Statement from the

Board

GRI 102-14
Klabin announced positive figures at the end of 2019, mainly driven by results achieve over the last quarter, despite the hardships faced both in global markets and in Brazil. Major accomplishments were attained over the period, as the Company celebrated its 120th anniversary by announcing the largest investment ever made in its history and continued to revamp its journey. Throughout 2019, in addition to approving significant investments in business expansion, our flexibility and operational efficiency were leveraged to help us overcome economic challenges and maintain the high performance of our indicators.

As the largest producer and exporter of packaging paper in Brazil, the only company in the country offering the market solutions in hardwood, softwood and fluff pulps, and the national leader in corrugated packaging and industrial bags, we are currently experiencing an attractive and consistent moment for the industry – “Paper is cool again”. We are geared up to keep pace with the latest market movements and trends.

The integrated production chain – from wood to packaging – is one of the keys to our business success, allowing flexibility in sales and the development of a diversified product portfolio.

The expansion of the portfolio also reflects the operation of the Puma Unit, one of the most modern pulp mills in the world, inaugurated in 2016, which significantly enhanced the size of the Company. In April 2019, we announced the Puma II Project, historically, Klabin’s largest investment, with total estimated gross value of BRL 9.1 billion.

Our new expansion cycle involves the construction of two packaging paper machines, with integrated pulp production, to be installed at the industrial unit of Ortigueira (PR), the same site as the Puma Unit. The implementation of the new production line will allow the manufacture of coated white-top Kraftliner paper and Eukaliner paper, made exclusively from the eucalyptus fiber, which is unprecedented worldwide, with superior quality and generating value for the customer.

Also in 2019, we purchased an industrial plant in the city of Horizonte, state of Ceará, to expand the production of corrugated cardboard packaging and to meet the demands of the growing fruit and industry market in Brazil’s North and Northeast regions. The paper packaging segment showed strong growth towards the end of the year, with a record amount of orders in the last quarter.

We won a public bid for a pulp terminal at the port of Paranaguá (PR), which will allow us to optimize the operations’ logistics conditions. Another important event in 2019 was the beginning of operations at the Pilot Facility Park, in Telêmaco Borba (PR), aimed at the development of research and innovative solutions for the market. Studies and tests are now carried out on fronts such as microfibrillated cellulose (MFC) and lignin.

With a focus on operational efficiency, care for people and for the environment, we have been increasingly developing products from renewable, recyclable and biodegradable sources, fostering a circular economy model and actively participating in the construction of a sustainable consumption future.

An important recognition for Klabin’s management came when the company ranked first among those in the Pulp and Paper sector for the 2019 edition of the Exame Sustainability Guide. The publication presents a thorough performance assessment of major companies in Brazil.

Klabin was also featured for the second consecutive year on CDP’s “A List” – a global information platform for investors. We are recognized as a leading company on environmental transparency and performance in three categories scored by the CDP: combating climate change, managing water resources and sustainable forest management. This reinforces our priority in transforming the future and placing sustainability at the core of our strategic decisions, striving to be the global corporate benchmark in responsible solutions that conform to society’s transformations.

Klabin’s Sustainable Development Goals (KSDGs) reinforce such commitment by aligning our strategic priorities with the United Nations 2030 Agenda, together with the promise we have undertaken to be signatories to the UN Global Compact, since 2003.
In 2020, amidst the current coronavirus pandemic with impacts in Brazil and the world, our work is focused on caring for the preservation of the health of our employees, their families and society as a whole, which has led us to review processes and working methods. We have reduced operations to the technical limit to assure a safe fulfillment of our mission of protecting life, while also meeting our commitment as part of a production chain that provides papers and packaging so that essential products, such as medicines, food and hygiene and cleaning materials, reach the entire population at such a delicate time.

These are some of the many reasons we have to thank everyone who contributed to the Company’s positive results in 2019. Particularly, the Board of Directors and the Controllers, who believe in the capacity of their employees, committed to the generation of value, shared with the achievement of the best possible results. Our gratitude also goes to our entire team for their engagement, attitude and resilience in view of the critical situation we all face regarding the Covid-19 outbreak. We will continue to work in a responsible and sustainable manner to maintain Klabin in its proper growth path. We are also grateful to investors, customers, suppliers and partners, who believe in the perpetuation of the company.

Cristiano Teixeira
Chief Executive Officer