15 years > 20 years
FM Global Client Average
46
HPR HIGHLY PROTECTED RISK
47
PREVENTION HPR PROTECTION
CAPACITY
US$ 15 million
HPR location: US$1 billion
RISK POTENTIAL
48
Initial risk
Magnitude($)
P
r
o
b
a
b
i
l
i
t
y
Maximum Foreseeable Loss
(MFL)
Prevention
Protection
HPR
49
Production
Time
$
$
Normal Activities
Loss
Disruption
Production
Adequate protection(HPR)
HPR BENEFIT
50
0,8
1,5
5,1
22,0
Average Loss Cost (US$ million) Average days to resume production
HPR Non HPR
Source: FM Global clients history 2000 - 2010
51
And if there is a loss?
PULP AND PAPER LOSSES BY PERIL
52
Source: Loss history 10 years | FM Global clients
35%
22%
12%
9%
8%
8%
6%
Mechanical breakdown
Fire
Natural Catastrophe
Other
Collapse
Pressude vessel
Electrical failure
Fibria and FM Global partnership
ACCOMPLISHMENTS
12 Years of Partnership
275 Recommendations completed
252 Field Engineering Visits
10 Visits per year with Fibrias Management
52
MEMBERSHIP CREDIT ($USD MILLION)
54
237
316
355
380
420
465
2001 2004 2007 2010 2013 2014
Fibria
Membership
Credit
$ 2,440,000
55
How close is Fibria to being fully HPR?
56
HPR BENEFITS
57
Maintain strong revenue streams
Superior risk management
Reduce production volatility
Promote operational stability
Meet customer needs and reliability
Preserve reputation
PROTECT FINANCIAL RESULTS
IMPROVE COMPETITIVENESS
FORESTRY CAPEX
Aires Galhardo Forestry Operations
58
CAPITAL EXPENDITURE
59
Maintenance
Fertilizer
Pesticides
Forestry protection
Soil preparation
Seedling
1
59%
2
24%
3
5%
4
4%
5
3%
6
3%
7
2%
Planting or
sprouding
Harvesting
and
logistics
Opex
The information contained herein is for the exclusive use of Fibria Celulose SA, and may not be transferred without authorization from the Company.
Base date: July, 2014. It does not include depreciation.
CAPITAL EXPENDITURE
60
Maintenance
Fertilizer
Pesticides
Forestry protection
Soil preparation
Seedling
1
59%
2
24%
3
5%
4
4%
5
3%
6
3%
7
2%
Planting or
sprouding
Harvesting
and
logistics
Opex
The information contained herein is for the exclusive use of Fibria Celulose SA, and may not be transferred without authorization from the Company.
Base date: July, 2014. It does not include depreciation.
FIBRIA INFLATION
FOCUS ON ALWAYS REMAINING BELOW THE
IPCA/INCAF
61
Index 2007=100
100
120
140
160
2007 2008 2009 2010 2011 2012 2013 2014 RF
Labor
Fertilizers
Pesticides
Fuel
etc
INCAF - Brazilian Wood Cost Index
FIBRIA - Fibria Wood Cost Index
IPCA - Brazilian Inflation
MAINTENANCE CAPEX
(R$ MILLION)
1,416
1,078
1,208
1,520
2011 2012 3Q13 LTM Land Deal:
Rural
Partnership
Non recurring
wood
purchase
Inflation FX Rate Modernization Others 2014E
62
NON RECURRING WOOD IMPACTS ON CASH
COST AND CAPEX
63
The wood impact should take 2-2.5 years when then it will
become again to normal levels
Aracruz Unit:
Non recurring increase in third party wood due to:
1) Limited investments in 2008-2009 due to financial crisis
2) Higher volumes of matured wood from partnership program
3) Physiological disturbance in southern Bahia (controlled impact)
Trs Lagoas Unit:
Increase in higher mill to forest distance under partnership program
contracts in Mato Grosso do Sul, in order to supply the original start-up
of Trs Lagoas II (2014).
Jacare Unit:
2-year increase in partnership program in So Paulo.
WOOD PURCHASING
64
0%
5%
10%
15%
20%
25%
30%
35%
40%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
In 2008/2009, in an effort to reduce costs, we
emphasized the cutting of our own wood and
stopped purchasing contracted forest fostering wood.
35% of third party wood supply in 2015
This percentage will start reducing in 2016 reaching
a long-term third party wood rate of 8%
MAINTENANCE CAPEX
(R$ MILLION)
1,416
1,078
1,208
1,520
2011 2012 3Q13 LTM Land Deal:
Rural
Partnership
Non recurring
wood
purchase
Inflation FX Rate Modernization Others 2014E
65
FORESTRY CAPEX FIBRIA STRATEGY TO SEEK
OUT BASE PARTNERSHIPS FOR WOOD SUPPLY
66
0,0
0,5
1,0
1,5
2011 2012 2013 RF2014
R
$

m
i
l
l
i
o
n
Operating Cost Wood Purchases/Leasing Parkia Roads Sustaining Other
OPERATING COSTS
STABILITY THROUGH IMPROVED MANAGEMENT
AND INNOVATION
67
Effective investment per
hectare remains in line with
the strategy of controlling
inflation
R$/ha
1,006
960
995
1,052
100.0%
95.4%
98.9%
104.6%
2011 2012 2013 RF2014
R$/ton
96 94 98 101
FOREST OF THE FUTURE
2014 ACHIEVEMENT OF 83% OF THE CUMULATIVE CURVE
68
A NEW OUTLOOK
A NEW MANAGEMENT MODEL
69
NEW SELF-PROPELLED PESTICIDE APPLICATION
TECHNOLOGY
70
30% of area cleaning operating
cost in Bahia
85 % machines for this operation
62 % of personnel in this
operation
Annual CAPEX savings of R$ 4.6 million
NPV - R$ 35.6 million
COMBINED ACTIVITIES
OPTIMIZATION OF THE MAINTENANCE AND LOGISTICS
SUPPORT STRUCTURE
71
Tillage Fertilization
Basin
Irrigation
Pre-
emergent
Annual CAPEX Savings R$ 1.8 million
NPV - R$ 16 million
SUSTAINING FORESTRY
72
This account also peaked in these years due to the replacement of machines
at Trs Lagoas
In an effort to reduce the impact, we introduced the Skidder model in 2014,
reducing the fleet from 5 Clambuncks to 3 Skidders
4.18
2.64
75
120
Before After
Cost (R$/m) Productivity (m/h)
73
FIBRIA FORESTRY IMPLEMENT PROJECT
(FFIP)
FIBRIA FORESTRY IMPLEMENT PROJECT (FFIP)
REQUIRED PATENT
74
Reduce the structural weight of the implement by 15%
Increase the volumetric capacity of the cargo box by 10%, through the use of
differentiated materials
Savings of R$2.80/m
54.6
49.7
56.5
62.1
Conventional FFIP
#trips/month/truck Cargo box/truck
ALIGNMENT
75
Average Projected Annual Increase at 7 years,
base Commercial Volume with Bark
MAI7 INV: MAI Inventory Last measurement
projects
Only plantations over 2 years old are
measured (< 2012)
Tip
Bark
Stump
Parameters (references):
MAI7tot (cc)*: 100%
MAI7com (cc)*: 95%
MAI7com (sc)**: 84%
Bark: 11 12%
Forecast Chart
Analyzed Variable
Age (years)
MAI: Mean Annual Increment Pulp Planting
*With bark ** Without bark
FIBRIA MAI
76
40
33
36
39
42
45
FIBRIA MAI7
2007 2008 2009 2010 2011 2012 average
m

c
c
/
h
a
.
y
e
a
r
Harvest Year
MANAGEMENT OF COMPLEXITY WITH
COMPETITIVE DIFFERENTIAL
77
Integrated Strategic Planning
UNs
Max value
FIbria
M&A
GAP/Surplus
wood
Supply
Strategy
Forestry
Managemen
t
FOCUS ON STAKEHOLDERS
Digestor
FOCUS ON THE CLIENT
What / when to
harvest?
What / when and
how to transport ?
Where / what type
of management to
adopt?
Clones/IMACEL
Road Plan
Supply Plan Harvest Plan
Transport
Plan
Silviculture
Plan
Nursery Plan
Long
Mid
Short
78
3 production units
27,000 plots of land
500,000 hectares of planted
area
3 transport modes +
transhipment of wood (hubs
and deposits)
Base Multipurpose Forestry Matrix
Proof of IMACCEL gains
Enhancement of land flows
Insertion of biomass module and the possibility of sending wood to the
biomass unit
Maximize the
Companys value
Minimize CAPEX
Minimize OPEX
Partnership with
companies
Management
recommendation
Acquisitions and
divestments
Operational strategy
definition
New businesses
analysis
LONG TERM PLANNING
Be prepared for market dynamics
WE REMAIN CONFIDENT IN MAINTAINING
FORESTRY COSTS BELOW INFLATION
79
FORESTRY HARVEST LOGISTICS
Increase operational
productivity through new
technology
Forestry Nano-Planning
Using spatial variability in our
favor to maximize the
productivity of each site
Use of larger marchines Lighter trucks with
greater load capacity
Maintain operational
excellence
OPERATIONAL PROCESSES
The next phase of the Forest of the Future will be proposed for 2015 to 2018
CLIMATE CHANGE AND ITS EFFECTS ON EUCALYPTUS
PLANTATIONS: Turning adversity into a competitive advantage
Fernando Bertolucci Technology Center
Climate Change
An overview
The Fibria Approach
Dimensions of analysis, resources and tools
Impacts of climate change on
eucalyptus plantations
Actions to improve adaptation and
the mitigation of risks
81
Climate Change
An overview
The Fibria Approach
Dimensions of analysis, resources and tools
Impacts of climate change on
eucalyptus plantations
Actions to improve adaptation and
the mitigation of risks
82
CLIMATE CHANGE - an overview
Main Observed Indicators of a Changing Global Climate
Northern Hemisphere Spring Snow Cover
A
Figuras IPCC 2013
Artic Summer Sea Ice Extent
B
Change in Global Average Upper Heat Content
C
Global Average Sea Level Change
D
84
CLIMATE CHANGE - an overview
Simulation: average of several models for different scenarios by 2100
IPCC 2013 Pictures
Changes in average temperature in relation to current
Changes in average rainfall in relation to current
Least drastic scenario Most drastic scenario
85
CLIMATE CHANGE - an overview
Global warming is
an unequivocal
fact:
the surface of the earth
has been successively
warmer over the past
three decades than it
has during any decade
since 1850
Concentrations of
CO2 have
increased 40%
since pre-industrial
times
There is a clear
human impact on
the climate
86
CLIMATE CHANGE - an overview
86
The impacts are clear: Ex. Mountain Pine Beetle
A necessary condition for natural
pest (larvae) control: -30C
temperature for at least five
calendar days
Milder winters, previously
uncommon:
Expansion of pests
Epidemics, unprecedented
damage
Area affected (USA/CANADA):
over 20 million ha.
87
HOW HAS FIBRIA
APPROACHED
THIS ISSUE?
UNDERSTANDING THE BASICS
88
Physiological Processes Robust Databases
UNDERSTANDING THE BASICS
89
Phenotype (F) Genotype (G) Environment (A) GxE
SP
MS
ES and BA
Open-air laboratories ($$)
Sensors and equipment
Specialized field teams
Partnerships with Universities
and Research Institutes
23,000 planting blocks:
Very diverse environments
Different growth potentials
Specific needs
MONITORING
STUDIES
DIMENSIONS OF ANALYSIS
90
TREE
(TECHS)
PLANTATION
(FLUX TOWERS)
LANDSCAPE
(WATERSHEDS)
Different Scales
RESOURCES AND TOOLS USED - TREE LEVEL
91
TECHS: Tolerance of Eucalyptus Clones to Hydric and Thermal Stress
25 COMPANIES / 8 UNIVERSITIES
CONNECTION BETWEEN FORESTRY, ECOPHYSIOLOGY AND BREEDING
7 climate types
Annual rainfall: 800 to 2600mm
EXCLUSION OF RAIN:
+ variability
RESOURCES AND TOOLS USED - TREE LEVEL
92
Stomatal
conductance
Measurements
photosynthesis
Respiration
Gas exchange
Leaf water
potential
Sap flow
Leaf area
index
Leaf area index
Leaf and tree
transpiration
RESOURCES AND TOOLS USED
93
PLANTATION LEVEL
Flow towers
Second-by-second measurements of climate and
plant growth
Balances of carbon, water and energy, as well as
the efficient use of these resources #
Modeling the processes that control growth
# Eddy-covariance methodology
RESOURCES AND TOOLS USED
94
LANDSCAPE LEVEL
Watershed Studies (validated):
Monitoring of the main components of the water, carbon and nutrient cycles
Runoff Water table Rainwater interception
RESOURCES AND TOOLS USED: SUMMARY
95
Flow Towers (Eucalyptus, Cerrado, Grassland) 6
Intensely Monitored Watersheds 7
Fibria Autmatic Weather Stations 55
APPLYING EXPERTISE
96
VALUE ADDED TO BUSINESS
MODELING
Adaptado de PMS Instrument Company
Humidity
Temperature
Radiation
Wind
Transpiration
Leaf area
Photosynthesis
Growth
Nutrition
Humidity
Fertility
Texture
Temperature
Soil type
Environmental
conditions
Gross primary
production
LAI
CO
2
Intercepted
light
Photosynthesis
Light interception
T, VPD,
H
2
O, N
Net primary
production
Respiration
Climate
and soil
condition
Stem
Roots Leaves
FROM UNDERSTANDING PHENOMENA TO
GROWTH MODELS (SIMULATIONS)
3-PG
Physiological Principles Predicting Growth
Climate Change
An overview
The Fibria Approach
Dimensions of analysis, resources and tools
Impacts of climate change on
eucalyptus plantations
Actions to improve adaptation and
the mitigation of risks
97
IMPACTS OF CLIMATE CHANGE
98
Changes in weather patterns
Variation in rainfall patterns in Esprito Santo (1968 to 2010)
500
600
700
800
900
1000
1100
1200
1300
1400
1500
1600
1700
1800
1900
2000
1
9
6
8
1
9
6
9
1
9
7
0
1
9
7
1
1
9
7
2
1
9
7
3
1
9
7
4
1
9
7
5
1
9
7
6
1
9
7
7
1
9
7
8
1
9
7
9
1
9
8
0
1
9
8
1
1
9
8
2
1
9
8
3
1
9
8
4
1
9
8
5
1
9
8
6
1
9
8
7
1
9
8
8
1
9
8
9
1
9
9
0
1
9
9
1
1
9
9
2
1
9
9
3
1
9
9
4
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
rainfall (mm)
Reduced rainfall and increased amplitude (extreme weather)
IMPACTS OF CLIMATE CHANGE
99
Reduced rainfall vs. forest productivity
Productivity Simulation
Historical Average 2003 (dry year)
CLIMATE CHANGE IMPACTS
100
The impact of increased CO
2
Several Studies
Ex.:
The Hawkesbury Forest Experiment
University of Western Sydney (Australia)
Effects of increased atmospheric CO2 on plants:
Stimulation of photosynthetic activity increased
carbohydrates, accelerating the growth of the crowns and
stems, leading to greater productivity.
Reduction in stomatal conductance less use of water
positive impact on the amount of water that flows into rivers
and streams, as well as recharging the water table.
CLIMATE CHANGE IMPACTS
101
Compensation for the increase in CO
2
HISTORICAL PRODUCTIVITY PRODUCTIVITY 2030 PRODUCTIVITY 2050
Meteorological and eco-physiologicalmodels (simulations) indicate potential productivity
gains in areas currently used by Fibria
Note: 3 global models (HAD, CSIRO, PCM); change in precipitation, VPD and temperature, 4 IPCC scenarios (A1, B1, A2, B2)
Climate Change
An overview
The Fibria Approach
Dimensions of analysis, resources and tools
Impacts of climate change on
eucalyptus plantations
Actions to improve adaptation and
the mitigation of risks
102
ADAPTATION AND RISK MITIGATION ACTIONS
103
Areas with environmental restrictions, especially with limitations on the availability
of water, will be needed to meet the future demand for wood (a global issue)
In this context, considering its 20 years of research into the issue, Fibria has
intensified its actions to adapt to this new situation, turning a potential problem
into an opportunity to generate a competitive advantage
ADAPTATION AND RISK MITIGATION ACTIONS
104
1 2
3 4
5 6
Detailed soil and climatic
classification and
mapping of all of our
planting areas
Evaluation of traditional
genetic material
(urograndis) under water
stress - clonal tests and
experiments in climatic extremes
Introduction of species
with a tolerance to water
stress
Environmental change
simulations and
evaluations of the risks of
Eucalyptus pests and
diseases
Mapping and
monitoring of exotic
pests and disease
Genetic transformation of
Eucalyptus for greater
tolerance to climatic
extremes
ADAPTATION AND RISK MITIGATION ACTIONS
105
Ex.: CLONAL TEST IN MONTEZUMA MG (650 mm of rainfall per year) 5
years old
Clone A Clone D
Clone
IMA4
m
3
/ha.yr
A 43.6
B 40.3
C 39.7
D 39.5
E 38.1
F 37.3
G 37.1
H 34.8
FINAL MESSAGE: THE POSSIBILITIES FOR OUR FUTURE
106
A NEW BALANCE DEPENDS ON RESPECT FOR NATURAL RESOURCES
Technological Level x Wood productivity (m
3
/ha.year)
0
10
20
30
40
50
60
70
Historical Actual Potential
DEFINING FACTORS
Climate
(water, temperature,
sunlight and CO
2
)
LIMITING FACTORS
Soil, nutrients,
genotypes,
management
REDUCING FACTORS
Weeds,
Pests
and diseases
20 YEARS OF
KNOWLEDGE:
Predictability:
anticipating the future
Mitigation of limiting
factors
Produce more with less
W
o
o
d

p
r
o
d
u
c
t
i
v
i
t
y
(
m
3
/
h
a
.
y
e
a
r
)
Technological Level
MANY OF THESE RESULTS CAME FROM OUR
OPEN-AIR LAB
107
THE WATERSHED PROJECT (since early 90s)
Plant Ecophysiology
Hydrogeology
Meteorology
Water Balance
Carbon Allocation
Soil Erosion
Flora
Fauna
Forest modelling
Integrating scientific areas of study!
WATERSHED PROJECT
Develop forestry management techniques and practices to increase forest
productivity and reduce possible environmental impacts
Answer controversial questions about Fibria's Eucalyptus plantations involving
different stakeholders
Develop and enhance process-based models to predict and estimate forest
growth taking into account environmental factors
Promote environmental education and sustainable conscious of surrounding
communities
Maintain operational licenses and certifications
108
Main Objectives
WATERSHED PROJECT
Total area = 150 ha
Previous land use: pasture
Natural vegetation: Atlantic rainforest
Climate: tropical summer wet season and winter dry season.
Current land use:
E. grandis x E. urophylla hybrids (5th cycle) (65% of the land) with two plantation ages
Rainforest regenerating (30%)
Roads (5%)
109
Main Objectives
WATERSHED PROJECT
110
Site Map and Tour
WATER
TABLE
TREE
TRANSPIRATION
SOIL
EROSION
CARBON
BALANCE
SOIL
EROSION
1
2
3
111
Fibria Investor Tour
September 16, 2014
D
DIP: Deinked Pulp. Paper pulp produced by deinking of recovered paper.
H
Hardwood pulp: is based on short fibre wood species with broad leaves, typically
eucalyptus, birch aspen and mixed hardwoods. The hardwoods are simply harder
than the softwoods because the fibres are shorter. Shorter fibre makes for denser
cellulose fibres, but also for weaker cellulose. Thus, hardwood is well suited for
copy paper, while softwood is required for lightweight printing papers and strong
packaging papers. Among the bleached market kraft pulps, 55% is softwood pulp
and 45% is hardwood pulp.
L
LBKP: Leaf bleached kraft pulp, also known as BHKP.
M
Mechanically processed pulp: (also known as "high-yield" pulp) is characterized by
the fact that a very high percentage (normally in the range of 85 to 95 percent) of
the original wood components are retained in the final product. The mechanical
processes include groundwood, refiner mechanical, thermo mechanical and
chemi-thermomechanical. They are products with high bulk, opacity and
absorbency, some qualities that are particularly advantageous in certain use
applications, like in the production of newsprint and in publication grades of
printing and writing paper. Dissolving pulp is highly purified chemical pulp of
special quality, with a very high alpha-cellulose content (usually 90% or more),
intended primarily for conversion into chemical derivatives of cellulose and used
mainly in the manufacture of viscose staple fibre, solvent spin fibre an filament.
These pulps are always bleached. They are used principally as the source of
cellulose in the manufacture of such products as manmade fibers, plastics,
lacquers, rayon, acetate and explosives. Pulp is produced for internal
consumption (integrated pulp) or for external sales (market pulp). Of the total
global capacity of 215mn tonnes/year, 48mn tonnes (about 255) are market pulp.
For statistical purposes, all pulp which crosses an international border is defined as
market pulp, even if it is being transferred between mills belonging to a single
company. Bleached chemical pulp (BCP, most of it bleached kraft pulp or BKP) is
the main pulp type and accounts for nearly 90% of all market pulp capacity
(42.5mn tonnes/year). The integrated capacity of bleached kraft pulp is about
53mn tonnes, bringing the total global capacity of bleach kraft to roughly 95mn
tonnes per year. Pulp can be categorized according to what type of wood
species is used, or more specifically, the length of the wood fibres. Softwood pulp
is based on long fibre wood species. These are typically trees with needles, such
as pine and spruce. Pine is the main raw material for chemical softwood pulp,
while spruce is excellent for the production of mechanical pulps used in
publication papers.
GLOSSARY
B
BCP: Bleached chemical pulp (includes bleached kraft pulp and all sulphite pulp,
including unbleached sulphite). Also known as "white pulp".BCTMP: Bleached
chemi-thermomechanical pulp (Market BCTMP is produced mainly in Canada
and New Zealand).
BEKP: Bleached eucalyptus kraft pulp (Market BEKP is produced mainly in Latin
America and Iberia. Some is also produced in Norway and Thailand).
BHKP: Bleached hardwood kraft pulp (all grades, including BEKP, birch, SMHW,
NMHW).
Birch: Bleached birch kraft pulp. Birch is the principal hardwood grade produced
in the Nordic countries. Some is also produced in Canada, although for statistical
purposes Canadian birch is categorized as northern mixed hardwood - NMHW.
BKP: Bleached kraft pulp (includes all softwood and hardwood kraft pulp.)
BSKP: Bleached softwood kraft pulp (all grades).
BSP: Bleached sulphite pulp.
c
Chemically processed pulp: which accounts for approximately 55% of total
global pulp production, can be broken down further into sulphate pulp (kraft
pulp) or sulphite pulp. The name "kraft" is derived from the German word for
"strong". The method involves cooking (digesting) wood chips in an alkaline
solution for several hours during which time the chemicals attack the lignin in the
wood. The dissolved lignin is later removed leaving behind the cellulose fibres.
Sulphite is an old and obsolete production process, and most of the chemical
pulp today is produced through the sulphate production process. Chemical pulp
can be further categorized into bleached and unbleached. Unbleached Kraft
pulp is dark brown in color, so before it can be used in many papermaking
applications it must undergo a series of bleaching processes.
CMP: Chemi-mechanical pulp. It is the pulp of ligno-cellulose materials, that are
previously treated with chemical reagents, obtained by defibration at an
atmospheric pressure.
CTMP: Chemi-thermomechanical pulp. A category of pulp which is produced by
a process in which wood chips are treated with chemicals prior to heating and
refining. Unbleached CTMP is mainly used in integrated paper mills. Bleached
CTMP, dried and sold as market pulp, has grown significantly in importance and is
now widely used in the production of many grades of paper, including woodfree
papers.
GLOSSARY
N
NBKP: Needle bleached kraft pulp, also known as BSKP.
NBSK: Northern bleached softwood kraft pulp, the industry's benchmark grade of
pulp. Market NBSK is produced mainly in Canada and the Nordic countries.
Some NBSK is also produced in north-western USA and in Russia .
NMHW: Northern mixed hardwood (kraft) pulp. Sometimes known as NBHK,
northern bleached hardwood kraft.
P
Pulp: is the main raw material used in the production of virgin-fibre paper and
paperboard. Fibres are long structures, formed by a microscopic size plant cell,
not wide but long, hollowand with walls that vary in width.
Pulpwood: is wood used to produce pulp that is used in the manufacture of
lumber or plywood. Paper can also be produced using non-wood fibres, like
straw, bagasse or bamboo. Recycled paper and paperboard uses recovered
paper and board instead of virgin fibre. Pulp can be classified by the production
process used to separate the three main components of the wood: cellulose,
water and lignin. Lignin acts as the cementing agent in wood, binding the
cellulose fibres together. This process can be chemical (wood cooked with
chemicals), mechanical (wood ground with physical force), or a combination.
R
RMP: Refiner Pulp. Pulp produced by subjecting wood chips and/or residues to
atmospheric or open-discharge refining.
S
Semi-chemical pulp: High-yield pulp produced by a mild chemical treatment of
the raw material followed by a mechanical defibrating operation, where the
lignin is only partially removed.
SGW: Stone Groundwood Pulp. Pulp produced by grinding wood logs or bolts
(usually 4 feet in length) into relatively short fibres.
SMHW: Southern mixed hardwood (kraft) pulp (produced exclusively in the
southern United States .)
Sources: Celulose Online, Bracelpa, PPPC and Merrill Lynch.
Semi-chemical pulp: High-yield pulp produced by a mild chemical treatment of
the raw material followed by a mechanical defibrating operation, where the
lignin is only partially removed.
T
TCF: Totally chlorine free. Pulp bleached without the use of any chlorine or
chlorinated chemical compounds.
TMP: Thermomechanical Pulp. A high-yield pulp produced by a process in which
wood particles are softened by pre-heating under pressure prior to a pressurized
refining stage. TMP is generally used at mills producing newsprint and mechanical
printing papers. Many older mills have replaced their groundwood and sulphite
pulping operations with TMP.
U
UKP: Unbleached kraft pulp.
USP: Unbleached sulphite pulp.