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Created on: 2019-06-07 11:40:25
Last update: 2020-11-22 00:00:00

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Klabin's Monte Alegre pulp mill. Photo: Wikimapia
Sector Pulp, Paper and Paperboard Mills
Headquarters
Ownership
listed on Brazil Stock Exchange

As of June 2019, Klabin's three largest shareholders are Monteiro Aranha (7.97%), The Bank of New York (7.45%) and BNDES (6.82%).

Subsidiaries
Website https://www.klabin.com.br/en/

About Klabin

Klabin, founded in 1899, is the largest paper producer, exporter and recycler in Brazil, and the country's second largest pulp producer. Klabin owns four pulp mills: the Correia Pinto Mill, the Otacílio Costa Mill, the Telemaco Borba/Monte Alegre mill and the Puma mill. Its total pulp capacity is 3.1 million tonnes a year.

In 2016, Klabin opened its Puma mill, which has a total capacity of 1.5 million tonnes per year and is located on the Tibagi river, downstream from the company's Telemaco Borba mill. In 2018 the company started to prepare for the development of a new mill, Puma II, on this site.

What must happen

Banks and other investors should refrain from financing the Puma II project and from providing further financial support to Klabin until it:

  • Publishes an Environmental Impact Assessment for Puma II, that includes an evaluation of the impact of the expansion of monoculture plantations, that will be driven by this project, as well as an analysis of the cumulative impacts caused by the planned mill and the two already existing mills at the Tibagi river;
  • Publishes a detailed plan for the prevention, mitigation and compensation of environmental and social impacts;
  • Provides information about the Free Prior and Informed Consent (FPIC) process for affected communities, covering both the project and the impact mitigation and compensation plans;
  • Publishes geo-referenced maps of identifying where it will source timber from; and
  • Commits to only use Totally Chlorine Free (TCF) bleaching technology with closed water cycle.

Why this profile?

Klabin is planning to build a large pulp mill, Puma II, in the state of Paraná in Brazil, requiring some 100,000 hectares of plantations. The company has not provided any information on what timber it will source or what communities may be affected.

Impacts

Social and human rights impacts

Project affected communities Klabin is planning to build a new mill, Puma II, in the state of Paraná, which will have a capacity of almost one million tonnes per year. The company has not made and Environmental Impact Assessment for the Puma II pulp mill, even though the project will almost double the capacity of the mill. No information was found regarding public consultation for this project, neither on Klabin's website, nor in that of the state's licensing agency IAP (as of June 2019).

There are several indigenous lands within the proximity of the Puma mill, which could be impacted by the expasion of the plantations. The company has not yet provided information about its process for seeking the Free Prior and Informed Consent (FPIC) for affected communities.

Environmental and climate impacts

No Environmental Impact Assessment for Puma II pulp mill In April 2019 Klabin obtained an installation license for Puma II, without having done an Environmental Impact Assessment. Puma II pulp mill will require approximately 100,000 hectares of eucalyptus and pine plantations. Since the company argues this is an expansion of its existing mill, Klabin did not make an Environmental Impact Assessment for the project, although it will almost double the capacity of the mill. In the Preliminary Environmental Report it does not provide any detailed information on where it will source the required fibre from.

The new pulp line and paper machines will be located on the Tibagi river, where already two other Klabin mills are located. The Preliminary Environmental Report does not provide any detailed information on where the mill will source the required timber from, and also does not analyse the cumulative impacts of these three mills.

Other impacts

In 2017, Klabin issued USD 500 million of green bonds, followed by another USD 500 million in 2019. These bonds are marketed as providing an opportunity for investors to finance "green" projects. However, a study by EPN (2019) found that these bonds were largely used to finance business as usual activities such as "sustainable forest management", which includes the management of plantations and the acquisition of wood to feed the mill, and that they do not initiate a change towards a sustainable economy, but at best only make existing practices less harmful to the environment.

Governance

Bank policies

The following bank investment policies apply to this project:
Citi
csr policies
2013-12-31 00:00:00

Sustainable Forestry Standard

2013-12-31 00:00:00 | Citi

Financiers

In November 2018 Klabin established financing via a revolving credit facility amounting to USD 1.1 billion (International Financing review). In the first quarter of 2019 Klabin contracted a five year revolving credit facility of USD 500 million (Klabin Q1 2019 Report). In addition, several financial institutions have provided underwriting services to the company, see below for more details.

In October 2019 IDB Invest led a USD 800 million loan to Klabin meant for financing Klabin's Puma II project. IDB Invest financed USD 180 million. A group of financial institutions - IFC, China Cofinancing Fund, IFC MCPP, Santander, Rabobank, HSBC, Sumitomo Mitsui Banking Corporation, Crédit Agricole, BNP Paribas, Sumitomo Mitsui Trust Bank, KEB Hana - co-financed USD 620 million. See below for more details.

News

| |
Type:
Year:
blog
external news
our news

Two sides of the same coin: How the pulp and paper industry is profiting from deforestation in the Amazon rainforest

Agriculture and cattle ranching are the notorious drivers of deforestation in the Brazilian Amazon. But the cattle and soy industry are only one side of the coin, with pulp & paper companies refusing to carry the blame because they do not directly burn the land – other industries do that for them. In Brazil, pulp & paper companies Suzano, Eldorado Brasil and Klabin own the largest pulp mills and should face their responsibilities for the destruction of the Amazon forest.
2020-09-22 | Environmental Paper Network
blog
external news
our news

Two sides of the same coin: How the pulp and paper industry is profiting from deforestation in the Amazon rainforest

2020-09-22 | Environmental Paper Network
blog
external news
our news

Klabin projeta investimento de R$ 4,7 bilhões em 2020

Klabin plans to invest BRL 4.7 billion in 2020
2019-11-22 | Brazil | sunoresearch
blog
external news
our news

IDB Invest Leads $800 Million Financing to Klabin and Supports Growth and Improved Productivity of Brazil's Pulp and Paper Industry

2019-10-31 | Brazil | EPN, IDB Invest
blog
external news
our news

Setor florestal estima investir R$ 32 bilhões até 2023

Forestry sector estimates USD 5,7 billion investment till 2023
2019-09-27 | Brazil | EPN, Global
blog
external news
our news

Klabin closes second TIMO deal in seven months; to promote forestry expansion

2019-07-30 | Brazil | Risi
blog
external news
our news

Klabin recebe licença de instalação do Projeto Puma II

Klabin obtains installation license for Puma II project
2019-04-26 | Brazil | Klabin press release
blog
external news
our news

UE dá aval e fusão de Suzano e Fibria fecha em janeiro

Antitrust authorities allow Suzano - Fibria merger, on the condition that the 900,000 tonnes a year trade deal between Fibria and Klabin is ended.
2018-11-30 | Brazil | Valor
blog
external news
our news

Klabin fará novas operações para alongar a dívida

2018-11-30 | Brazil | Valor
blog
external news
our news

Em Ortigueira: IAP realiza audiência pública para conceder licença da fábrica da Klabin

2012-07-02 | Brazil | Government of Ortigueira

Documents

Type:
Year:
correspondence
2020-11-22 00:00:00

Letter from Forests & Finance to JPMorgan Chase on JPMorgan Chase' forest-risk financing

2020-11-22 00:00:00 | Forests & Finance
correspondence
2020-11-22 00:00:00

Letter from Forests & Finance to BNP Paribas on BNP Paribas' forest-risk financing

2020-11-22 00:00:00 | Forests & Finance
ngo documents
2019-05-01 00:00:00

Industrial Tree Plantations and Green Bonds

2019-05-01 00:00:00 | EPN
company documents
2019-05-02 00:00:00

Klabin Q1 2019 Report

2019-05-02 00:00:00 | Klabin
csr policies
2019-08-01 00:00:00

Code of conduct

Date listed represents date as accessed on website
2019-08-01 00:00:00 | Klabin
csr policies
2019-08-01 00:00:00

Sustainability policy

Date listed represents date as accessed on website
2019-08-01 00:00:00 | Klabin
ngo documents
2019-05-14 00:00:00

Green bonds used to finance damaging industrial tree plantations

2019-05-14 00:00:00 | Environmental Paper Network
company documents
2017-08-30 00:00:00

Klabin Green Bond - Second Opinion by Sustainalytics

2017-08-30 00:00:00 | Sustainalytics
company documents
2019-03-27 00:00:00

Relatório Ambiental Preliminar da Ampliação da Unidade Puma

2019-03-27 00:00:00 | Klabin

Media

Overview of Puma II pulp mill

Location of the planned new Puma II pulp line

Links

Klabin's sustainability reports

http://rs.klabin.com.br/

Environmental Licensing page of IAP

http://www.iap.pr.gov.br/paginas-99.html

SPOTT - ESG policy transparency assessments

https://www.spott.org/timber-pulp/klabin-sa/

IDB invest on Puma II

https://www.idbinvest.org/en/projects/puma-ii

IFC on Puma II

https://disclosures.ifc.org/#/projectDetail/ESRS/42138

IFC on Puma I

https://disclosures.ifc.org/#/projectDetail/ESRS/31903

JICA on Puma II

https://www.jica.go.jp/english/our_work/social_environmental/id/america/brazil/c8h0vm0000f70io1.html

Business & Human Rights Resource Centre

https://www.business-humanrights.org/en/klabin

FSC Watch

https://fsc-watch.com/
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