Brazil’s Suzano wants to boost paper pulp sales to China in 2007

2 March 2007

Sao Paulo, Brazil, 2 March – The chairman of Brazilian paper and pulp manufacturer Suzano said Thursday in Sao Paulo that the projection for the company’s Asian sales in 2007, specifically to China, was 26 percent more than posted in the third quarter of of 2006.

Suzano sold 140,000 tons of pulp to Asia in 2006, against 124,000 tons in 2005.

António Maciel Neto said that, “with the entry into production of the second pulp line in Mucuri, in Southern Bahia, which will add a further million tons as of October 2007, Suzano forecasts that Asia’s stake of global sales of pulp will see considerable growth.

Neto, who visited China in November, also said that the recent fall seen on the Shanghai stock exchange would not affect the world demand for pulp, which would continue to grow in 2007, “driven by China.”

“So far I have seen no impact,” said the chairman of the pulp and paper company who noted there had been no suspension or cancellation f orders by Suzano’s Chinese companies.

“Mega-investments in China continue. There are not going to stop because of a fall (which occurred) a few days ago (in the financial market),” he said.

Neto also noted that the Chinese plan was to increase paper production from 56 million tons to 80 million tons by the end of the decade, which would require more pulp.

In 2006, Chinese demand for eucalyptus pulp, which is a speciality of Brazilian companies, increased 35 percent, which is higher than the market average of 12 percent.

Suzano said its net profit in 2006 had fallen 11 percent, from 500 million reals to 444 million reals, due to exchange rate differences, with net revenues having risen 11 percent to 3.09 billion reals.

The company’s EBITDA (earnings before interest, tax, depreciation and amortization) margin was over the 26.9 percent posted in 2005, but below the 40 percent reached in 2003 when the lowered value of the real helped the company’s foreign sales.

According to Maciel Neto the margin is expected to rise more as of 2008 due to the positive effects of the new Mucuri production line. (macauhub)