Klabin Paper Brazil may invest in the production of fluff pulp in the future

In recent years, competition for eucalyptus wood used for pulp production in Brazil has intensified and the price of afforestation land has soared, making new pulp projects less profitable. The raw material, eucalyptus, accounts for 45% of the cost of pulp production.

Although there is a shortage of wood and afforestation land for pulp production globally, it is advantageous for producers in South America, where pulp production costs are lower than in other parts of the world. In the next 10 to 20 years, South America will dominate the pulp supply market.

At present, the raw materials for pulp production are eucalyptus and pine, but in order to increase the production of short-fiber pulp to replace long-fiber pulp, it is possible to replace pine plantations with eucalyptus plantations in the short term. Klabin Paper has developed kraft paper lined with 100% eucalyptus fiber.

Conifers in the northern hemisphere grow much more slowly than broadleaf trees, so production is so inefficient that in the future some conifers may be replaced by eucalyptus.

The fluff pulp business, which is used in sanitary napkins and diapers, is strategic for Klabin Paper and will be the focus of future investments. The states of Santa Catarina and Parana are ideal for growing pine trees that can produce niche conifer fluff pulp.

The commissioning of the Mapa da Arauco pulp project in Chile and the UPM pulp plant in Uruguay during the year increased the supply of staple fiber pulp and contributed to a significant adjustment in pulp prices. In 2024, Suzano Paper's Cerrado project will come on stream and pulp prices are expected to face downward pressure.