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Copyright © 2017 Fibria, all rights reserved
Challenges and Dilemmas in Product Innovations and Funding Mechanisms
in the Biobased Industry
FIBRIA - CASE OF A BRAZILIAN MARKET PULP PRODUCER
PAULO CÉSAR PAVAN
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 company's 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.
Disclaimer
Agenda
• Corporate Figures
• Bio-Products Role in Fibria’s Strategy
• Premises Involved
• Case: From a Challenge to a Strategy
• Actual Status of Some Initiatives
• Takeaways
Shareholder Structure and Governance
Operations & Numbers
Mills & CapacitiesTrês Lagoas – Mato Grosso do Sul – 1,300 thousand t/y
Horizon 2 – Mato Grosso do sul – 1,950 thounsand t/y
Veracel – Bahia – 560 thousand t/yAracruz – Espirito Santo – 2,340 thousand t/y
Jacareí – São Paulo – 1,100 thousand t/y
Global Positioning in Hardwood Market Pulp
Source: RISI, Hawkings Wright, PPPC and Fibria (Nov 2016)
PROFITABILITY
GROWTH
DIVERSIFICATION
Operational Excellence
Financial Discipline
Solid Governance
Sustainability
Transparency
High Performance Culture
Organizational Climate
Options
IMMEDIATE SHORT TERM MEDIUM TERM LONG TERMS
Bio-Products Role in Fibria’s Strategy
Operational Excellence
Modernization
Biotechnology
Forest Base Formation
Organic Growth
Consolidation
Bio Strategy
Logistics
Real Estate
Actively and preferably pursue consolidation aiming at a healthier industry.
Continuous the promotion of growth through expansions and partnerships in a disciplined way.
Maintain active forest formation to be ready for growth opportunities.
Consolidate our position in the 10% lowest cash cost players in the industry by:
• Achieving MAICEL of15,0 tons/ha/year of pulp by 2025 for new planted forests.
• Pursuing a minimum of 10% of differentiated pulp volume priced with a premium.
Diversify its cash flow
through focused
investments in non pulp
businesses, leveraging
key Fibria´s assets and
competencies.
Achieve a sizable free
cash flow from new
businesses in comparison
with pulp business.
PROFITABILITY GROWTH DIVERSIFICATION
Bio-Products Role in Fibria’s Strategy
Premises Involved in the Diversification Process
AMBITIOUSLONG TERM VIEW
PRUDENT, FOCUSED AND DISCIPLINED ACTION
PLAN UNDER EXECUTION
Complementaryto our
value chain
Leverage on ourcompetencies
Partneringwith winnertechnologyproviders
Appliedinnovation as ultimate goal
“Stage & Gate”
Process
Creation ofStrategicFlexibility
FOCUSED DIVERSIFICATION
OK but… Where should we go??
Path attractiveness for Fibria
Pat
h m
atu
rity
Market Sizeby 2020
Gasification
Pyrolysis
Hydrolysis
Catal. Depol.
Pellets
Lignin
Biocomposites
Nanocellulose
Opportunities change with Tech & Mkt Context
PYROLISIS
LIGNIN
NANOCELLULOSE
BIOCOMPOSITES
Prioritized Paths
Specific Assessments for Certain Scopes
• Best combination for any given mill
• New routes (that could be) introduced to the Portfolio
• Survey on new markets, potential partners, value proposition
• ....
Specific Assessments - ExamplePrioritization Panel - MCDM
2012 2013 2014 2015 2016 2017
Lignina:
Produção Piloto
Pirólise
Lignina:
Actual Demonstration of Corp. Engagement
Development Status of some Tech Paths
Identification of potential
technological partners
Strategic relationships
in place
Pilot investments
Identification of promising technologies
Negotiationwith selectedtechnological
partners
Commercial Investments
PYROLISIS
LIGNIN
NANOCELLULOSE
BIOCOMPOSITES
DEV
ELO
PM
ENT
STA
GE
Severalpartners already
collaborating
Severalpartners already
collaborating
Ongoinginvestigation
Ongoingnegotiations
• Support from the board;
• Basic assumptions, aligned with companie’s culture, support recommendations and
facilitate decisions; eg positioning in new value streams;
• A structured and prioritized master plan introduces efficiency to a process that can get
lost amid so many alternatives. Resources will always be limited in relation to emerging
alternatives;
• RD&I is expected to lead to commercial investiments, risks, and generate turnover;
• World is under exponential transformation, anything apparently not (volume)
representative may represent a disruption to other businesses in the future.
BTW, the same is true towards P&P businesses.
• Think bold.
Takeaways … for product (business) innovation