Investment Plan - June 2011
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Investment Plan - June 2011

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Investment Plan - June 2011 Investment Plan - June 2011 Presentation Transcript

  • Investment PlanJune 8th, 2011 1
  • DisclaimerCertain statements in this presentation may constitute forward-looking statements. Such statements aresubject to known and unknown risks and uncertainties that could cause the Company’s actual results todiffer materially from those set forth in the forward-looking statements. These risks include changes incustomer demand for the Company’s products, changes in raw material costs, seasonal fluctuations incustomer orders, pricing actions by competitors, significant changes in the applicable rates of exchange ofthe Brazilian real against the US dollar, and general changes in the economic environment in Brazil,emerging markets or internationally.
  • AgendaHighlights 04Maranhão and Piauí Units 07Suzano Renewable Energy 1150% Conpacel Acquisition 13Estimated Capex 15
  • HighlightsSuzano’s Investment Plan• 2011 Capex: R$3.5 billion• Maranhão start-up : November/2013• Decision to purchase Piauí’s industrial equipment: 1H14• Estimated 2011 Net Debt/EBITDA: between 3.0x and 3.5x• Pulp and paper growth cycle: − CAGR 2004 - 2010: 18% p.a. − CAGR 2010 - 2016: 14% p.a.Installed Capacity (tons, thousands) Piauí Unit Maranhão Unit 6,210 4,710 4,710 4,710 3,210 3,210 4,920 2,750 2,850 2,850 3,420 3,420 3,420 1,720 1,920 1,920 1,920 1,240 1,485 1,650 1,750 1,750 640 820 456 570 784 915 1,080 1,100 1,100 1,100 1,100 1,290 1,290 1,290 1,290 1,290 1,290 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e 2014e 2015e 2016e 4
  • Suzano 2024Growth strategy consolidation and project scope review Inflação • Launch of Suzano 2024: − Regional leadership in paper: Conpacel + KSR (R$1.5 billion) on 01/31/2011 − Renewable energy: launch of Suzano Renewable Energy on 07/29/2010 − Biotechnology: FuturaGene acquisition (US$84 million) on 07/19/2010 • Scope review of pulp growth projects: Projects Review 2008 Jun/2011 Capacity 1.3 mm ton/year each 1.5 mm ton/year each Additional energy capacity Maranhão Not forecasted 100 MW Piauí Not forecasted 100 MW Start-up Maranhão 4Q13 Nov/2013 Piauí 4Q14 1H16* Possibility of own port No Yes Industrial capex US$1.8 billion US$2.3 billion * Decision to purchase Piauí’s industrial equipment estimated for 1H14 Metallic commodity price inflation (steel, aluminum, cement and etc) Appreciation of the Real against the Dollar 5
  • AgendaHighlights 04Maranhão and Piauí Units 07Suzano Renewable Energy 1150% Conpacel Acquisition 13Estimated Capex 15
  • Maranhão UnitFunding structured and industrial equipment purchase contracts signed• 1.5 million tons/year of market pulp• 100 MW of additional energy to be sold• Board of Directors approved industrial equipment purchases: contracts with Metso and Siemens• Start-up: November/2013, as originally announced• Possibility of own port• Partnership with Vale (Vale Florestar and railroad)• 43 thousand ha of forest already planted Contracts signed with Metso and Siemens• Funding: − BNDES: R$2.7 billion, 12-year maturity and 3-year grace period − Mandatory convertible debentures: R$1.2 billion − Funding for the imported equipment supported by foreign credit agencies (ECA’s among others) − Cash flow generation• Total capex up to 03/31/2011: R$396 million (R$ million) 2009 2010 1Q11 2011e Forestry 193 159 34 249 Industrial 0 4 7 905 Total 193 162 41 1,154 7
  • Maranhão UnitOver 3 thousand people in operation, infrastructure and training • About 800 people working in the Maranhão Unit construction (earth-moving work : ~600 people) • Over 1,600 people working in the forestry base (5% employees; 95% third-parties) • Technical operational training has started: ~300 people • Agreement for the training of around 6,000 people on construction work and services: ~ 400 people already undergoing training Earth-moving work in Maranhão Cidelândia Nursery Maranhão Unit Office First class in Imperatriz 8
  • Piauí UnitDecision to purchase Piauí’s industrial equipment postponed until 1H14• Total capex up to 03/31/2011 : R$353 million (R$ milllion) 2008 2009 2010 1Q11 2011e Forestry 3 162 91 97 165 Industrial 0 0 0 0 7 Total 3 162 91 97 172• 47 thousand ha of forest already planted• Most modern nursery in the world: 30 million seedlings/year• 35 forest partnership contracts in the region: 6 thousand ha• Long term railroad contracts guarantee production transportation (Transnordestina)• Start-up: 1H16• 100 MW of additional energy to be sold Nursery Nursery Plan of Piauí’s nursery 9
  • AgendaHighlights 04Maranhão and Piauí Units 07Suzano Renewable Energy 1150% Conpacel Acquisition 13Estimated Capex 15
  • Suzano Renewable Energy Capital structure about to be defined• Suzano Renewable Energy launch: July/2010 Project update:• 3 units to produce wood pellets of 1 MM ton/year each • Advanced negotiation by 2014 of final contracts with clients• Estimated start-up: 2013 • Engineering with Promon and Stolberg• Pre operational capex: ~US$800 million (Canadian) − 2011e capex: ~ R$170 million • Specific clones selected − Equipment purchase estimated for 4Q11 • Dedicated plantation (Energy Forests)• Ongoing private equity placement • Dedicated team• World leader• Initial focus on the European market Wood pellets for energy, produced from renewable energy-oriented forests 11
  • AgendaHighlights 04Maranhão and Piauí Units 07Suzano Renewable Energy 1150% Conpacel Acquisition 13Estimated Capex 15
  • 50% Conpacel Acquisition Regional leadership in P&W paper and pulp capacity growth• Additional capacity(50%): 170 thousand tons of market pulp and 190 thousand tons of paper• Limeira Unity capacity: 340 thousand tons of market pulp and 380 thousand tons of paper• Among the best paper assets in Latin America• Conpacel 2010 EBITDA (50% Suzano) : ~R$250 million• NPV of synergies: R$300 million• Integration of Limeira Unit concluded in 1Q11• #1 paper distribution channel in Latin America: KSR/SPP Nemo Limeira Unit (ex-Conpacel) Pulp Dryer 13
  • AgendaHighlight 04Maranhão and Piauí Units 07Suzano Renewable Energy 1150% Conpacel Acquisition 13Estimated Capex 15
  • Maintenance CapexEstimated maintenance capex schedule (R$ million) 2010 2011e Normalized* Forestry 232 345 330 Industrial 98 176 155 Total 330 521 485* Figures do not include growth projects Main changes 2010 vs. 2011: • Conpacel: − Forestry: + R$46 million − Industrial: + R$26 million • Mucuri maintenance capex increase • Increase the planting program in order to recover the average forest age in Bahia 15
  • Estimated 2011 CapexNet Debt/EBITDA for 2011 estimated at 3.0x to 3.5x,in line with investment grade status (R$ billion) 2011e Growth 3.0 Maranhão Unit 1.1 Forestry 0.2 Industrial 0.9 Piauí Unit 0.2 Suzano Renewable Energy 0.2 Conpacel + KSR 1.5 Sustain 0.5 Total 3.5Note: figures do not include investments in port, branch rail line and othersActions/Options to maintain leverage no higher than 3.5x net Debt/EBITDA:• Mandatory convertible debenture issuance: R$1.2 billion• Divestment of Capim Branco (81 MW of installed capacity and 51 MW of assured energy)• Divestment of non-strategic land• Strategic partnership 16
  • Investiment PlanGrowth projects will be developed with discipline, respecting Company’sfinancial solidity Capex (R$ billion) Actions/Options to maintain leverage no higher than 4.0 3.5x net Debt/EBITDA from 2012 onwards: 3.5 • Divestment of non-strategic land 2.2 3.0 3.5 • Energy pre-sale 1.7 • Possibility of outsourcing activities: port, branch 0.5 0.5 0.5 rail line, water and effluent treatment 2011e 2012e 2013e • Strategic partnership Sustain GrowthNote: figures do not include investments that may be outsourced (port, • Equitybranch rail line and others)The continuity of the Company’s investment plan is tied to project profitability and investmentdiscipline, supported by:• Financial solidity• Compatible financing conditions: long term and competitive costs• Consistent track record• Investment grade status 17
  • HighlightsSuzano’s Investment Plan• 2011 Capex: R$3.5 billion• Maranhão start-up : November/2013• Decision to purchase Piauí’s industrial equipment: 1H14• Estimated 2011 Net Debt/EBITDA: between 3.0x and 3.5x• Pulp and paper growth cycle: − CAGR 2004 - 2010: 18% p.a. − CAGR 2010 - 2016: 14% p.a.Installed Capacity (tons, thousands) Piauí Unit Maranhão Unit 6,210 4,710 4,710 4,710 3,210 3,210 4,920 2,750 2,850 2,850 3,420 3,420 3,420 1,720 1,920 1,920 1,920 1,240 1,485 1,650 1,750 1,750 640 820 456 570 784 915 1,080 1,100 1,100 1,100 1,100 1,290 1,290 1,290 1,290 1,290 1,290 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e 2014e 2015e 2016e 18
  • Investor Relations TeamAntonio Maciel (CEO and IR Director) +55 (11) 3503-9061 ri@suzano.com.brAndrea Fernandes (IR Executive Manager) +55 (11) 3503-9062 andreaf@suzano.com.brÁurea Portugal (Assistant) +55 (11) 3503-9061 aportugal@suzano.com.brFernanda Nardy (Analyst) +55 (11) 3503-9066 fnardy@suzano.com.brMichelle Corda (Analyst) +55 (11) 3503-9359 mcorda@suzano.com.brRosely Onizuca (Analyst) +55 (11) 3503-9355 ronizuca@suzano.com.brInvestor Relationswww.suzano.com.br/ir19