improving efficiency and controls at suzano · 6/30/2015 · improving efficiency and controls at...
TRANSCRIPT
Corporate Overview
Suzano is a forestry-based company, publicly traded, controlled by
Suzano Holding. Suzano operates in the pulp and paper businesses.
Controlling Group
Treasury
56%
2%
Free Float42%
4
Mucuri
Portocel
Vitória
Santos
Market Value: R$ 18.3 billion
Competitive Advantages
Forestry
Biotechnology
Eucalyptus cycle: 7 years
Pulp
Low production costs
Certified products
Energy self-sufficient
Diversified markets
Commercial strategy
Paper
Regional leader
Vertically integrated operations
Distribution
Maranhão
Limeira
SuzanoEmbu
Rio Verde
Forests
Ports
Mills
Itaqui Port
Capital Structure (June/15)
Diversified and Complementing Product Portfolio
Suzano’s products portfolio consists of market pulp, paperboard, uncoated paper and coated paper.
Note: Figures of last 12 months ending on 6/30/2015.
Other paper represented 1% of net revenue on the period.
6
Uncoated Coated
Net Revenues
64% Exports / 36% Domestic Market
R$ 8.7 billion
Market Pulp2nd eucalyptus market pulp producer
60%
Paper
40%
Printing and WritingPaperboard
Positioning on Pulp Segment
Pulp Production Capacity – Top 20¹
(million ton)
In 2015, the market pulp capacity¹ totalizes 63 million tons. The top 20 biggest producers represent 74% of the market.
Eucalyptus Pulp Production Capacity
(million ton)
Total: 46 million
tons¹
Total: 22 million
tons
1Includes Sotfwood, Hardwood, Unbleached and Sulphite; excludes mechanical pulp / ² Guaiba 2 total capacity
Source: Hawkins Wright (Jul/15) and Suzano
7
1,11,31,31,41,51,61,71,71,81,81,82,0
2,32,42,5
3,53,63,63,9
5,6
Canfor
Cenibra
Resolute FP
Sodra
Domtar
Mercer
Eldorado
Paper Excelence
IP
Weyerhaeuser
Metsa Group
Ilim
Georgia Pacific
Stora Enso
UPM-Kymmene
Suzano
APRIL
CMPC²
Arauco
Fibria
0,1
0,2
0,3
0,3
0,3
0,9
1,0
1,2
1,2
1,3
1,5
1,7
2,9
3,5
5,6
Grupo Orsa
IP
Lwarcel
Portucel
Mondi
Ence
Altri
UPM-Kymmene
Stora Enso
Cenibra
Arauco
Eldorado
CMPC ²
Suzano
Fibria
Suzano’s strategy
Structural Competitiveness
Maximize the return of our assets and cash flow generation
Benchmark in operational efficiency
Adjacent Business
Increase profitability through innovative businesses that innovate
and break paradigms
Reshaping of the Industry
Reduce the variability of the industry’s returns
11
Structural Competitiveness
Forestry
Logistics
Industrial
Commercial
Average distance reduction
Wood swap
Standardization and insourcing harvesting
Precision Forestry
Productivity increase
Retrofitting investments
Energy efficiency
Operational efficiency
Remove structural bottlenecks
Integrated logistics with synergy gains
New logistics modes
Customer focus
Price discipline
Expansion of client base
Service level improvement
12
Adjacent Businesses
13
FuturaGene Fluff
Lignin
First genetically modified clone
approved by CTNBio for
commercial purposes
Potential to increase
productivity by nearly 20%
First company in the world to use
hardwood to produce fluff
Capacity to replace up to 70% of
fluff to produce sanitary pads
and up to 30% for diapers
Replacement of petrochemicals with
renewable source
Can be used in several high value-
added applications
innovation
World Market Pulp Supply and Demand
Market Pulp Global Demand
(million tons)
Market Pulp Global Supply
(million tons)
Expectations of a scenario marked by supply and demand in balance. The growth in market pulp demand is driven by pulp
consumption in Asia, which has invested in non-integrated paper mills. Supply growth is driven by Latin America, the most
competitive region for pulp production
CAGR Supply 2009 – 2013 2014 - 2019e
North America +1.0% +0.1%
Europe +1.7% +1.2%
Asia +4.2% +4.7%
Latin America +5.7% +3.4%
Others* +1.5% +0.3%
Total +3.0% +2.2%
19
2 3 3 4
2027 29
353
4 4
5
18
18 18
187
6 6
6
50
58 60
67
2010 2014 2015e 2020e
CAGR Demand 2009 – 2014 2015e – 2020e
North America -2.6% -1.8%
Europe +0.2% +0.0%
Asia +8.2% +4.1%
Latin America +4.4% +2.7%
Others* +5.8% +2.9%
Total +3.8% +2.2%
1 1 1 18 9 9 12
1518 19
2314
14 15
1515
16 16
165259 60
67
2010 2014 2015e 2020e
North America
Europe
Latin America
Asia
Others*
Note: *Others includes Middle East, Oceania and Africa
Source: Poyry (2013)
11
Cash Cost in Pulp Production
New pulp projects are located in low-cost regions, most of them in South America
Cash Cost CIF / Europa
(US$/ton)
22
Low Cost High Cost High CostLow Cost
*Others includes New Zeland, Argentina, China and South Africa
Source: Hawkins Wright (Jul/15)
800
400
0
Chile
Japan
Fin
land
Easte
rn E
uro
pe
Oth
er
Euro
pe
West C
anada
Oth
er
World
Oth
er
Asia
Bel/F
raU
SA
Canada
Chin
a
Sw
eden
Fin
land
Chile
/Uru
guay
Iberia
Indonesia
Afr
ica
Russia
Bra
zil
Japan
Sw
eden
BC
Coast
East C
anada
US
A
13.8 Mt 12.4 Mt
Hardwood Softwood
18.9 Mt 13.7 Mt
Forestry Competitiveness in Brazil
Brazil presents competitive advantages to support continuous increase of its global forestry standing
Competitive Advantages - Brazil
• Availability of productive land
• Excellent soil and climate conditions
• Short harvesting cycle for planted forests
• Opportunity to recover degraded areas
• Low establishments and maintenance costs
Source: ABRAF – 2014.
5.5 adtm/ha/year 10.5 adtm1/ha/year
Biotechnology
1980 2014
+100%
• More wood / hectare
• More pulp / m³
• Superior quality
• Smaller area
• Decreasing costs / m³
Source: Suzano
Hardwood Productivity
(m3/ha/year)
Pulp Productivity
23
38
31
2522 20 19
1815
12
6 6
Brazil China Indonesia Australia Chile NewZealand
SouthAfrica
USA Portugal Finland Sweden
Stock Performance
Stock Performance - SUZB5
(100 basis: Jun/14 – Jun/15)
Daily Financial Volume – SUZB5
(R$ million)
6.574
8.990
11.279 12.486
2012 2013 2014 LTM*
SUZB5+99%
Ibovespa+0%
IBrX-50+1%
60
80
100
120
140
160
180
200
220
Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15
35
25
37
44
62
2012 2013 2014 LTM*
Daily Trade Number - SUZB5
(Trade number)
*Last twelve months ending on 6/30/2015.
Source: Bloomberg
Corporate IT Overview
Suzano has an SAP-based implementation dating back to 1998, but only recently merged all BUs into
one integrated ECC suite on HANA.
4
SAP BW
SAP CRM 7
SAP HANA
Simplify Forestry
Project Objectives
Understand business needs in
Nursery/Plantation, Harvesting,
Forestry Development,
Procurement, Wood Purchasing
and Overall Mobility in the field.
1
Propose solutions on SAP, leveraging
standard features and existing
processes.
2
Identification in opportunities
for added value and increased
simplicity (operational).
3
Simplify Forestry
Project Methodology
Project Drivers:
• Simplify System Interaction
• Automation and Information Made Available
• Standardization and Security
• Improve Information Management
• Boost productivity
• Improve planning tasks
"Simply Innovate"
Operational
Needs
Economically
Viable
Available
Technology
Manufacturing demand
Production plan informed
by industry.
Planning and Budgeting
Setting harvesting plans,
purchasing and collection
needs
Industry
Wood receipt and
industrial production.
UNF - Sao Paulo
UNF - Bahia
UNF - Maranhão
Productivity and Cost Management
Operational KPIs
Technological package
Recommendation for clones,
nutrition and chemical control.
Nursery
Seedlings planning and
production management
based on Forestry
Demand.
Inventory Management
Demand management,
purchasing and goods
receipt.
Forestry Plantation
Planning and execution of
deployment orders, renovation, drive
and maintenance.
Promotion & Wood Purchasing
Promotion and purchase
management for timber
harvesting.Maintenance
Control of events,
preventive and corrective
maintenance. Logistics
Wood transport for
industry.
Harvest & Exhaustion
Planning and execution
management of logging orders
Simplify Forestry
Overview
Quality control
S-Flor Simplify Forest - Case Details
User interface: Focusing on mobility solutions for forestry
confirmations. Budget calculation, tactical planning using
simulation (SAP BPC).
Proposed solution: Continue the use of PP module in a
simplified way to control forestry and real cost of management.
Optimizations
Reports
19
59
2
Workflows
1 2
Mobility
Interfaces
Among the main proposed solutions:
• Creating simulator, using SAP BPC for generating budget, YP and Rolling
Forecast.
• Use of a single production order by stage to perform operations and
consumption of materials and quality control.
• Monitor planned and actual costs (and variances) directly in the production
order.
• Records of Production Areas in installation locations with integration of
master data and processes with Zenith.
• Nursery: Seedling quality control and notes for the operator to control
productivity.
Involved SAP modules:
SAP ERP-PP, ERP-PM, ERP-QM, SAP-BPC, SAP SMP
Process
FORESTRY & NURSERY
Involved systems: SAP / GIS / Zenith / Mobility (SAP SMP)
Requirements by Type
S-Flor Simplify Forest - Case Details
User interface: Focusing on mobility solutions for confirmation;
Simplification of wood movements and asset exhaustion in SAP
ECC.
Proposed solution: Implementation of integrated mobility solutions
with SAP, greater efficiency in the availability of data management
and reliability improvements for calculations (eg. Exhaustion)
Among the main proposed solutions:
• Solution deployment for mobility, adding better validation controls
and integrated directly with SAP (online and offline).
• Adjustments for Pre-Harvesting Inventory and production awards.
• Use of SAP QM for measurements and data collection for SPC.
• Improvements in calculations and cockpit efficiency Exhaustion.
• Increasing the speed for management data availability.
Process
HARVESTReports
13
52
1
Workflows
1 5
Mobility
Interfaces
Involved systems: SAP / GIS / Zenith / Mobility (SAP SMP)
Involved SAP modules:
SAP ERP-PP, ERP-PM, ERP-QM, SAP-BPC, SAP-SMP, SAP-DMS
Requirements by Type
Optimizations
S-Flor Simplify Forest - Case Details
ReportsWorkflows
Interfaces
19
1
13 4
Mobility
User interface: Use of mobile interface to simplify services
confirmation and receiving / consumption of raw materials and fuel.
Approval Center (Fiori)
Proposed solution: Automate operations with greater use of MRP
to purchase MRO and Supplies parts. Increased integration with PP
and PM module. Increased use of SAP Master Data improving
purchase history.
Among the main proposed solutions:
• SAP MRP Shopping for MRO and Supplies.
• Use of service registration DIEN enabling integration with Prod.
Order to improve procurement management / taxes.
• Schedule Agreements and automation.
• Integration with SAP PP and SAP PM.
Involved SAP modules:
SAP ERP-MM, SAP ERP-PP, SAP ERP-PM
Process
PROCUREMENT
Involved systems: SAP / Mobility (SAP SMP)
Requirements by TypeOptimizations
S-Flor Simplify Forest - Case Details
User interface: Use of mobility for technical visits, reports, services
and events. BI tools for management analysis.
Proposed solution: Greater efficiency in the process of prospecting /
contract through the system, alignment of processes with forestry /
harvesting and increase automation.
Reports
37
53
12
Workflows
6 5
MobilityInterfaces
Among the main solutions:
• Control for prospection, Letter proposal and contracts.
• Include Development in global planning processes (Simulation,
Budget, PB and RF).
• Automate processes in execution, accounting, compensation and
closing.
Involved SAP modules:
SAP ERP-FI, SAP ERP-MM, SAP-RE, SAP ERP-PP
Process
DEVELOPMENT & WOOD
PURCHASE
Involved systems: SAP / Mobility (SAP SMP)
Requirements by Type
Optimizations
S-Flor Simplify Forest - Case Details
Reports
18
14
0
Workflows
1 3
MobilityInterfaces
User interface: Mobility for pointing events and interventions.
Cockpit sending / receiving equipment for exterior renovation.
Hierarchies in the equipment records.
Proposed solution: Implement SAP PM module for maintenance
management, availability of machines, costs and supplies.
Among the main proposed solution set:
• Control of Production Breaks (duration and reasons).
• Notes maintenance in Mobile devices (online and offline).
• Preventive Maintenance Control.
• Automation for goods receipts for equipment and fuel
supply.
Involved SAP modules:
SAP ERP-PM, SAP ERP-QM
Involved systems: SAP / Mobility (SAP SMP)
Process of
MAINTENANCE
Requirements by TypeOptimizations
S-Flor Simplify Forest - Case Details
For each process, we evaluated the different reports and KPIs
used.
Part of the analysis work was the identification of the main sources of
information and the definition of un initial grouping of reports and
function indicators for base data.
BOOK MANAGEMENT, REPORTING AND
INDICATORS (AS-IS)
59Forestry / Nursery
14Maintenance
52Harvest
30Planning
TO-BE scenario:
• Workshops reviewed all the needs of the teams. The result
generated an extensive list of requirements. The list will be
reviewed / approved by IT staff in terms of business priority.
• From a technical point of view, we should analyze the
requirements to maximize the generation of basic views and
generate datamarts / views by specific area.
45Comptroller
53Development &Wood Purchase
Reports49%
KPI51%
81Priority 1
S-Flor Simplify Forest - Solution Map
NurseryProduction
demand Workflow
Management &
IndicatorsPlanning
Planning Forest
Registry
SAP Solution – Suzano Forestry
Forestry PlantationPlantation
Planning
Forestry &
Harvest
Technology
packageSimulators
Budget &
Versions
Capacity
Analysis
Own production &
Third Party
Production
(Phases)
Quality control
(seedlings)
Routing &
BOMs
Material
Requirements
Creating
Orders
Execution &
Confirmations
Development and
Wood Purchasing
Development
Planning
Prospecting &
Contract
Development -
Forestry
Development
- HarvestWood Purchase
Supplies Fuel
Inputs -
Forestry &
Nursery
MRO SeedlingsDirect
services
Maintenance
Services
HarvestCreating
Orders
Harvesting
Confirmation
Movement
Confirmation
Forest
Exhaustion
Production
Award
Maintenance Stops RenovationsCorrective
Maintenance
Preventive
Maintenance
Predictive
MaintenanceSupplies
Qu
ali
ty
Pla
nn
ing | M
ea
su
rem
ent | N
otifications
Simplify Forestry – Technical Solution Map
Strategic Planning & Analytics
Shipping & Materials
SAP MM
Operational
Maintenance
SAP PM
Production Planning &
Tactical
SAP PP / BPC
Document management
SAP DMS
Finance & Controlling
SAP FI / CO
Quality
SAP QM
Mobility
SAP SMP
Consolidation & Budget
SAP BPC
Analytics
SAP BO
Data Warehouse
SAP BWoH
Mobile
Legacy
REMSOFT GIS ZENITH* Partial Usage SAP SD / SAP WM
SGF* In Analysis: Deck of Use SAP S&OP
Forestry Assets
Suzano’s investment in R&D over many years allows the Company to expand its forestry assets to the northeast
region of Brazil
2015
Total area (k ha)¹ 1,064
Total planted area (k ha)² 522
Own planted area (k ha)¹ 438
Forest Partnership Program (k ha) 84
Own Preserved Area (k ha)¹ 462
Average Distance in Bahia (km)² 73
Average Distance in São Paulo (km)² 212
Average Distance in Maranhão (km)² 150
Base 6/30/20151 Own and leased areas2 Figures consider own, leased and third-parties areas
2015
Annual planting (k ha) 85
Planted seedlings / day (k) 276
Note: Both own and leased land can suffer variation up to 5% quarter over quarter.
The total amount can differ due to rounding.
8
Nursery in Mucuri
SAP Real Estate FX - Project Overview
Simplification of the forestry process in SAP Real Estate FX;
Aligning the new guidelines Suzano, with the implementation of a SAP system that allows managing the assets
of the company thoroughly, ensuring the reliability and traceability of information;
Centralized data management and generation KPIs enabling the direct management of processes;
Review processes for data cleansing; and
Cost reduction - competitiveness.
Payback 2.16 years
+ 6k real estate properties
+ 14k Production Units
Disclaimer
Certain statements in this presentation may constitute forward-looking
statements. Such statements are subject to known and unknown risks and
uncertainties that could cause the Company’s actual results to differ materially
from those set forth in the forward-looking statements. These risks include
changes in customer demand for the Company’s products, changes in raw material
costs, seasonal fluctuations in customer orders, pricing actions by competitors,
significant changes in the applicable rates of exchange of the Brazilian real against
the US dollar, and general changes in the economic environment in Brazil,
emerging markets or internationally.
2