abtcp-tappi presentation 2010

The History of Brazilian Pulp and Paper: A Contextual Approach Looking to the FutureStephen Scheibe

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Brazilian Pulp and Paper: A Contextual Approach-Scheibe

Your logo• Table 1• Milestones Reflecting Change as

Related to the Paper and Pulp Industry 1800-1930

• 19th Century Portuguese Empire forced to Brazil; Slavery (ends 1888), rural extractive, unequal and uneven development. Empire opens need for paper for administration, record keeping, press and books.


• cerca 1830 Eucalyptus introduced in Brazil

• 1889End of Empire, First Republic - Order and Progress, Republican nationalism supersedes cosmopolitan aristocracy. “Favors” industry.

• 1901Founding of Escola Agricola Luis de Queiroz in Piracicaba


• late 19th and early 20th century Large flows of immigrants from Europe (Italy, Germany), Middle East (Former Ottoman Empire) and Asia (Japan). The emergence of powerful immigrant families, i.e. Matarazzo, Klabin, Lafer, Simonsen, Feffer

• 1890Less than 70000 people in the city of Sao Paulo


• 20th Century, First half Rapid urbanization due to both push factors (end of slavery) and pull factors, mercantile and financial capital supporting industry

• 1914-1918 World War I and Import Substitution (Opportunity for locally produced industrial goods)

• 1922Modern Art Week, Tenente Movement and idea of contemporary Brazil


• cerca 1925 Eucalyptus used for railroad ties, posts, and fuel

• 1927Gordinho Braune pioneers eucalyptus pulp production

• 1929-1930 The Crash and The Revolution of 1930 - Getulio Vargas and room for new elites and nationalist ideology.


• 1929-1930 The Crash and The Revolution of 1930 - Getulio Vargas and room for new elites and nationalist ideology.

• 1930Sao Paulo assumes lead in industry and passes 1 million inhabitants, a “tipping point” for industry. Acceptance of urban, industrial, modern.


• Table 2-Milestones Reflecting Major Changes as Related to Paper and Pulp 1930-1964

• 1930Revolution and End of First Republic - Getulio Vargas

• 1932“Constituitionalist” Revolt in Sao Paulo

• 1932FIESP founded and Great Depression


• 1933-1934 Lafers and Klabins acquire Mortandade with help from government and rename it Harmonia and Monte Alegre.

• 1937Estado Novo, Integralismo, Neo-fascist centralization with strong Catholic conservative influence

• 1936-1939 Spanish Civil War (Statist ideologies communism vs fascism)


• 1939-1945 World War II (Democracy vs Nazism)

• 1940’s Intensification of planting of eucalyptus forests for energy and pulp with intensive study and improvements of species for productivity

• 1940-1945 Basic industries in Brazil including steel (CSN-Volta Redonda) and Monte Alegre, known as the Volta Redonda of paper and pulp


• 1945End of War and end of Vargas dictatorship; democracy

• 1945-1950 Dutra government and post war economic crisis

• 1950Brazil produces 253,000 tons of paper and 95000 tons of pulp, Votorantim (Emirio de Morais) acquires Cia. Pedras Brancas, Guaiba, RS.

• 1950Return of democratically elected Getulio Vargas (pai dos pobres)


• 1952-1953 Creation of Petrobras and BNDE

• 1955-1960 President Juscelino Kubitschek and consolidation of import substitution model and central planning. 50 years in 5.

• 1960Brazil produces 505,000 tons of paper and 286000 tons of pulp

• 1960-1964 Crisis of populism and military take over


• Table 3 - Milestones Reflecting Major Changes as Related to Paper and Pulp1964-2010

• 1964“Integration” of state technocrats and business people

• 1966Lei 5601 and tax incentives for reforestation• Late 60’s Major reforestation projects in Brazil’s

southeast•


• 1970’s “Miracle Years”• 1970Pulp production 777 thousand tons,

paper production 1098 thousand tons• Early 70’sFounding or consolidation of

Aracruz, Cenibra, Iguacu, Jari and other pulp mills


• 1980’s Lost decade but paper and principally pulp, based on success of forests, grows steadily

• 1980Pulp production 3096 thousand tons, paper production 3361 thousand tons

• 1990Brazil: largest producer of BEKP, pulp production 4351 thousand tons, paper production 4715 thousand tons


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• 1992VCP-Votorantim Celulose e Papel incorporated after acquisitions and fusion

• 1993Aracruz (ARA) is first Brazilian company listed on NYSE as ADR

• 1990’s Direct Elections, Privatizations and Monetary Stability


• 2000’s Finance Capital vs Family Capital, i.e. Lorentzen bought out of Aracruz, creation of Fibria through merger of VCP and Aracruz (2009)

• 2000Pulp production of 7209 thousand tons passes, for the first time, paper production of 7200 thousand tons and export of pulp greatly exceeds paper exports in dollars


• 2000International Paper acquires Champion assets in Brazil and becomes a major player in paper market

• 2000’s Political pressure on industry over land reform and environment

• 2002Lula starts first of two presidential terms


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• 2005Celso Foekel begins online publication of Eucalyptus Newsletter

• 2010Consolidation of Industry - Pulp wins out over Paper


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Os irmãos Daniel e Israel Klabin sorriem encantados com os elogios do presidente Lula ao seu parque industrial , onde a empresa papeleira comemorou 110 anos na terça ,14 de abril. Lula disse que o Brasil precisa de mais papéis produtivos – quais os fabricados em Monte Alegre – e menos papéis especulativos – como os que provocaram a crise sub-prime. Fonte:Margaritasemcensura.com


“Contracts for the financings necessary for construction of the new plant (Mucuri) were signed in 2006, and the BNDES (Brazilian Development Bank) is a significant participant.”


•BNDES, que injetou R$ 2,4 bilhões para a formação da empresaFIBRIA


• Table 4 - Future Trends and Upcoming Milestones

• 2010Digital printing surpasses offset printing• 2010’s Continued relative decline of paper

and pulp industry in USA, Canada, Nordic countries

• 2010’s Continued growth China as consumer of raw materials, i.e. pulp and as producer of finished products in paper.


• 2010’s Ongoing dependence and cozy relationship with state, principally through BNDES

• 2010’s Ongoing pressure for transparency in more “conscious capitalism”

• 2015Brazil online with 20 million tons pulp


Your logo• 2020Greater paper mill flexibility (mini-mills similar to steel) growth opportunity but also increased competition USA/Canada

• 2020Per capita consumption of paper doubles in Brazil

• 2020Electronic paper and printing continues inroads into paper demand which increases pressure for new paper products, i.e. clothing


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• 2014Shortage of furnish in Brazil due to lack of reforestation

• 2020Reforestation revives because of demand and carbon credit stimulus

• 2010’s Intensification of land use for forests and other crops


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• 2010’s End of the family entrepreneurs, i.e. Klabins, Emirio de Morais, Feffers and end of politician/diplomat/entrepreneur

• 2010’s Consolidation of MBA style management and finance capital with tension between “private”, “public” and “state” capital.


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KT3 =Capital, Terra,

Trabalho, Tecnologia


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• K=Capital in short supply & costly• Terra=Land expensive and competitive

uses• Trabalho=Labor in short supply and not

skilled• Tecnologia=Technology, imported with lag

& high cost


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ORCapital foreign & national more availableLand abundant & intensified usageLabor available & training in placeTechnology-national development as in the

case of Eucalyptus.


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• Choices are made at:

• Societal level in public policy

• Entrepreneurial level by corporate actors

abtcp-tappi presentation 2010

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