Suzano Papel e Celulose Board Approves Next Phase of the 1.0
Million Tons/Year Pulp Expansion Project
Start-up in the Third Quarter 2007
SAO PAULO, Brazil, Oct. 25 /PRNewswire/ -- Today Suzano Bahia Sul Papel e
Celulose S.A. ("Suzano") (Bovespa: SUZB5), one of Latin America's largest
integrated producers of paper and pulp, announced that its Board has approved
the feasibility and basic engineering studies for its project to expand pulp
production at its unit at Mucuri (in the Brazilian state of Bahia) by 1.0
million tons/year. The Board authorized the Executive Officers to begin
commercial negotiations with suppliers and for structuring of financing,
comprising BNDES (Brazilian Development Bank), where the project has already
been pre-qualified. After receiving and analyzing commercial proposals from
suppliers, the Board will make its final decision on the project
implementation.
Project highlights: * Additional capacity of 1.0 million tons/year -- including preparation for an
increase of the expansion to 1.1 million tons/year without additional capex,
and subsequently to 1.25 million tons/year with only marginal investment.
* Total estimated capex: US$1.28 billion.
* Start-up in the third quarter 2007.
Suzano's CEO Murilo Passos commented: "This new and highly important step in
the company's growth will transform it into a global player in market pulp --
we will be among the world's 10 largest producers and among those with the
lowest production cost in the world. Our production scale will be compatible
with the market's needs. This project has already been pre-qualified at BNDES,
and we expect to have the support of other financing sources, bringing us
appropriate funding for projects of this magnitude. We are confident that the
project has one of the highest returns worldwide, and that it will place Suzano
among the most competitive companies in the global pulp industry." This project will be addressed during the 3rd quarter 2004 earnings conference
call: Suzano's Conference Call: Slide/audio webcast via http://www.suzano.com.br/ In Portuguese:
25 October - 10 am (Brasilia time)
Access: 5511 2101 0099
Replay: 5511 2101 1490 In English:
25 October - 11 am (New York time)
Access: 1 973 582 2757
Replay: 1 973 341 3080 PIN 5289655 Main Project Characteristics
Capacity
Suzano considered various alternatives in terms of capacity before deciding in
favor of the proposal for 1.0 million tons/year -- which includes the basis for
a further expansion to 1.1 million tons/year without additional capital
expenditure, and potential for expansion to 1.25 million tons/year, with
marginal additional capex.
Timetable and capital expenditure Estimated capital expenditure is US$1.28 billion, on the following timetable: US$ million 2004- 2005 2006 2007 2008-2011 Total
Capex 15% 60% 22% 3% 100% Planned production levels: 200 thousand tons in 2007; 900 thousand tons in
2008; 1.0 million tons in 2009.
Final approval of the evaluation of commercial proposals and negotiation of
financing contracts is timetabled for the first half of 2005, and construction
is timetabled to begin in the second half of 2005.
Sources of funding The project will be funded as follows: between 40% and 50% from the company's
own funds, and between 50% and 60% from project financing lines with
amortization schedules and rates appropriate for projects of this magnitude. The main source of financing will be BNDES, where the project has already been
pre-qualified. We will also have the support of other financing agents.
Suzano Papel e Celulose is one of the largest fully integrated producers of
pulp and paper in Latin America, with pulp production capacity of 1.1 thousand
tons/year and paper production capacity of 820 thousand tons/year. It offers a
broad range of pulp and paper products for the domestic and international
markets, with a leadership position in key Brazilian markets. It has four
principal product lines: (i) eucalyptus pulp; (ii) uncoated woodfree printing
and writing paper; (iii) coated woodfree printing and writing paper; and (iv)
paperboard.
Forward-looking statements Certain statements in this document 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 future
demand for the Company's products, the final decision on starting construction
for the expansion, the aimed funding structure of the project, the capex
timetable, the final capacity of the project, changes in the factors which
affect domestic and international prices of the products, changes in the cost
structure, changes in seasonal market patterns, changes in prices charged by
competitors, exchange rate variations, or changes in the Brazilian political or
economic scenario, or in emerging and international markets in general. Investors are cautioned not to rely on these forward-looking statements in
making decisions.
Contacts:
Investor Relations: / phone: 55-11-3037-9061
Gustavo Poppe / Cesar Romero / Fernando Mearim / Rosely D' Alessandro / Simone
Capersmidt Press: GWA Comunicacao Integrada - / 5511-3816-3922 Fernanda Burjato / Regina
Maia Exports: DATASOURCE: Suzano Bahia Sul Papel e Celulose CONTACT: Investor Relations, Gustavo Poppe, or Cesar Romero, or Fernando Mearim, or Rosely D' Alessandro, or Simone Capersmidt, +011-55-11-3037-9061, or , all of Suzano; or press, Fernanda Burjato or Regina Maia, GWA Comunicacao Integrada, +011-5511-3816-3922, or ; or exports, Web site: http://www.suzano.com.br/
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