According to Leonardo Grimaldi, commercial director of pulp at Suzano, the global fluff pulp market has growth potential, but its production is currently concentrated in three large U.S. companies, which justifies Suzano’s new investment in this type of fiber.
Grimaldi forecasts that this market will grow by 4.2% annually until 2027, driven by increasing demand for urinary incontinence products and rising consumption in the Asian market. Currently, just three U.S. companies account for 80% of global supply.
In 2016, Suzano launched the world’s first fluff pulp made from eucalyptus fiber, called Eucafluff, and recently announced a R$490 million investment to increase its installed production capacity from 100,000 to 440,000 tons of fluff per year.
“There were doubts [about using short fiber for fluff], but we overcame them. We are positioned with the lowest cash cost of production in the world,” Grimaldi said during Suzano Day. As for long fiber, which still predominates in fluff production, the executive added that short fiber offers cost advantages and that some Suzano customers are already using 100% Eucafluff in their products.
According to Walter Schalka, president of Suzano, between 30% and 40% of the fluff market is expected to be composed of cellulose produced from short fiber rather than long fiber in the future. “This represents a great opportunity for growth,” he said.
CASH COST SHOULD DECREASE IN THE 4TH QUARTER
According to Aires Galhardo, Suzano’s pulp operating director, in recent years, the company has invested in structural competitiveness, which has led the company to reduce its cash cost of production, as reflected in the results of the third quarter of the year.
According to the executive, the recent investment in the modernization of the pulp mill’s boiler in Jacareí, in the interior of São Paulo, has generated reductions in cash cost, which has been reflected in the results of the third quarter of 2023. During that period, Suzano’s cash cost of market pulp production was R$ 861 per ton, a decrease of 2% compared to the previous year.
“The investment in the new biomass boiler in Aracruz (Espírito Santo) will contribute to lower cash cost and maintenance investments in the future,” he said. For the fourth quarter, a single-digit reduction in cash cost is expected compared to the third quarter.
According to Galhardo, the Cerrado Project in Ribas do Rio Pardo, Mato Grosso do Sul, has evolved as planned. In this sense, the projected cash cost for the unit under construction remains at R$ 400 per ton in the long term, according to the executive.
Suzano is expected to complete the learning curve of the Cerrado Project in nine months, producing 2 million tons of eucalyptus pulp in the first 12 months of operation. The new unit is expected to be completed by June 2024.