Suzano to Commission Maranhao Pulp Mill in Brazil

Aug. 13, 2013 (Press Release) - Suzano will commission its Maranhão pulp production unit, one of the most modern in the world, with eucalyptus market pulp capacity of 1.5 million tons/year and surplus power generation of 100MW. The plant’s startup is scheduled for 4Q13.

The formation of the unit’s forestry base was begun in 2008 with Suzano’s experience in forest technology to assure a portfolio of genetics suited to many different regions. The wood will be supplied by own forests, the Vale Florestar Program and other local producers.

The industrial plant at the Maranhão unit is a reference in technology and uses leading suppliers of services and equipment, such as Metso, Siemens and Poyry. The plant will also be operated by a professional management team with vast experience in project execution.

The new plant will have two dryers and two lime kilns, assuring it greater operational flexibility, and higher stability. In addition, the ramp up and the on-site operational teams for 18 months after startup are guaranteed in contract. Metso will operate a Service Center in Imperatriz and offer on-site technical support.

The Maranhão Unit is strategically located for distributing its pulp to international markets, especially Europe and the United States.

The construction of the Maranhão Pulp Unit is advancing with approximately 12,000 people working on forest formation and on the construction of the industrial facilities. In July 2013, overall physical construction had reached approximately 90% completion.

The Maranhão Unit is located in Imperatriz, a city of significant size (population of 250,000) that can easily develop sufficient local labor. Suzano has created a People Development Program with the aim of preparing future professionals for the various jobs at the plant in Imperatriz. The program launched vocational training courses, which were concluded in January of last year, with 226 people graduating.

Another initiative qualifying the local population to work in the Imperatriz industrial unit and in the local job market is the People Training in Construction and Industrial Assembly Program (Capacitar). Created in partnership with the government and other local companies and entities, the Capacitar Consortium offered free courses in 5 municipalities of the state of Maranhão, effectively uniting various sectors of society in a single cause. In all, 5,640 people have graduated from the program, which was concluded last November. Another training program to qualify workers in the region for jobs in infrastructure services sectors (restaurants, hotels, etc.) was structured, from which 675 professionals had graduated as of April 2013. The program is expected to prepare and graduate some 900 professionals.

The Maranhão Unit will receive tax incentives consisting of a 75% reduction in the income tax rate for 10 years and an accelerated depreciation incentive (DAI), in accordance with Federal Laws 11.196 and 12.712, the latter enacted in August 2012. The depreciation incentives consists of full depreciation in the year of acquisition or within four years after acquisition and is conditional upon the project also receiving the 75% reduction in the income tax rate, which begins in the year after the start of the project’s operations.

The estimated value of the industrial investments at the Maranhão Unit was increased by 2.5%. This budget was increased to reflect the higher prices for contracting certain packages; the more expensive labor, materials and equipment; and the contingency plans for periods with high rainfall.

SOURCE: Suzano