May 5, 2016

• The operation was approved within the scope of the Incentive Program for the Fixed-income Market

The Brazilian Development Bank (BNDES) approved financing for Fibria-MS Celulose Sul Mato-Grossense, in the amount of R$ 2.3 billion to implement a new production line for whitened eucalyptus pulp in the city of Três Lagoas (MS),  with a nominal capacity of 1,750 tons/year. The project includes acquiring wagons, locomotives as well as nationally-produced machinery and equipment, besides social investments in areas affected by the company.

With a total investment of R$ 8.7 billion, the project aims to expand the production capacity of the industrial plant at Três Lagoas by more than 135% and the company by close to 33%.

As part of the funding for the project, Fibria-MS will use the Agribusiness Receivable Certificates (CRAs), issued in a total amount of R$ 675 million in October 2015. With this, the company was able to make use of the Incentive Program for the Fixed-income Market, which aims at fostering Brazil’s capitals market.

The BNDES created the program in 2015 to motivate large companies to issue fixed-income securities linked to investment projects receiving financing from the BNDES which, then, have access to a larger portion of credit at long-term interest rates (TJLP, currently at 7.5% p.a.)

This is the second credit operation the BNDES has approved within the scope of the Incentive Program for the Fixed-income Market.

Fibria-MS Celulose Sul-Mato-Grossense is a subsidiary of Fibria Celulose S.A, the world’s largest producer of whitened eucalyptus pulp and the only Brazilian company in the paper and pulp sector that is listed on BM&FBOVESPA’s New Market.

The new production line should be operational in the last quarter of 2017, creating 800 new jobs in areas such as support, industry and forest activities. During construction, works will generate close to 40,000 direct and indirect jobs, as well as 890,000 hours in training for skilled professionals.

With one of the lowest production costs in the world, investments will provide the most modern technology available in the market to produce pulp and will be self-sufficient in electric energy, with the capacity to generate more than it actually uses.

Transport logistics for pulp after the expansion will involve three different areas working together (highways, railways, and ports), to make it possible to transport the pulp form the plant to the end customer via the Port of Santos, from where the product will be exported.

The project also entails social investments of R$ 11.7 million, aiming mainly at health, education and generating income, including the expansion of the Rural Territorial Development Program (PDRT), created in 2010, to organize relations with local rural communities in the surrounding areas of the company’s forests and which is currently the main tool for relations between Fibria and neighboring populations.