Eldorado Brasil is a Brazilian company, with global performance and stands out for having one of the largest and most modern pulp mill in the world.
In an exclusive interview with CW Group's IPPWeek.com, Eldorado Commercial Director and Logistics, Rodrigo Libaber talked about the business outlook, the company's innovation, and the sustainability practices for which Eldorado is governed.
Q: Eldorado entered the market only in 2010 and today it is already one of the largest pulp mills in the world. What is the key to this success and how do you describe the role and the focus of Eldorado nowadays?
A: The construction of Eldorado began in 2010, and the plant was commissioned in 2012. The secret of success begins in a state-of-the-art industrial park, and a young company operated by engaged, motivated people, determined to do things differently. It is in this direction, through constant improvement in operating performance, a continued reduction in the average radius of our forests, as evidenced by one of the lowest cash costs in the world, which Eldorado offers its customers and partners through relationships of trust and transparency, products and Services.
Q: What are the challenges in surviving as a new company in an already saturated market?
A: The global pulp market is not saturated; on the contrary, the demand for this commodity continues to have high demand. For example, in 2016, growth was 2.4 million tonnes, compared to growth projections of 1.4 million tonnes. Therefore, we believe that there are opportunities to strengthen our sales in foreign markets, backed by a solid commercial strategy with a very high level of service.
Q: What are the main trends in Brazil and globally in terms of production and customer demand?
A: In all markets there is a trend towards products and services that are increasingly sustainable and have a positive impact on the environment. Customers are more demanding and conscientious in terms of quality of products and services. More efficient and automated industrial parks, seeking maximum productivity and efficiency in addition to greater proximity between producers and final customers by intensifying lasting partnerships. This is the short and medium term trend for our industry. In terms of segments, one of the main trends is the growth of the tissue segment (person hygiene papers and cleaning). This is explained by the development of domestic consumption, urbanization and by the increase of the purchasing power of the population in general, associated with the improvement of living standards in several countries of the world.
Q: In the last years, Eldorado has strengthened its presence in the international market. Presently, in what way does the company act internationally and what are the next projects concerning the foreign market?
A: The foreign market is the main destination of Eldorado's production, which sells about 90% of its production to more than 50 countries in Europe, Asia, North America and Latin America. The global pulp market remains hot, which has given us the opportunity to announce successive price increases in all regions where we operate. The commercial strategy of diversification of the customer base and segments proves adequate to the market conditions, being a competitive advantage. In addition, the company focuses on long-term partnerships with clients with high growth potential.
Q: Since the beginning of 2017 the price of pulp has increased and it is expected to continue until 2018. In which way could it possibly increase the impact of the paper industry in Brazil and therefore the industry in South America?
A: Consistent movements of price increases in the global pulp market are the result of the balance between global supply and demand, where demand overrides supply. When this happens, there are some possible impacts, the main ones being:
- Paper producers pass on the increase in order to protect their margins
- Paper producers see their margins reduced, boosting the search for alternative solutions to recover their margins, either through reduction of inefficiencies and costs, via productivity improvement or through consolidation of the sector.
Therefore, increases in pulp prices, if not backed by strong demand for paper consumption, accelerate the search for greater efficiency, guaranteeing greater competitiveness to the sector as a whole.
Q: Eldorado recently launched an innovative project: Vanguard 2.0. Can you explain what the project is and what are its benefits?
A: The Vanguarda 2.0 project reinforces Eldorado's pioneering and innovative position in its sector, since the company will have the largest single pulp production line in the world, with nominal capacity installed for 2.5 million pulp per year. With the two lines in operation, Eldorado will be able to manufacture more than 4 million tons of pulp, giving rise to the largest industrial complex in the sector. The project will adopt the best and most innovative technologies available with the objective of producing a quality pulp, guaranteeing the company's competitiveness in the international market and generating the least possible impact on the environment, through process optimization and reuse of resources.
Q: Sustainability is another important element in the paper and pulp industry today. How important are environmental and sustainability considerations for Eldorado and in which way do they impact the operations?
A: Sustainability is one of the strategic pillars of Eldorado and this is a concept that is integral to all our areas. We adopt the best and most innovative technologies with the objective of producing a quality pulp, generating the least possible impact on the environment, through process optimization and reuse of resources. It is worth remembering that we are the only company in the pulp sector that is self-sufficient in energy. Eldorado's power generation facility has installed power to produce up to 220 MW / hour. In addition to generating biomass energy for its own consumption and of partners installed in the industrial complex in Três Lagoas (MS), the company also supplies energy to the Brazilian electrical system.
Q: By the end of 2016, the federal government announced its strategy for the renewal of 22 million hectares of forest by 2030. What has been done to recover the damaged forest area, and what still needs to be done? How will the reforestation impact the industry and the company? What are the main expectations that Eldorado has for the industry, both globally and in Brazil?
A: Our expectations for the pulp sector are very positive, we believe that demand will continue to be strong, in all markets producing paper, especially tissue and specialties. In line with previous years, we believe that the demand for eucalyptus fiber will continue to grow above the other fibers, due to the high perception of value in relation to its technical characteristics by the various producing segments, especially the tissue and some specialties.