Supervision - Site · Preparation Pöyry Silviconsult Engenharia Ltda. Supervision ABRAF Technical...

PreparationPöyry Silviconsult Engenharia Ltda.

SupervisionABRAF

Technical SupportFábio Nogueira de Avelar MarquesJoão Batista Rezende

Print run of 1,000 copies

A CD accompanying this edition contains the following digital files in pdf format:Yearbook 2011 – Base year 2010 (Portuguese and English versions)Yearbook 2010 – Base year 2009 (Portuguese and English versions)Yearbook 2009 – Base year 2008 (Portuguese and English versions)Yearbook 2008 – Base year 2007 (Portuguese and English versions)Yearbook 2007 – Base year 2006 (Portuguese and English versions)Yearbook 2006 – Base year 2005 (Portuguese and English versions)

Library of Congress Cataloging-in-Publication Data

A849a ABRAF. Anuário estatístico da ABRAF 2011 ano base 2010 / ABRAF. – Brasília: 2011. 130p. : il. color ; 21cm.

Acompanha 1 CD‑ROM Texto bilíngüe português‑inglês ISSN: 1980‑8550

1. Setor Florestal. 2. Florestas Plantadas. 3. Indicadores Estatísticos. I. Associação Brasileira de Produtores de Florestas Plantadas. II. Título.

CDD – 634.9568105CDU – 630:31(058)

The photographs reproduced in this publication were provided by member companies of ABRAF and published with permission.

ABRAF. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, facsimile or any system of information storage and retrieval, without the express written permission or reference to source of information. Retransmission by fax, email or other means which result in the creation of an additional copy is illegal. Although ABRAF take all measures to ensure the accuracy of the information presented in the Statistical Yearbook, no legal responsibility may be assigned to it from the information and opinions contained herein.

ABRAF – Associação Brasileira de Produtores de Florestas PlantadasSetor de Autarquias Sul, Quadra 1, Bloco N, Lotes 1 e 2, Edifício Terra Brasilis, Salas 503 e 504CEP 70070‑010 – Brasília‑DF – Fones: (61) 3224‑0108 / 3224‑0109 – Fax: (61) 3224‑0115www.abraflor.org.br – e-mail: [email protected]

IntroductIon

Growth resumption. This could be the synthesis of 2010 for the sector of Planted Forests in Brazil. With the end of the financial crisis of 2008 and consequent reduction of pulp, steel products and furniture exports, the scene is positive again.

In its sixth edition, the ABRAF Yearbook reports the main events of the year 2010 for the sector. Among them, the discussion around the review of the Forest Code in Congress and the completion of works by the Interministerial Working Group established by the Strategic Affairs Secretariat of the Presidency are important highlights. While the first is an effort to update legislation and harmonize environmental protection and socio-economic growth, the second provided guidelines for the formulation of a National Forest Plantation Policy by the Executive Power and fulfill the claims of the industry through the Chamber of Planted Forests / MAPA.

Challenges are also portrayed in this publication. The restriction of land purchases by foreigners directly affected sector companies that have foreign capital participation, for the most part. The immediate effect was the impossibility to acquire areas for expansion or project implementation. The total paralyzed or suspended investment amounts to more than $ 37 billion, to new forest areas and new industrial production units.

The complexity of granting environmental permits for new projects of planted forests has also contributed to a modest growth of 3.2% of new forest areas in 2010 compared to 2009. This issue is not new and has been permanently present in the sector agenda.

The complex protection of members’ interests is the very reason for ABRAF to be. In this sense, the affiliation of new companies to the organization in 2010 strengthened the presence and activity of political and strategic actions in the planted forest sector. Furthermore, it increased the representativeness of ABRAF, allowing greater visibility to the real extent of its contributions to the sustainable development of Brazil.

The purpose of sharing the records of 2010 is not an exercise of accountability. It is a supply of facts and data that can base decisions and provide parameters for legitimate businesses and public interest. After all, over 4.5 million jobs and a gross output of $ 51.8 billion were generated, and there is a huge potential yet to be developed.

The United Nations has chosen 2011 as the International Year of Forests and a conference on Climate Change will be held in 2012 in Rio de Janeiro. The event, called Rio + 20, will celebrate the 20th anniversary of Eco-92’s organization.

Brazil has a special chapter in this celebration. We are the only country whose name is inspired by a tree. Climate change, the pressure on native forests and future generations demand responses. And planted forests in Brazil have a green answer to the world economy.

Those who believe in the future plant trees. ABRAF goes beyond. Building the future lies in a performance based on sustainability, ethics and principles of democracy. These must be the roots of the forest sector in Brazil.

Brasília, May 10, 2011

ANtoNIo SergIo AlIpIoPresident of ABRAF

Board Structure

BOARD

president

Antonio Sergio AlipioVeracel Celulose S.A.

Vice presidents

Pulp & Paper João Comério – Suzano Papel e Celulose S.A.Wooden Panels Salo Davi Seibel – Duratex S.A.Metallurgy Mário de Sant´anna Jr. – Gerdau Aços Longos S.A. Independent Producers Sílvio Teixeira – Brookfield Collective Member companies Luiz Calvo Ramires Jr. – Associação Sul‑matogrossense de Produtores e

Consumidores de Florestas Plantadas – REFLORE

executive Director

Cesar Augusto dos Reis

TAX COUNCIL

Members

Pulp & paper Luciano Amaral Rodrigues – Cenibra – Celulose NipoBrasileira S.A.Wooden panels Germano Aguiar Vieira – Masisa Brasil Empreendimentos Florestais LtdaMetallurgy Elesier Lima Gonçalves – ArcelorMittal BionergiaIndependent producers Fábio Brun – RMS do Brasil

Alternate Members

Pulp & paper Francisco Bueno – CMPC Celulose do Brasil Wooden panels Hernon José Ferreira – Eucatex S.A. – Indústria e ComércioMetallurgy Alexandre Valladares Mello – V&M do Brasil Independent producers José Marcos de Freitas – Brazil Timber

ADVISORY BOARD

president

Antonio Sergio Alipio

Members

Carlos Augusto Lira AguiarFernando Henrique da Fonseca

ABrAF

Individual Member Companies – Companies

Arauco Forest Brasil S.A. | www.araucodobrasil.com.br

ArcelorMittal BioEnergia Ltda | www. arcelormittal.com.br

Bahia Specialty Cellulose | www.bahiaspeccell.com

Celulose Nipo‑Brasileira S.A. – CENIBRA | www.cenibra.com.br

CMPC Celulose do Brasil Ltda. | www.celuloseriograndense. com.br

Comfloresta Participações S.A. | www.brookfieldbr.com

Duratex S.A. | www.duratex.com.br

Eucatex S.A. Indústria e Comércio | www.eucatex.com.br

Fibria Celulose S.A. | www.fibria.com.br

Florestal Brasil S.A. | site em construção

Florestal Itaquari Florestamento e Reflorestamento Ltda. | www.gfplp.com

Floresteca Brasil Ltda. | www.floresteca.com.br

Gerdau Aços Longos S.A. | www.gerdau.com.br

International Paper | www.internationalpaper.com

Klabin S.A. | www.klabin.com.br

Lwarcel Celulose e Papel Ltda. | www.lwarcel.com.br

Masisa | www.masisa.com

Plantar S.A. | www.plantar.com.br

Ramires Reflorestamentos Ltda. | www.ramires.com.br

Rigesa Celulose, Papel e Embalagens Ltda. | www.rigesa.com.br

RMS do Brasil Adm. de Florestas Ltda. | www.resourcemgt.com

Stora Enso | www.storaenso.com.br

Suzano de Papel e Celulose S.A. | www.suzano.com.br

Timber Value Adm. de Ativos Florestais Ltda. | www.braziltimber.com.br

VALE | www.vale.com.br

Veracel Celulose S.A. | www.veracel.com.br

V&M Florestal Ltda. | www.vmtubes.com.br

Collective Member Companies – State Associations

ABAF – Associação de Produtores de Florestas Plantadas do Estado da Bahia | www.abaf.org.br

ACR – Associação Catarinense de Empresas Florestais | www.acr.org.br

AGEFLOR – Associação Gaúcha de Empresas Florestais | www.ageflor.com.br

AMS – Associação Mineira de Silvicultura | www.silviminas.com.br

APRE – Associação Paranaense de Empresas de Base Florestal | www.apreflorestas.com.br

ARETINS – Associação dos Reflorestadores do Tocantins

FLORESTAR SÃO PAULO | www.floresta.org.br

REFLORE/MS – Associação Sul‑Mato‑Grossense de Produtores e Consumidores de Florestas Plantadas | www.reflore.com.br

ChApter 1

PLAntEd ForEStS In BrAZIL

1.1 Area Planted with genera Eucalyptus and Pinus ......................................................................................................................................................22

1.2 ABRAF’s Member companies’ Area Planted with Eucalyptus and Pinus ..........................................................................................38

1.3 Planted Forests with Other Groups of Species .........................................................................................................................................................44

1.4 Planted Forests X Native Forests .............................................................................................................................................................................................46

ChApter 2

SILvIcuLturE oF PLAntEd ForEStS

2.1 General Outlook ....................................................................................................................................................................................................................................50

2.2 Sectoral Outlooks .................................................................................................................................................................................................................................52

2.3 Silviculture Highlights in 2010 ...................................................................................................................................................................................................57

2.4 Yearly Planted Area ..............................................................................................................................................................................................................................62

2.5 Forest Technology and Productivity ...................................................................................................................................................................................66

2.6 Investments ................................................................................................................................................................................................................................................71

ChApter 3

ForESt ProductS MArkEt

3.1 Main Products Derived from Planted Forests ............................................................................................................................................................79

3.2 Round Wood ............................................................................................................................................................................................................................................86

SuMMAry

ChApter 4

IMPortAncE oF PLAntEd ForEStS In BrAZIL

4.1 Forest Production Gross Value.................................................................................................................................................................................................96

4.2 Tax Collection ..........................................................................................................................................................................................................................................97

4.3 Employment Generation ...............................................................................................................................................................................................................98

4.4 Funding Mechanisms Available to the Forest Plantation Industry in Brazil ................................................................................100

4.4 FIRJAN Index of Municipal Development ..................................................................................................................................................................105

4.5 Environment ...........................................................................................................................................................................................................................................109

4.6 Social and Environmental Responsibility Programs ...........................................................................................................................................111

ChApter 5

MEthodoLogy notES

5.1 Area with Planted Forests in Brazil.....................................................................................................................................................................................118

5.2 Total Preservation Area Linked to Planted Forests .............................................................................................................................................122

5.3 Balance of Production and Consumption of Round Wood and Forest Products ................................................................123

5.4 Gross Value of Forestry Production (VBPF) ..............................................................................................................................................................124

5.5 Tax Collection .......................................................................................................................................................................................................................................124

5.6 Production and Consumption of Forest Products .............................................................................................................................................126

5.7 Commercial Balance of Forest Products ......................................................................................................................................................................126

5.8 Employment Generation ............................................................................................................................................................................................................127

5.9 Firjan Index of Municipal Development (IFDM) ..................................................................................................................................................129

List of Tables

Table 1.01 Forest plantations with Eucalyptus and Pinus in Brazil, 2005‑2010 ..................................................................................................................24

Table 1.02 Eucalyptus and Pinus forest plantations in the states of Brazil and of ABRAF’s member and non‑member companies, 2010 ..........................................................................................................................................................................................................25

Table 1.03 Total area of Eucalyptus and Pinus forest plantations of companies directly related to ABRAF (companies associated with ABRAF and companies affiliated to collective member companies), 2010 ....................26

Table 1.04 Evolution of the distribution of ABRAF’s individual member companies’ forest plantation areas with Eucalyptus and Pinus by type or property, 2009 and 2010......................................................................................................................................42

Table 1.05 Total area of forest plantations in Brazil by genus, 2010 .............................................................................................................................................44

Table 1.06 Characteristics and areas of forest plantations with other species groups in Brazil, 2009 and 2010 .................................45

Table 1.07 Distribution of forest plantation and native forest areas preserved by ABRAF’s individual member companies by state, 2009 and 2010 ...............................................................................................................................................................................................46

Table 3.01 Brazilian export evolution of planted forest products (US$ million) .............................................................................................................85

Table 3.02 Estimate of potential wood production of Eucalyptus and Pinus in Brazil, 2010 ...............................................................................86

Table 3.03 Round wood production by ABRAF’s individual associated companies, 2010 ....................................................................................89

Table 3.04 Brazilian consumption of round wood for industrial use by segment and species, 2010 ...........................................................90

Table 3.05 Round wood consumption of ABRAF’s individual associates, 2010 ...............................................................................................................91

Table 4.01 Estimated gross value of production in the forestry sector, according to the planted forests sector’s main production chains, 2009 and 2010 ...................................................................................................................................................................................96

Table 4.02 Estimated share of taxes collected by the segments associated with planted forests in Brazil, 2009 and 2010 ....................................................................................................................................................................................................................................................97

Table 4.03 Estimated number of direct and indirect job posts and Income Effect in the planted forests sector, 2010 ...........................................................................................................................................................................................................................................................98

Table 4.04 Number of job posts of the companies associated to ABRAF, 2010 ..............................................................................................................99

Table 4.05 Evolution of disbursements by the PROPFLORA program, 2005‑2010 .................................................................................................... 104

Table 4.06 Evolution of disbursements by the PRONAF ECO program, 2007‑2010 ................................................................................................ 105

Table 4.07 Participation of the planted forests segment in the protection of natural forests, 2010 ......................................................... 109

Table 4.08 Results of forest furtherance contracted with member companies of ABRAF, 2010 .................................................................. 111

Table 4.09 Results of the social programs promoted by companies associated to ABRAF, 2005‑2010 ................................................. 113

Table 4.10 Results of the health programs promoted by companies associated to ABRAF, 2005‑2010 ............................................... 113

Table 4.11 Results of the environmental programs promoted by companies associated to ABRAF, 2005‑2010 .......................... 114

Table 4.12 Results of the educational and cultural programs promoted by companies associated to ABRAF, 2005‑2010 ............................................................................................................................................................................................................................... 114

Table 4.13 Results of the PFNM production in areas of companies associated to ABRAF, 2005‑2010 .................................................. 115

LISt oF tABLES, chArtS, grAPhIcS And FIgurES

Table 5.01 Conversion factors used in the ABRAF statistical yearbook, 2010 ............................................................................................................... 123

Table 5.02 Estimates of tax collection by the plantation forests transformation segments, 2010 – Methodology 1 ....................................................................................................................................................................................................................................... 125

Table 5.03 Estimates of tax collection by the plantation forests transformation segments, 2010 – Methodology 2 ....................................................................................................................................................................................................................................... 126

Table 5.04 Factors for job posts generation calculated for forestry and for the steel, lumber, furniture and pulp and paper segments ................................................................................................................................................................................................................................. 127

Table 5.05 Estimate for the generation of job posts in the industrial segments linked to the forestry sector as a whole (planted and natural forests), 2010 ...................................................................................................................................................................... 128

Table 5.06 Estimate of the number of job posts in forestry and in the industrial segments linked to planted forests, 2010 ................................................................................................................................................................................................................................ 129

List of Charts

Chart 4.01 Summary of the main forestry funding programs offered by BNDES, 2010. ....................................................................................... 101

Chart 4.02 Summary of the major constitutional funds aimed at forestry funding, 2010 .................................................................................. 103

List of Graphics

Graphic 1.01 Distribution of forest plantation area in Brazil, by genus, 2010 ............................................................................................................................22

Graphic 1.02 History of forest plantation areas in Brazil, 2005‑2010 .................................................................................................................................................23

Graphic 1.03 Distribution of Eucalyptus and Pinus plantation areas in Brazil, 2010 ...........................................................................................................31

Graphic 1.04 Growth of area planted with Eucalyptus and Pinus by state, 2009‑2010 ....................................................................................................33

Graphic 1.05 Distribution of Eucalyptus plantation area by state, 2010 ........................................................................................................................................35

Graphic 1.06 Percentage increase in area planted with Eucalyptus by state, 2010 ...............................................................................................................35

Graphic 1.07 Distribution of area planted with Pinus by state, 2010 ................................................................................................................................................37

Graphic 1.08 Percentage increase in area planted with Pinus by state, 2009‑2010 ..............................................................................................................37

Graphic 1.09 Evolution of ABRAF’s member companies’ share in forest plantation areas, 2010 ............................................................................38

Graphic 1.10 Representativeness of ABRAF’s individual and collective member companies by state, 2010 ...............................................39

Graphic 1.11 Distribution of ABRAF’s individual and collective member companies’ planted area by state, 2010 ..............................39

Graphic 1.12 Distribution of ABRAF’s individual member companies’ planted are by state, 2010.......................................................................40

Graphic 1.13 Evolution of ABRAF’s individual member companies’ plantation area, 2005‑2010...........................................................................40

Graphic 1.14 Relative evolution of ABRAF’s individual member companies’ plantation areas by species, 2004‑2010 ...............................................................................................................................................................................................................................................................41

Graphic 1.15 Distribution of ABRAF’s individual member companies’ forest plantation areas with Eucalyptus and Pinus by industrial segment, 2010 ..........................................................................................................................................................41

Graphic 1.16 Distribution of ABRAF’s individual member companies’ forest plantation areas with Eucalyptus and Pinus by type or property, by state, 2010 ........................................................................................................................................43

Graphic 1.17 Evolution of the distribution of ABRAF’s individual member companies’ forest plantation areas with Eucalyptus and Pinus by type of property, 2005‑2010 .................................................................................................................................................43

Graphic 1.18 Evolution of the distribution of ABRAF’s individual member companies’ property modality, 2005‑2010 .................44

Graphic 1.19 Area of forest plantations and native forests preserved by ABRAF’s individual member companies by state, 2010 ......................................................................................................................................................................................................................................................47

Graphic 2.01 Evolution of the main Brazilian macroeconomic indicators, 2003 – 2010 ................................................................................................51

Graphic 2.02 Evolution of the yearly planted area with Eucalyptus and Pinus forests by individual companies associated to ABRAF, 2000‑2010 ......................................................................................................................................................................................................64

Graphic 2.03 Evolution of the total yearly planting area with Eucalyptus by type of formation (new planting, reestablishment and sprout)¹ by the individual companies associated to ABRAF, 2008‑2010 ..............................................65

Graphic 2.04 Evolution of the total yearly planting area by individual companies associated to ABRAF by planting category, 2005‑2010 ...............................................................................................................................................................................................................65

Graphic 2.05 Comparison of forest productivity between confers and hardwoods in Brazil¹ and selected countries, 2010 ...........................................................................................................................................................................................................................66

Graphic 2.06 Evolution of the Mean Annual Increment (MAI) of forest planting by individual companies associated to ABRAF, 2005‑2010 ......................................................................................................................................................................................................67

Graphic 2.07 Distribution of Brazil’s energy mix, 2010 ....................................................................................................................................................................................68

Graphic 2.08 Distribution of the biomass production in Brazil by installed capacity, 2010 ........................................................................................68

Graphic 2.09 Investments performed in forest and industrial activities by individual companies associated to ABRAF, 2009 and 200. ..........................................................................................................................................................................................................................71

Graphic 2.10 Participation of investments performed by individual companies associated to ABRAF, 2010 ............................................71

Graphic 2.11 Perspective of investment by companies associated to ABRAF in forest activities in the 2011‑2015 period ...........................................................................................................................................................................................................................72

Graphic 2.12 Distribution of the investment perspective for companies associated to ABRAF, 2011‑2015 ................................................72

Graphic 3.01 History of pulp production and consumption in Brazil, 2000‑2010 ................................................................................................................80

Graphic 3.02 History of paper production and consumption in Brazil, 2000‑ 2010 ...........................................................................................................81

Graphic 3.03 History of production and consumption of reconstituted panels in Brazil, 2000‑2010 ................................................................82

Graphic 3.04 History of production and consumption of plywood in Brazil, 2000‑2010 ..............................................................................................83

Graphic 3.05 History of sawn wood production and consumption in Brazil, 2000‑2010 ..............................................................................................84

Graphic 3.06 Trade balance evolution of planted forest products in Brazil, 2000‑2010 ..................................................................................................85

LISt oF tABLES, chArtS, grAPhIcS And FIgurES

Graphic 3.07 Breakdown of sustained production of forest plantations by genus, 2010 ...............................................................................................87

Graphic 3.08 Sustained production estimate of Eucalyptus and Pinus plantations by region, 2010 ...................................................................87

Graphic 3.09 Breakdown of potential wood production by region in Brazil, 2010 ..............................................................................................................88

Graphic 3.10 History of annual round wood production for industrial use in Brazil, 2001‑2010 ...........................................................................88

Graphic 3.11 Evolution of round wood production by ABRAF’s individual associates, 2005‑2010 .....................................................................89

Graphic 3.12 Round wood consumption share by segment, 2010 ....................................................................................................................................................90

Graphic 3.13 History of round wood consumption by genus, 2010 .................................................................................................................................................91

Graphic 3.14 History of round wood consumption of ABRAF’s individual member‑companies, 2005‑2010.............................................92

Graphic 3.15 Breakdown of round wood consumption of ABRAF’s member‑companies by origin, 2010 ...................................................92

Graphic 4.01 Number of job posts created (employees hired, fired and balance) in the forestry sector in Brazil, 2000‑2010 ........................................................................................................................................................................................................................................99

Graphic 4.02 FIRJAN Index of selected capitals and cities involved with forestry ............................................................................................................ 106

Graphic 4.03 Proportion of world forests certified by an accreditation agency, 2010 .................................................................................................. 110

Graphic 4.04 Evolution of certified forests in the world, 1996‑2010 ............................................................................................................................................. 110

Graphic 4.05 Evolution of the number of contractors, beneficiaries and the planted area in the furtherance programs of ABRAF associates – new (in each respective year) and cumulative, 2005‑2010 ............................................ 112

List of Figures

Figure 1.01 Area and distribution of Eucalyptus forest plantations in Brazil, 2010 ..........................................................................................................27

Figure 1.02 Area and distribution of Pinus forest plantations in Brazil, 2010 ........................................................................................................................28

Figure 1.03 Area and distribution of forest plantations in Brazil, 2010 ........................................................................................................................................29

Figure 1.04 Schematic distribution of the main forest stands by region of the country, 2010 .............................................................................30

Figure 1.05 Area and distribution of Eucalyptus and Pinus forest plantations in Brazil, 2010 ...............................................................................32

Figure 1.06 Area and distribution of Eucalyptus forest plantations in Brazil, 2010 ..........................................................................................................34

Figure 1.07 Area and distribution of Pinus forest plantations in Brazil, 2010 ........................................................................................................................36

Figure 2.01 Evolution of the Brazilian Forest Business ................................................................................................................................................................................52

Figure 2.02 Main driving forces in the new economic order ...............................................................................................................................................................53

Figure 2.03 Diagram with the concepts of yearly planted area and total of planted forests .................................................................................63

Figure 3.01 Simplified model for the forest sector productive chain ..........................................................................................................................................76

Figure 3.02 Destination of the forest sector projects, 2010 ...................................................................................................................................................................78

Figure 3.03 Current location of the main industrial regions in Brazil – Eucalyptus ........................................................................................................79

LISt oF AcronyMS

List of Symbols and Units

§ Paragraph

% Percentage

p.a. Per Year

ha Hectares

m³ Cubic Meter

m³/year Cubic Meter per year

m³/year.ha Cubic Meter per hectare year

mdc Meter charcoal

No. Number

R$ Brazilian Real

t Ton

US$ American Dollar

List of Acronyms

ABIMCI Associação Brasileira da Indústria de Madeira Processada Mecanicamente (Brazilian Association for Mechanically Processed Timber)

ABIMOVEL Associação Brasileira das Indústrias de Mobiliário (Brazilian Association of Furniture Industries)

ABIPA Associação Brasileira da Indústria de Painéis de Madeira (Brazilian Association of the Wood Panel Industry)

ABRAF Associação Brasileira de Produtores de Florestas Plantadas (Brazilian Association of Planted Forest Producers)

AC Estado do Acre (State of Acre)

ACR Associação Catarinense de Empresas Florestais (Forest Companies Association of Santa Catarina)

AFUBRA Associação dos Fumicultores do Brasil (Tobacco Growers Association of Brazil)

AGEFLOR Associação Gaúcha de Empresas Florestais (Forest Companies Association of Rio Grande do Sul)

AGU Advocacia‑Geral da União (Attorney General’s Office)

ALICEWEB Sistema de Análise das Informações de Comércio Exterior (Foreign Trade Information Analysis System)

AMS Associação Mineira de Silvicultura (Silviculture Association of Minas Gerais)

ANEEL Agência Nacional de Energia Elétrica (National Agency of Electrical Energy)

AP Estado do Amapá (State of Amapa)

APABOR Associação Paulista de Produtores e Beneficiadores de Borracha (Association of Rubber Producers and Processors of São Paulo)

APP Área de Preservação Permanente (Permanent Preservation Area)

APRE Associação Paranaense de Empresas Florestais (Forest Companies Association of Paraná)

ARETINS Associação dos Reflorestadores do Tocantins (Association of Reforesters of Tocantins)

art Artigo (Article)

ASIBRAS Associação de Siderúrgicas do Brasil (Steelmakers Association of Brazil)

BA Estado da Bahia (State of Bahia)

BASA Banco da Amazônia (Bank of the Amazon)

BB Banco do Brasil (Bank of Brazil)

BCB Banco Central do Brasil (Brazilian Central Bank)

BNB Banco do Nordeste do Brasil (Bank of Northeast Brazil)

BNDES Banco Nacional de Desenvolvimento Econômico e Social (Brazilian National Bank for Social and Economic Development)

BRACELPA Associação Brasileira de Papel e Celulose (Brazilian Pulp and Paper Association)

CAGED Cadastro Geral de Empregados e Desempregados (General Register of Employed and Unemployed)

CEFLOR Programa Brasileiro de Certificação Florestal (Brazilian National Forest Certification Program)

CEMIG Companhia Energética de Minas Gerais S.A. (Energy Company of Minas Gerais)

CGU Controladoria‑Geral da União (Comptroller General of the Union)

CMN Conselho Monetário Nacional (National Monetary Council)

CNI Confederação Nacional da Indústria (National Confederation of Industry)

COFINS Contribuição para o Financiamento da Seguridade Social (Social Security Financing)

COP 16 Conferência das Partes da Convenção Quadro das Nações Unidas sobre Mudanças Climáticas (Conference of the Parties to the United Nations Framework Convention on Climate Change)

CSA Canadian Standard Association

DOU Diário Oficial da União (Official Gazette)

E&R Educação e Renda (Education & Income)

EGP Edge Glued Panel

EMBI+ Emerging Markets Bond Index Plus

EMBRAPA Empresa Brasileira de Pesquisa Agropecuária (Brazilian Agricultural Research Corporation)

ES Estado do Espírito Santo (State of Espírito Santo)

FCO Fundos Constitucionais de Financiamento do Centro‑ Oeste (Midwest Constitutional Financing Fund)

FIP Fundo de Investimento em Participações (Private Equity Fund)

FNE Fundos Constitucionais de Financiamento do Nordeste (Northeast Constitutional Financing Fund)

FNO Fundos Constitucionais de Financiamento do Norte (North Constitutional Financing Fund)

FSC Forest Stewardship Council

GO Estado de Goiás (State of Goiás)

HDF High Density Fiberboard

IABr Instituto Aço Brasil (Brazil Steel Institute)

IBAMA Instituto Brasileiro do Meio Ambiente (Brazilian Institute of Environment)

IBGE Instituto Brasileiro de Geografia e Estatística (Brazilian Institute of Geography and Statistics)

IBPT Instituto Brasileiro de Planejamento Tributário (Brazilian Institute of Tax Planning)

ICMS Imposto sobre Circulação de Mercadorias e Serviços (Goods and Services Tax)

IDEB Índice de Desenvolvimento da Educação Básica (Basic Education Development Index)

IDH Índice de Desenvolvimento Humano (Human Development Index)

IEA Instituto de Economia Agrícola de São Paulo

IFDM Índice FIRJAN de Desenvolvimento Municipal (FIRJAN Municipal Developemtn Index)

LISt oF AcronyMS

IFN Inventário Florestal Nacional (National Forest Inventory)

IMA Incremento Médio Anual (Mean Annual Increment)

INCRA Instituto Nacional de Colonização e Reforma Agrária (National Institute of Colonization and Agrarian Reform)

IOF Imposto sobre Operações Financeiras (Tax on Financial Operations)

IPCA Índice Nacional de Preços ao Consumidor Amplo (National Index of Consumer Prices Wide)

IPEA Instituto de Pesquisa Econômica Aplicada (Institute of Applied Economic Research)

IPI Imposto Sobre Produtos Industrializados (Tax on Industrialized Products)

IRPJ Imposto de Renda de Pessoa Jurídica (Income Tax of Legal Entities)

ISS Imposto Sobre Serviços (Tax on Services)

ITR Imposto sobre a Propriedade Territorial Rural (Tax on Rural Property)

KLE KL Energy Corporation

KW Kilowatt

LULUCF Land Use, Land-Use Change and Forestry

MA Estado do Maranhão (State of Maranhão)

MAPA Ministério da Agricultura, Pecuária e Abastecimento (Ministry of Agriculture, Livestock and Food Supply)

MDA Ministério do Desenvolvimento Agrário (Ministry of Agrarian Development)

MDF Medium Density Fiberboard

MDIC Ministério do Desenvolvimento Indústria e Comércio (Ministry of Development, Industry & Commerce)

MDL Mecanismo de Desenvolvimento Limpo (Clean Development Mechanism)

MDP Medium Density Particleboard

MG Estado de Minas Gerais (State of Minas Gerais)

MMA Ministério do Meio Ambiente (Ministry of the Environment)

MP Medida Provisória (Provisional Presidential Decree)

MRV Mensuração, Reportabilidade e Verificação (Measurement, Reporting and Verification)

LISt oF AcronyMS

MS Estado do Mato Grosso do Sul (State of Mato Grosso do Sul)

MT Estado do Mato Grosso (State of Mato Grosso)

MTE Ministério do Trabalho e Emprego (Ministry of Labor and Employment)

NAMA Ações de Mitigação Nacionalmente Apropriadas (Nationally Appropriate Mitigation Actions)

NCM Nomenclatura Comum do Mercosul (Mercosur Common Nomenclature)

ONU Organização das Nações Unidas (United Nations Organization)

OSB Oriented Strand Board

P&D Pesquisa e Desenvolvimento (Research and Development)

PA Estado do Pará (State of Pará)

PASEP Programa de Formação do Patrimônio do Servidor Público (Civil Service Asset Formation Program)

PEFC Programme for the Endorsement of Forest Certification

PEVS Produção da Extração Vegetal e da Silvicultura (Extraction Plant Production and Silviculture)

PFNM Produtos Florestais Não‑Madeireiros (Non-Timber Forest Products)

PI Estado do Piauí (State of Piauí)

PIB Produto Interno Bruto (Gross Domestic Product)

PIS Programa de Integração Social (Social Integration Program)

PL Projeto de Lei (Bill)

PMVA Produto de maior valor agregado (High Added Value Product)

PND Plano Nacional de Desenvolvimento (National Development Plan)

PNUD Programa das Nações Unidas para o Desenvolvimento (United Nations Development Program)

PR Estado do Paraná (State of Paraná)

PROFLORA Programa de Plantio Comercial e Recuperação de Floresta (Commercial Planting and Forest Recovery Program)

PROINFA Programa de Incentivo às Fontes Alternativas de Energia Elétrica (Alternative Energy Source Incentive Program)

PRONAF Programa Nacional de Fortalecimento da Agricultura Familiar Florestal (National Program for Strengthening Family Agriculture)

RAIS Relação Anual de Informações Sociais (Social Information Annual List)

REDD Redução de Emissões por Desmatamento e Degradação (Reducing Emissions from Deforestation and Degradation)

REFLORE Associação Sul Matogrossense de Produtores e Consumidores de Florestas Plantadas (Association of Planted Forest Consumers of Mato Grosso do Sul)

RENABIO Rede Nacional de Biomassa para Energia (National Network for Biomass Energy)

RL Reserva Legal (Legal Reserve)

RPPN Reserva Particular do Patrimônio Natural (Private Natural Heritage Reserve)

RR Estado de Roraima (State of Roraima)

RS Estado do Rio Grande do Sul (State of Rio Grand do Sul)

S.A. Sociedade Anônima (Corporation)

SBSTA Órgão Subsidiário para Aconselhamento Científico e Tecnológico (Subsidiary Body for Scientific and Technological Advice)

SC Estado de Santa Catarina (State of Santa Catarina)

SECEX Secretaria de Comércio Exterior (Bureau of Foreign Trade)

SELIC Sistema Especial de Liquidação e de Custódia (Special Settlement and Custody System)

SFB Serviço Florestal Brasileiro (Brazilian Forest Service)

SIDRA Sistema de Recuperação Automática (Automatic Recovery System)

SINDIFER Sindicato das Indústrias do Ferro no Estado de Minas Gerais (Minas Gerais Iron Industry Trade Union)

SP Estado de São Paulo (State of São Paulo)

TIMO Timberland Investment Management Organizations

TJLP Taxa de Juros de Longo Prazo (Long Term Interest Rate)

TO Estado de Tocantins (State of Tocantins)

UC Unidade de Conservação (Conservation Unit)

UF Unidade Federativa (Federated State)

UFLA Universidade Federal de Lavras (Federal University of Lavras)

VBPF Valor Bruto da Produção Florestal (Gross Value of Forestry Production)

WB World Bank Group

Para entender a floresta como um todo, é preciso entender cada uma das suas partes. A água irriga o solo. O solo fortifica

a árvore. A árvore alimenta os pássaros. Os pássaros carregam as sementes. As sementes fazem crescer as matas. As matas

protegem o homem. O homem transforma a comunidade. A comunidade desenvolve o planeta. Este é o ciclo da vida.

E é buscando valorizar essas relações que estamos escrevendo a nossa história, como empresa, como pessoas. As florestas,

assim como os seres humanos, devem crescer admiradas pelo seu valor. Esse é o nosso compromisso. E o futuro que

queremos construir.

Apoiamos a ONU na iniciativa do Ano Internacional das Florestas.

Saiba mais sobre a Fibria em www.fibria.com.br

MAIS FLORESTAS, MAIS VIDA.MAIS VIDA, MAIS FLORESTAS.

admirar ( o valor ) da vida

PLAntEd ForEStS In BrAZIL

AREA PlANtEd WIth GENERA EUCAlYPtUS ANd PINUS

ABRAF’S MEMBER CoMPANIES’ AREA PlANtEd WIth EUCAlYPtUS ANd PINUS

PlANtEd FoREStS WIth othER GRoUPS oF SPECIES

PlANtEd FoREStS X NAtIvE FoREStS

1CHAPTER

22 CHAPTER 1 :: PlAnTEd FoREsTs in BRAzil

Planted Forests in Brazil1CHAPTER1 PlANtEd FoREStS IN BRAZIl

1.1 AREA PLANTED WITH GENERA EUCALYPTUS AND PINUS

In 2010, the area occupied by forest plantations with genera Eucalyptus and Pinus in Brazil totaled 6,510,693 ha

(Table 1.01) – 73.0% corresponding to the plantation area of Eucalyptus and 27.0% to Pinus plantations (Graphic 1.01).

Graphic 1.01 Distribution of forest plantation area in Brazil, by genus, 2010

Eucalyptus 73%

Pinus 27%

Source: ABRAF’s individual and collective member companies (2011) and various sources compiled by Pöyry Silviconsult (2011).

With regard to 2009, the area of forest plantations increased by 3.2% (Graphic 1.02). In the 2005‑2010 period, the

cumulative growth was 23.0%, that is, 3.5% per year.

The expansion of forest plantations in 2010, that can be considered modest when compared with the 2005‑2009

period (4.5% p.a. or 19.2% in the period), was influenced by various factors, namely:

• In order to recover the pre‑crisis margins, companies in the sector have not made all the investments

planned for 2010, including those aimed at expanding the forest base. In addition, uncertainties related to

the international market for various forest‑based products deferred investments in new industrial units,

which also applied to the expansion of plantations. Moreover, the extensive time demanded for examining

environmental licensing applications of new forest plantations, and consequently, the issuance of the permit,

have also delayed new investments, particularly in some states of the Federation.

• The limitation imposed by AGU’s Opinion 1 / 2008, published in the Official Gazette of August 23, 2010,

which provides for restrictions on land acquisition by foreigners, surprised business groups under the condition

of foreign capital companies, which wanted to expand or establish new areas of forest plantations with

Eucalyptus and Pinus in the country. A recent assessment indicates that investments for the establishment

of forest plantations, which were suspended or stopped, totaled $ 14 billion. Additionally, it is estimated that

Brazil has failed to receive $ 24 billion of investments related to the establishment of new industrial units of

pulp and wooden panel production, including its new forest bases since these plants cannot be established

without the guarantee of their forest base for the supply of wood.

23PlAnTEd FoREsTs in BRAzil :: CHAPTER 1

The area of Eucalyptus totaled 4,754,334 ha (Table 1.01). It is noteworthy that the planted area of this genus is still expanding, although at a slower pace. In 2010, the growth registered was 5.3% (238,604 ha), compared to the average growth 6.9% p.a. in the 2005‑2009 period (Graphic 1.02).

The area of Pinus reached 1,756,359 ha (Table 1.01), 2.1% lower than in 2009 (Graphic 1.02). This decrease in the cultivated area shows a stagnation trend or even a slight reduction of plantations of this genus, partly due replacing these areas with plantations of Eucalyptus, whose yield is greater in volume than Pinus.

An analysis of the 2005‑2010 period shows a reduction of 38,361 ha in the area occupied by Pinus, that is, 0.1% p.a.

Graphic 1.02 History of forest plantation areas in Brazil, 2005-2010

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

7%

6%

5%

4%

3%

2%

1%

0%

7%

6%

5%

4%

3%

2%

1%

0%

2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010

EUCALYPTUS PINUS

1,00

0 ha

1,00

0 ha

Ann

ual G

row

th (%

)

Ann

ual G

row

th (%

)

3,463 1,831

8.2%3.8%

3,746 1,886

8.2%3.0%

3,970 1,875

6.0%

-0.6%

4,325

1,832

9.0%

-2.3%4,516

1,795

4.4%

-2.1%4,754

1,756

5.3%

-2.1%

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

7%

6%

5%

4%

3%

2%

1%

0%

2005 2006 2007 2008 2009 2010

TOTAL (EUCALYPTUS + PINUS)

1,00

0 ha

Ann

ual G

row

th (%

)

5,294

6.7%

5,632

6.4%

5,844

3.8%

6,158

5.4%

6,310

2.5%

6,511

3.2%

Source: ABRAF Yearbook (2010), ABRAF’s individual and collective member companies (2011) and various sources compiled by Pöyry Silviconsult (2011).


Planted Forests in Brazil1CHAPTERTa

ble

1.01

Fo

rest

pla

ntat

ions

wit

h Eu

caly

ptus

and

Pin

us in

Bra

zil,

2005

-201

0

UF

euca

lypt

us (h

a)pi

nus (

ha)

tota

l (ha

)

2005

2006

2007

2008

2009

2010

2005

2006

2007

2008

2009

2010

2005

2006

2007

2008

2009

2010

MG

1,11

9,25

91,

181,

429

1,21

8,21

21,

278,

210

1,30

0,00

01,

400,

000

149,

915

146,

000

143,

395

145,

000

140,

000

136,

310

1,26

9,17

41,

327,

429

1,36

1,60

71,

423,

210

1,44

0,00

01,

536,

310

SP79

8,52

291

5,84

191

1,90

81,

001,

080

1,02

9,67

01,

044,

813

148,

020

214,

491

209,

621

172,

480

167,

660

162,

005

946,

542

1,13

0,33

21,

121,

529

1,17

3,56

01,

197,

330

1,20

6,81

8

PR11

4,99

612

1,90

812

3,07

014

2,43

015

7,92

016

1,42

267

7,77

268

6,45

370

1,57

871

4,89

069

5,79

068

6,50

979

2,76

880

8,36

182

4,64

885

7,32

085

3,71

084

7,93

1

BA52

7,38

654

0,17

255

0,12

758

7,61

062

8,44

063

1,46

454

,746

54,8

2041

,221

35,0

9031

,040

26,5

7058

2,13

259

4,99

259

1,34

862

2,70

065

9,48

065

8,03

4

SC61

,166

70,3

4174

,008

77,4

4010

0,14

010

2,39

952

7,07

953

0,99

254

8,03

755

1,22

055

0,85

054

5,59

258

8,24

560

1,33

362

2,04

562

8,66

065

0,99

064

7,99

2

RS17

9,69

018

4,24

522

2,24

527

7,32

027

1,98

027

3,04

218

5,08

018

1,37

818

2,37

817

3,16

017

1,21

016

8,95

536

4,77

036

5,62

340

4,62

345

0,48

044

3,19

044

1,99

7

MS

113,

432

119,

319

207,

687

265,

250

290,

890

378,

195

38,9

0928

,500

20,6

9718

,800

16,8

7013

,847

152,

341

147,

819

228,

384

284,

050

307,

760

392,

042

ES20

4,03

520

7,80

020

8,81

921

0,41

020

4,57

020

3,88

54,

898

4,40

84,

093

3,99

03,

940

3,54

620

8,93

321

2,20

821

2,91

221

4,40

020

8,51

020

7,43

1

PA10

6,03

311

5,80

612

6,28

613

6,29

013

9,72

014

8,65

614

914

910

110

00

106,

182

115,

955

126,

387

136,

300

139,

720

148,

656

MA

60,7

4593

,285

106,

802

111,

120

137,

360

151,

403

00

00

00

60,7

4593

,285

106,

802

111,

120

137,

360

151,

403

GO

47,5

4249

,637

51,2

7956

,880

57,9

4058

,519

13,3

3014

,409

13,8

2815

,200

15,2

0012

,160

60,8

7264

,046

65,1

0772

,080

73,1

4070

,679

AP

60,0

8758

,473

58,8

7463

,310

62,8

8049

,369

27,8

4120

,490

9,00

01,

620

810

1587

,928

78,9

6367

,874

64,9

3063

,690

49,3

84

MT

42,4

1746

,146

57,1

5158

,580

61,5

3061

,950

437

710

100

42,4

6046

,153

57,1

5858

,590

61,5

4061

,950

TO2,

124

13,9

0121

,655

31,9

2044

,310

47,5

420

070

085

085

085

02,

124

13,9

0122

,355

32,7

7045

,160

48,3

92

PI¹

00

00

037

,025

00

00

00

00

00

037

,025

Oth

ers

25,2

8527

,491

31,5

8827

,580

28,3

804,

650

3,70

34,

189

00

490

028

,988

31,6

8031

,588

27,5

8028

,870

4,65

0

tota

l3,

462,

719

3,74

5,79

43,

969,

711

4,32

5,43

04,

515,

730

4,75

4,33

41,

831,

485

1,88

6,28

61,

874,

656

1,83

2,32

01,

794,

720

1,75

6,35

95,

294,

204

5,63

2,08

05,

844,

367

6,15

7,75

06,

310,

450

6,51

0,69

3

Sour

ce: A

BRA

F Ye

arbo

ok (2

010)

, ABR

AF’s

indi

vidu

al a

nd c

olle

ctiv

e m

embe

r com

pani

es (2

011)

and

var

ious

sou

rces

com

pile

d by

Pöy

ry S

ilvico

nsul

t (20

11).

¹ In

this

Year

book

edi

tion

we

high

light

the

stat

e of

Pia

uí, t

hat u

sed

to b

e lit

tle si

gnifi

cant

in th

e fo

rest

sec

tor a

nd, i

n 20

10, p

rese

nted

an

Euca

lypt

us a

rea

of 3

7,02

5 ha

.


Additionally, Table 1.02 indicates that Eucalyptus and Pinus plantation areas of ABRAF’s individual and collective member companies represented 50.5% (3,289,090 ha) of total planted area in 2010 (Table 1.03).

Tabl

e 1.

02

Euca

lypt

us a

nd P

inus

fore

st p

lant

atio

ns in

the

stat

es o

f Bra

zil a

nd o

f ABR

AF’

s m

embe

r an

d no

n-m

embe

r

com

pani

es, 2

010

Stat

eA

BrA

F’s M

embe

rs’ p

lant

ed A

rea

¹ (ha

)A

BrA

F’s N

on‑M

embe

rs’ p

lant

ed A

rea

tota

l For

est p

lant

atio

ns

euca

lypt

uspi

nus

tota

l%

euca

lypt

uspi

nus

tota

l%

euca

lypt

uspi

nus

tota

l%

MG

767,

846

13,5

5278

1,39

823

.8%

632,

154

122,

758

754,

912

23.4

%1,

400,

000

136,

310

1,53

6,31

023

.6%

SP48

3,43

925

,634

509,

073

15.5

%56

1,37

413

6,37

169

7,74

521

.7%

1,04

4,81

316

2,00

51,

206,

818

18.5

%

PR11

8,64

132

5,17

444

3,81

613

.5%

42,7

8136

1,33

540

4,11

512

.5%

161,

422

686,

509

847,

931

13.0

%

BA52

8,88

412

052

9,00

416

.1%

102,

579

26,4

5012

9,02

94.

0%63

1,46

426

,570

658,

034

10.1

%

SC25

,026

162,

947

187,

973

5.7%

77,3

7338

2,64

546

0,01

814

.3%

102,

399

545,

592

647,

992

10.0

%

RS22

3,82

678

,055

301,

880

9.2%

49,2

1790

,900

140,

117

4.3%

273,

042

168,

955

441,

997

6.8%

MS

222,

607

10,1

0423

2,71

17.

1%15

5,58

83,

743

159,

331

4.9%

378,

195

13,8

4739

2,04

26.

0%

ES16

6,16

00

166,

160

5.1%

37,7

253,

546

41,2

711.

3%20

3,88

53,

546

207,

431

3.2%

PA29

,424

029

,424

0.9%

119,

232

011

9,23

23.

7%14

8,65

60

148,

656

2.3%

MA

66,9

860

66,9

862.

0%84

,417

084

,417

2.6%

151,

403

015

1,40

32.

3%

GO

00

00.

0%58

,519

12,1

6070

,679

2.2%

58,5

1912

,160

70,6

791.

1%

AP

00

00.

0%49

,369

1549

,384

1.5%

49,3

6915

49,3

840.

8%

MT

3,62

50

3,62

50.

1%58

,325

058

,325

1.8%

61,9

500

61,9

501.

0%

TO4,

603

04,

603

0.1%

42,9

3985

043

,789

1.4%

47,5

4285

048

,392

0.7%

PI30

,195

030

,195

0.9%

6,83

00

6,83

00.

2%37

,025

037

,025

0.6%

RJ2,

241

02,

241

0.1%

2,40

80

2,40

80.

1%4,

650

04,

650

0.1%

tota

l2,

673,

504

615,

586

3,28

9,09

010

0.0%

2,08

0,83

11,

140,

773

3,22

1,60

410

0.0%

4,75

4,33

41,

756,

359

6,51

0,69

310

0.0%

Sour

ce: A

BRA

F’s in

divi

dual

and

col

lect

ive

mem

ber c

ompa

nies

(201

1) a

nd v

ario

us s

ourc

es c

ompi

led

by P

öyry

Silv

icons

ult (

2011

).¹ C

ompa

nies

ass

ocia

ted

with

ABR

AF

and

com

pani

es li

nked

to A

BRA

F’s C

olle

ctiv

e A

ssoc

iatio

ns (v

ide

ABR

AF

– St

ruct

ure

and

Mem

ber c

ompa

nies

).


Planted Forests in Brazil1CHAPTERTa

ble

1.03

To

tal a

rea

of E

ucal

yptu

s an

d Pi

nus

fore

st p

lant

atio

ns o

f com

pani

es d

irec

tly

rela

ted

to A

BRA

F (c

ompa

nies

ass

ocia

ted

wit

h A

BRA

F an

d co

mpa

nies

affi

liate

d to

col

lect

ive

mem

ber

com

pani

es),

2010

Stat

eA

BrA

F’s i

ndiv

idua

l mem

ber c

ompa

nies

¹Co

llect

ive

Ass

ocia

tion

s’ a

ffilia

tes²

tota

l Are

a of

ABr

AF’

s Ass

ocia

ted

Com

pani

es³

euca

lypt

uspi

nus

tota

l%

euca

lypt

uspi

nus

tota

l%

euca

lypt

uspi

nus

tota

l%

MG

766,

346

13,5

5277

9,89

825

.5%

1,50

00

1.50

00.

6%76

7,84

613

,552

781,

398

23.8

%

SP48

3,43

915

,384

498,

823

16.3

%0

10,2

5010

.250

4.4%

483,

439

25,6

3450

9,07

315

.5%

PR11

2,47

824

3,90

335

6,38

111

.7%

6,16

381

,272

87.4

3537

.6%

118,

641

325,

174

443,

816

13.5

%

BA52

8,88

412

052

9,00

417

.3%

00

00.

0%52

8,88

412

052

9,00

416

.1%

SC17

,344

139,

572

156,

916

5.1%

7,68

323

,375

31.0

5813

.4%

25,0

2616

2,94

718

7,97

35.

7%

RS20

1,49

439

220

1,88

66.

6%22

,332

77,6

6299

.994

43.1

%22

3,82

678

,055

301,

880

9.2%

MS

222,

607

10,1

0423

2,71

17.

6%0

00

0.0%

222,

607

10,1

0423

2,71

17.

1%

ES16

6,16

00

166,

160

5.4%

00

00.

0%16

6,16

00

166,

160

5.1%

PA29

,224

029

,224

1.0%

200

020

00.

1%29

,424

029

,424

0.9%

MA

66,9

860

66,9

862.

2%0

00

0.0%

66,9

860

66,9

862.

0%

GO

00

00.

0%0

00

0.0%

00

00.

0%

AP

00

00.

0%0

00

0.0%

00

00.

0%

MT

3,62

50

3,62

50.

1%0

00

0.0%

3,62

50

3,62

50.

1%

TO2,

769

02,

769

0.1%

1,83

40

1.83

40.

8%4,

603

04,

603

0.1%

PI30

,195

030

,195

1.0%

00

00.

0%30

,195

030

,195

0.9%

RJ2,

241

02,

241

0.1%

00

00.

0%2,

241

02,

241

0.1%

Oth

ers

00

00.

0%0

00

0.0%

00

00.

0%

tota

l2,

633,

792

423,

027

3,05

6,81

910

0.0%

39,7

1119

2,55

923

2,27

010

0.0%

2,67

3,50

461

5,58

63,

289,

090

100.

0%

Sour

ce: A

BRA

F’s in

divi

dual

and

col

lect

ive

mem

ber c

ompa

nies

(201

1).

¹ Onl

y A

BRA

F’s in

divi

dual

mem

ber c

ompa

nies

in 2

010,

incl

udin

g ow

n, fo

ster

ing

and

leas

ing

area

s.² C

ompa

nies

link

ed o

nly

to A

BRA

F’s c

olle

ctiv

e m

embe

r com

pani

es.

³ Com

pani

es a

ssoc

iate

d w

ith A

BRA

F an

d co

mpa

nies

link

ed to

ABR

AF’s

Col

lect

ive

Ass

ocia

tions

(vid

e A

BRA

F –

Stru

ctur

e an

d M

embe

r com

pani

es).


State Eucalyptus (ha)

MG 1,400,000

SP 1,044,813

PR 161,422

BA 631,464

SC 102,399

RS 273,042

MS 378,195

ES 203,885

PA 148,656

MA 151,403

GO 58,519

AP 49,369

MT 61,950

TO 47,542

PI 37,025

Others 4,650

Total 4,754,334


SP1,044,813

PR161,422

MG1,400,000

MT61,950

GO58,519

TO47,542

MA151,403

PA148,656

AP49,369

MS378,195

SC102,399

RS273,042

BA631,464

ES203,885

TOTAL: 4,754,334 ha

Figure 1.01 Area and distribution of Eucalyptus forest plantations in Brazil, 2010

Figures 1.01 and 1.02, below, illustrate the geographical distribution of forest plantation areas in Brazil in 2010, respectively for Pinus and Eucalyptus. Figure 3.01 shows the cumulative distribution and the total area of forest plantations with these two genera in the same year.

PI37,025


Planted Forests in Brazil1CHAPTER

State Pinus (ha)

MG 136,310

SP 162,005

PR 686,509

BA 26,570

SC 545,592

RS 168,955

MS 13,847

ES 3,546

PA –

MA –

GO 12,160

AP 15

MT –

TO 850

PI –

Others –

Total 1,756,359


SP162,005

PR686,509

MG136,310

GO12,160

TO850

AP15

MS13,847

SC545,592

RS168,955

BA26,570

ES3,546

Figure 1.02 Area and distribution of Pinus forest plantations in Brazil, 2010

TOTAL: 1,756,359 ha


State Total (ha)

MG 1,536,310

SP 1,206,818

PR 847,931

BA 658,034

SC 647,992

RS 441,997

MS 392,042

ES 207,431

PA 148,656

MA 151,403

GO 70,679

AP 49,384

MT 61,950

TO 48,392

PI 37,025

Others 4,650

Total 6,510,693


SP1,206,818

PR847,931

MG1,536,310

MT61,950

GO70,679

TO48,392

MA151,403

PA148,656

AP49,384

MS392,042

SC647,992

RS441,997

BA658,034

PI37,025

ES207,431

Figure 1.03 Area and distribution of forest plantations (Eucalyptus and Pinus) in Brazil, 2010

TOTAL: 6,510,693 ha


Planted Forests in Brazil1CHAPTER The highest concentration of forest plantations (Eucalyptus and Pinus) occurs in south and southeast of the country (75.2%), where the main industrial units of the segments of pulp, paper, wooden panels and charcoal metallurgy are also located (Figure 1.04).

Figure 1.04 Schematic distribution of the main forest stands by region of the country, 2010


Planted Area per Company

0 ‑ 20.000

20.001 ‑ 50.000

50.001 ‑ 100.000

> 100.000

ACro

Mt

pA

Apr r

M A

to

goDF

BA

pI

Cer N

pB

pe

Al

Se

M ge S

rJSp

pr

S Cr S

MS

A M


Minas Gerais, Sao Paulo, Parana, Bahia, Santa Catarina, Rio Grande do Sul and Mato Grosso do Sul stood out on the national stage as the states holding 88.0% of the total area of forest plantations (Graphic 1.03).

Graphic 1.03 Distribution of Eucalyptus and Pinus plantation areas in Brazil, 2010

MG 23.6%

SP 18.5%

PR 13.0%

others 12%

BA 10.1%

SC 10.0%

RS 6.8%

MS 6.0%


With regard to the geographical distribution of cultivated area by genus, in the southern states the culture of Pinus prevails, while in other regions, the Eucalyptus (Figure 1.05).



100%

100%100%

100%

100%

98.2%

1.8%

4.0%

96.0%

82.8%

17.2%

95.8%

4.2%

86.6%

13.4%

81.0%

19.0%

15.8%

84.2%

38.2%

61.8%

98.3%

1.7%91.1%

8.9%

Figure 1.05 Area and distribution of Eucalyptus and Pinus forest plantations in Brazil, 2010

Source: ABRAF’s individual and collective member companies(2011) and various sources compiled by Pöyry Silviconsult (2011).

Eucalyptus

Pinus


In 2010, the states that showed the highest growth rates in the area of forest plantations were Mato Grosso do Sul (27.4%), Maranhão (10.2%), Tocantins (7.2%), Minas Gerais (6.7%) and Pará (6.4%). The state of Amapá presented the highest rate of reduction in area (22.5% – Graphic 1.04).

Graphic 1.04 Growth of area planted with Eucalyptus and Pinus by state, 2009-2010

6.7 6.4

-0.5

0.7

-0.7-3.4

27.4

0.8

10.2

-0.3

7.2

-0.2

-22.5

-0.5

30

20

10

0

‑10

‑20

‑30

MG SP PR BA SC RS MS ES PA MA GO AP MT TO

%

Source: ABRAF Yearbook (2010); ABRAF’s individual and collective member companies(2011) and various sources compiled by Pöyry Silviconsult (2011).

1.1.1 Eucalyptus Plantations

The area planted with this genus totaled 4,754,334 ha, of which 55.8% were concentrated in the Southeast (Figure 1.06).

Statewise, Minas Gerais, São Paulo, Bahia, Mato Grosso do Sul, Rio Grande do Sul, Espírito Santo and Paraná held 86.1% of the plantations with the genus Eucalyptus (Graphic 1.05).



11%

11%

5%

17%

56%

Figure 1.06 Area and distribution of Eucalyptus forest plantations in Brazil, 2010


North

NortheASt

CeNter‑WeSt

SoUtheASt

SoUth

Southeast 55,8%

Northeast 17,2%

South 11,3%

Center-West 10,5%

North 5,2%


Graphic 1.05 Distribution of Eucalyptus plantation area by state, 2010

MG 29.4%

SP 22.0%

others 13.9%

BA 13.3%

MS 8.0%

RS 5.7%

ES 4.3%

PR 3.4%


The current levels of land prices in consolidated markets (Sao Paulo, Parana and Santa Catarina) are encouraging the migration of forestry activity to areas called “new forest frontiers”, where one observes the increase of Eucalyptus, as with states of Maranhao, Piaui, Tocantins and Pará. It should be noted that the investments of large producers of pulp and wooden panels are the largest contributors to the financing of these new plantings. This is corroborated by the growth of the area of Eucalyptus, between 2009 and 2010 in Mato Grosso do Sul (30.0%) and Maranhão (10.2%), as shown in Graphic 6.1.

Graphic 1.06 Percentage increase in area planted with Eucalyptus by state, 2010

7.7 6.42.3 0.72.2 1.0

30.0

1.5

10.2

0.4

7.3

0.5

-21.5

-0.3

40

30

20

10

0

‑10

‑20

‑30

‑40

MG SP PR BA SC RS MS ES PA MA GO AP MT TO

%



Planted Forests in Brazil1CHAPTER1.1.2 Pinus Plantations

The area planted with Pinus in Brazil (1,756,359 ha) is concentrated mainly in the south of the country (79.8%) due to edaphoclimatic conditions and the location of major processing centers of this type of wood (Figure 1.07).

17%

80%

1%

Figure 1.07 Area and distribution of Pinus forest plantations in Brazil, 2010


North

NortheASt

CeNter‑WeSt

SoUtheASt

SoUth

South 79,8%

Southeast 17,2%

Center-West 1,5%

Northeast 1,5%


The state of Paraná is ranked first in Pinus planted area, with 31.9% of total national area, followed by Santa Catarina that represents 31.1% of total area (Graphic 1.07).

Graphic 1.07 Distribution of area planted with Pinus by state, 2010

PR 39.1%

SC 31.1%

RS 9.6%

SP 9.2%

MG 7.8%

others 3.2%


The states that showed the largest absolute reductions in the area of Pinus were Paraná, São Paulo, Santa Catarina and Bahia, totaling a decrease of 24,664 ha. Relatively, the reductions evidenced in Mato Grosso do Sul and Bahia (Graphic 1.08) stand out.

Graphic 1.08 Percentage increase in area planted with Pinus by state, 2009-2010

-2.5

-20.0

-1.0-1.3

-17.9

-3.4-1.3

-14.4

-10.0

30

20

10

0

‑10

‑20

‑30

MG SP PR BA SC RS MS ES GO

%



Planted Forests in Brazil1CHAPTER1.2 ABRAF’S MEMBER COMPANIES’ AREA PLANTED WITH EUCALYPTUS

AND PINUS

In 2010, ABRAF’s individual and collective member companies’ area of Eucalyptus and Pinus represented 47% of the Brazilian area of forest plantations. Historically, the relative share of ABRAF’s individual and collective member companies has been increasing, as shown in Graphic 1.9, due to the forest base expansion of companies already associated, and new affiliations.

Graphic 1.09 Evolution of ABRAF’s member companies’ share in forest plantation areas, 2010

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

2004 2005 2006 2007 2008 2009 2010

44% 47%

56%

45%

55%

43% 42%

57% 58%

44%

56%

44%

56% 53%

ABRAF Members Not ABRAF Members


Statewide, the representativeness of the area associated ABRAF varies significantly. For example, in Piauí, Bahia and Espirito Santo, over 80.0% of the planted area belongs to ABRAF member companies. Moreover, less than 30.0% of the planted area in Mato Grosso, Tocantins, Pará and Santa Catarina belong to ABRAF member companies. Goias and Amapá are the only states where 100% of the planted area are not linked to any company associated with ABRAF (Graphic 1.10).


Graphic 1.10 Representativeness of ABRAF’s individual and collective member companies by state, 2010

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

MG SP PR BA SC RS MS ES PA MA GO AP MT TO PI RJ

42%

58%

52%

48%

80%

20%

29%

71%

68%

32%

59%

41%

80%

20%

20%

80%

44%

56%

100% 100%

6%

94%

10%

90%

82%

18%

51%

49%

48%

52%

ABRAF Members Not ABRAF Members


The distribution of ABRAF’s individual and collective member companies’ planted area by state is similar to the distribution of the total planted area, since 90.8% of plantations are concentrated in Minas Gerais, Bahia, Sao Paulo, Parana, Rio Grande Sul, Mato Grosso do Sul and Santa Catarina (Graphic 1.11).

Graphic 1.11 Distribution of ABRAF’s individual and collective member companies’ planted area by state, 2010

MG 23.8%

SP 15.5%

BA 16.1%

PR 13.5%

RS 9.2%

others 9.2%

MS 7.1%

SC 5.7%

Source: ABRAF’s individual and collective member companies (2011).


Planted Forests in Brazil1CHAPTER1.2.1 ABRAF’s individual member companies

In 2010, ABRAF individual’s member companies’ plantation area was 3,056,819 ha, distributed in 14 states. Eucalyptus plantations amounted to 2,633,792 ha and 423,027 ha of Pinus.

Graphic 1.12 illustrates the distribution of forest plantation area by state, separately for Eucalyptus and Pinus.

Graphic 1.12 Distribution of ABRAF’s individual member companies’ planted are by state, 2010

EUCALYPTUS PINUS

PR 57.7%

SC 33.0%

SP 3.6%

MG 3.2%

MS 2.4%

others 0.1%

MG 29.1%

BA 20.1%

SP 18.4%

others 10.1%

MS 8.5%

RS 7.7%

ES 6.3%

Source: ABRAF’s individual member companies (2011).

The increase in ABRAF individual’s member companies’ plantation area (10.8%) exceeded the consolidated results for the country (3.2%). However, it is noteworthy that some of this growth was due to the affiliation of two new companies with ABRAF, which mainly grow Pinus (Graphic 1.13).

Graphic 1.13 Evolution of ABRAF’s individual member companies’ plantation area, 2005-2010

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0

2005 2006 2007 2008 2009 2010

Eucalyptus Pinus

Mill

ion

(ha) 0.31

2.13

0.31

2.43

0.32

2.45

0.42

2.63

0.33

2.09

0.35

2.02



Analyzing separately the evolution of the area of Eucalyptus, it can be noted that the cumulative increase for 2004‑2010 was approximately 42.5% (Graphic 1.14). For Pinus, the growth was 27.0%.

Graphic 1.14 Relative evolution of ABRAF’s individual member companies’ plantation areas by species, 2004-2010

127%

143%

95%

132%

94%

131%

93%

115%

100%

113%

105%

109%

100%

PinusEucalyptus

2004 2005 2006 2007 2008 2009 2010

160%

140%

120%

100%

80%

60%

40%

20%

0%


As for the distribution of the planted area of ABRAF individual’s member companies for the industrial segment, we highlight the contribution of paper mills and metallurgy, 64.7% and 18.6% respectively. Particularly in relation to Eucalyptus, the segment of pulp & paper concentrates 68.0% of the planted area, followed by segments of metallurgy (20.9%), wooden panels (6.8%) and independent producers (4.2 %). In the case of Pinus, in addition to pulp & paper (44.1%), the most representative segments are independent producers and wooden panels, which respectively hold 29.5% and 21.1% of the planted area (Graphic 1.15).

Graphic 1.15 Distribution of ABRAF’s individual member companies’ forest plantation areas with Eucalyptus and Pinus by industrial segment, 2010

P&P 68.0%

Iron & Steel Industry 20.9%

Wood-based Panel 6.8%

Independent Producers 4.2%

P&P 44.1%

Iron & Steel Industry 5.3%

Wood-based Panel 21.1%

Independent Producers 29.5%

EUCALYPTUS PINUS



Planted Forests in Brazil1CHAPTER It should be noted that these figures depict the formation process of the Brazilian forest sector, since most of the investments for the formation of forest plantations were the result of the development of the pulp & paper segment.

Table 1.4 presents the evolution of the distribution of areas planted with Eucalyptus and Pinus belonging to ABRAF’s individual member companies by property type. Note that in 2010, plantations established in own increased by 13.0% (263,863 ha) and plantations on leased land by 12.0% (40,689 ha). Moreover, the fostering area decreased approximately 2.0% (8,111 ha).

Table 1.04 Evolution of the distribution of ABRAF’s individual member companies’ forest plantation areas with Eucalyptus and Pinus by type or property, 2009 and 2010

UFForest plantations (ha) – 2009 Forest plantations (ha) – 2010 Relative Variation (%)

Own Fostering Leasing Total Own Fostering Leasing Total Own Fostering Leasing Total

MG 611,202 78,028 82,800 772,030 592,161 92,283 95,454 779,898 ‑3.0 18.0 15.0 1.0

BA 373,756 121,321 9,010 504,087 398,205 121,790 9,010 529,004 7.0 0.0 0.0 5.0

SP 242,308 87,205 104,748 434,261 328,322 63,060 107,442 498,823 35.0 ‑28.0 3.0 15.0

PR 147,039 71,285 25,224 243,548 276,973 54,169 25,239 356,381 88.0 ‑24.0 0.0 46.0

MS 111,190 656 72,639 184,485 121,602 32,411 78,698 232,711 9.0 4.841.0 8.0 26.0

RS 189,028 23,663 3,359 216,050 159,240 28,333 14,314 201,886 ‑16.0 20.0 326.0 ‑7.0

ES 129,477 41,299 1,260 172,036 122,537 42,364 1,259 166,160 ‑5.0 3.0 0.0 ‑3.0

SC 112,956 32,708 15,074 160,738 129,120 13,344 14,451 156,916 14.0 ‑59.0 ‑4.0 ‑2.0

MA 46,664 ‑ ‑ 46,664 66,986 ‑ ‑ 66,986 44.0 0.0 0.0 44.0

PI – ‑ ‑ - 29,895 ‑ ‑ 29,895 0.0 0.0 0.0 0.0

PA – ‑ ‑ - ‑ ‑ 29,224 29,224 0.0 0.0 0.0 0.0

Others¹ 4,540 545 21,395 26,480 6,982 845 1,108 8,935 54.0 55.0 ‑95.0 ‑66.0

Total 1,968,160 456,710 335,509 2,760,379 2,232,023 448,599 376,198 3,056,819 13.0 -2.0 12.0 11.0

Source: ABRAF Yearbook (2010) e ABRAF’s individual member companies (2011).¹ “Others” comprises the states of Mato Grosso, Tocantins and Rio de Janeiro.

In general, the area of forest plantations established on own lands accounted for over 50.0% of plantation area, with the exception of Para state, where 100% of forest plantations were established in leased areas. The most significant states in relation to the fostering modality are Espírito Santo and Bahia, with 25.5% and 23.0%, respectively (Graphic 1.16).


Graphic 1.16 Distribution of ABRAF’s individual member companies’ forest plantation areas with Eucalyptus and Pinus by type or property, by state, 2010

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

MG SP PR BA SC RS MS ES PA MA Others

76%

12%

12%

82%

9%

9%

78%

15%

7%

52%

34%

14%

100%

66%

13%

22%

79%

7%

14%

100%

75%

23%

74%

25%

95%

2%

own land Forest outgrower Scheme leasing

2% 1% 3%


In 2010, growth in forest plantations of ABRAF’s individual member companies established in owned areas was 13.4%, plantations established in leased areas increased approximately 12.0% and fostered areas decreased by1.8%.

It is noteworthy that the reduction in the fostered area was due to adjustments in the classification methodology of ownership modality. In summary, areas that were previously classified as fostered areas were disregarded, but in fact were the result of independent plantations, encouraged by the rural extension.

Graphic 1.17 Evolution of the distribution of ABRAF’s individual member companies’ forest plantation areas with Eucalyptus and Pinus by type of property, 2005-2010

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0

2005 2006 2007 2008 2009 2010

Mill

ion

(ha) 0.2

0.4

1.8

0.20.3

1.9

0.20.3

1.9

0.3

0.4

2.0

0.3

0.5

2.0

0.4

0.4

2.2


Source: ABRAF Yearbook (2010) e ABRAF’s individual member companies (2011).


Planted Forests in Brazil1CHAPTER The share of own forests throughout the forest base has remained fairly stable since 2008. However, it is clear that companies, through fostering programs, seek to optimize the security of timber supply by reducing the amount of equity capital in fixed assets, promoting supportive programs, with the consequent employment generation and increased local income, and also practicing a form of land lease (Graphic 1.18).

Graphic 1.18 Evolution of the distribution of ABRAF’s individual member companies’ property modality, 2005-2010

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

2005 2006 2007 2008 2009 2010

8%

11%

81%

9%

13%

78%

10%

14%

76%

11%

16%

73%

12%

17%

71%

12%

15%

73%


Source: ABRAF Yearbook (2010) and ABRAF’s individual member companies (2011).

1.3 PLANTED FORESTS WITH OTHER GROUPS OF SPECIES

In 2010, the area occupied by forest plantations of unconventional species such as Acacia, Teak, Araucaria, Populus, Rubber Tree, Parica among others represented 6.6% of total area of forest plantations in Brazil (Table 1.05).

Table 1.05 Total area of forest plantations in Brazil by genus, 2010

GeneraArea

ha %

Eucalyptus 4,754,334 68.2%

Pinus 1,756,359 25.2%

Others ¹ 462,390 6.6%

Total 6,973,083 100.0%

Source: ABRAF’s individual and collective member companies (2011) and various sources compiled by Pöyry Silviconsult (2011).¹ Other genera include species: Acacia, Rubber Tree, Parica, Teak, Araucaria and Populus, etc.


With regard to 2009, the area planted with these species retracted by 2.0% (Table 1.06).

Table 1.06 Characteristics and areas of forest plantations with other species groups in Brazil, 2009 and 2010

Species Scientific name StatesArea (ha)

Main Applications2009 2010

Acácia Acacia mearnsii e Acacia

mangium RS, RR 174,150 127,601

Wood: energy, charcoal, chip for pulp, wooden panels Tannin: tannery, adhesives, oil industry, rubbers

Seringueira² Hevea brasiliensis SP, MT, BA 128,460 159,500Madeira: energy and furniture (study under way)

Sap: Rubber

Paricá Schizolobium amazo-

nicum PA, MA 85,320 85,470

Veneer and plywood, roofs, sticks, paper, furniture, finishing and frames

Teak Tectona grandis MT, AM, AC, PA 65,240 65,440Civil construction (doors, windows, wainscoting, panels, roofs),

floors and decks, furniture, boats and veneers

Araucaria Araucaria angustifolia PR, SC 12,110 11,190Sawmillings, veneers, roofs, frames, laths, boxes, furniture frame,

matches, pencils and reels

Pópulus Populus spp. PR, SC 4,030 4,220Matches, furniture parts, doors, interior joinery,

toys, kitchenware

Others - - 2,740 8,969 ‑

Total 472,050 462,390

Source: ABRAF Yearbook (2010), ABRAF’s individual and collective member companies (2011) and various sources compiled by Pöyry Silviconsult (2011).¹ Areas with forests such as bracatinga, Japanese raisin tree, pupunha (peach palm), among others.² The rubber tree area in 2009 was changed from information provided by APABOR (A Associação Paulista de Produtores e Beneficiadores de Borracha).

Acacia mearnsii and Acacia mangium are species from Australia, New Guinea and Indonesia. In Brazil, the genus is cultivated with the purpose of extracting tannin from the bark for tannery industries, as well as the use of its wood in the pulp, energy and wooden panels industries. In general, the area planted with the genus in Brazil has been declining since 2008. In 2010, the plantation area reached 127,600 ha, a figure 26.7% lower than in 2009. It is noteworthy that part of the area reduction was due to updating planted area indicators by companies not associated with ABRAF.

Hevea brasiliensis (rubber tree) is a species cultivated both in extractive areas and in commercial plantations, with the aim to produce natural rubber. The wood, when the production cycle of resin trees is complete, is intended mainly to industries in the energy sector and furniture. In 2010, the area planted with rubber tree in Brazil amounted to 159,500 ha, which is significantly higher than that reported in 2009. However, this increase was not due to an increase in plantings, but the updating of official statistics.

Schizolobium amazonicum is popularly known as Paricá and its plantations are concentrated in Pará and Maranhão. The main use of Parica wood is the production of veneer and plywood. In 2010, the area planted with the species reached 85,470 ha, remaining virtually unchanged in relation to the previous year.

Teak (Tectona grandis) is native of Indian and Asian tropical forests. In Brazil, it is planted on a commercial scale in the states of Mato Grosso, Amazonas, Pará and Acre. The wood is mainly used in shipbuilding, construction, furniture, floor and deck manufacturing. Compared to 2009, the area of forest plantations with teak in Brazil grew 0.3%, totaling 65,440 ha.


Planted Forests in Brazil1CHAPTER Araucaria angustifolia is a species originating from southern and southeastern Brazil. The commercial plantations of Araucaria are concentrated in the states of Parana and Santa Catarina. The wood is high quality and designed for the manufacture of sawn and veneer and the furniture industry, with reduced use in the paper industry. It is noteworthy that Araucaria plantations have been decreasing over recent years, partly due to the preference of forest producers for the use of fast growing species (Pinus and Eucalyptus) and mainly due to regulatory restrictions and legal requirements to preserve the species. Compared to 2009, Araucaria plantations decreased by 920 ha (7.6%) in absolute terms.

Populus (Populus spp.) is commercially used since 1990 in Brazil. This species is usually employed in the matches and furniture industries. The areas planted with species of this genus are found mainly in southern Brazil. In 2010, this group of species reached 4,220 ha, an increase of 4.7% compared to 2009.

1.4 PLANTED FORESTS X NATIVE FORESTS

Table 1.07 presents the evolution (2009‑2010) and distribution of areas of native forests and forest plantations belonging to ABRAF’s individual member companies.

Table 1.07 Distribution of forest plantation and native forest areas preserved by ABRAF’s individual member companies by state, 2009 and 2010

UF Forest Area (ha) – 2009 Forest Area (ha) – 2010

Owned Plantations¹ Native² (ha) Owned Plantations¹ Native² (ha)

MG 611,202 545,734 592,161 465,345

BA 373,756 304,906 398,205 306,611

SP 242,308 175,165 328,322 201,276

PR 147,039 152,660 276,973 212,711

RS 189,028 153,452 159,240 168,245

ES 129,477 74,734 122,537 74,418

SC 112,956 120,045 129,120 118,104

MS 111,190 80,555 121,602 84,358

MA 46,664 97,987 66,986 112,007

Others³ 4,540 49,015 36,877 72,662

Total 1,968,160 1,754,253 2,232,023 1,815,738

Source: ABRAF Yearbook (2010), ABRAF’s individual and collective member companies (2011) and various sources compiled by Pöyry Silviconsult (2011).¹ Only ABRAF’s individual member companies’ own forests, excluding forest fostering and leasing areas.² Includes RPPN, Permanent Preservation Area, Legal Reserve and Others.³ “Others” includes areas in the states of Pará, Mato Grosso, Rio de Janeiro, Piauí and Tocantins.


In 2010, the native forest area preserved by ABRAF’s individual member companies was 3.5% higher than the previous year, representing an increase of 61,485 ha. Compared with the “native area / cultivated area” index, it should be noted that for each 1.0 ha of forest plantations, the member companies contribute with the preservation of 0.81 ha of native forests. The value of this indicator was close to that obtained in 2009 when, for each 1.0 ha of forest plantations, 0.89 ha of native forest was preserved.

The state of Paraná showed the largest increase in conservation areas among ABRAF’s individual member companies (39.3%), totaling 212,711 ha preserved. It is noteworthy that this increase was due to the affiliation of two companies that develop activities in the state.

The states comprised in the ‘other’ class, that is, Para, Mato Grosso, Rio de Janeiro, Piauí and Tocantins, together had a 48.2% increase in natural forest areas with ABRAF’s individual member companies, totaling 72,662 ha in 2010.

It should be noted that, in MG and SC, the reduction of native forest areas, preserved by ABRAF’s member companies, was due to the divestiture of two forest assets, for firms that are not covered by the member companies’ statistics.

Graphic 1.19 presents the area of forest plantations and preserved native forests by ABRAF’s individual member companies by state in 2010 in absolute terms as well as the relationship between preservation area and total forest area (planted + native).

Graphic 1.19 Area of forest plantations and native forests preserved by ABRAF’s individual member companies by state, 2010

MG BA SP PR RS ES SC MS MA Others

0.2

0.20.3

0.2

0.1

0.1

0.10.1

0.4

0.3

0.1

0.10.3

0.2

0.1

0.1

0.00.1

0.5

0.6

Planted Forest Natural Forest Percentage of Natural Forest

1.2

1.0

0.8

0.6

0.4

0.2

0.0

70%

60%

50%

40%

30%

20%

10%

0%

Mill

ion

(ha)

43%41%

66%

44%

38%38%

48%

63%

44%

51%

Source: ABARF’s individual and collective member companies (2011) and various sources compiled by Pöyry Silviconsult (2011).

SustentabilidadeSustentabilidadeSustentabilidade

Nossos passos buscam sempre a mesma direção:



Nossos passos buscam sempre Nossos passos buscam sempre Nossos passos buscam sempre Nossos passos buscam sempre Nossos passos buscam sempre Nossos passos buscam sempre Nossos passos buscam sempre Nossos passos buscam sempre Nossos passos buscam sempre Nossos passos buscam sempre Nossos passos buscam sempre Nossos passos buscam sempre Nossos passos buscam sempre Nossos passos buscam sempre a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção:


SustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadea mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção: a mesma direção:

SustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadea mesma direção:















SustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSustentabilidadeSomos uma empresa de base fl orestal,

com 87 anos de história e pioneira

no manejo responsável. Isso signifi ca

preocupação com a viabilidade econômica,

aliada ao respeito aos nossos parceiros,

às comunidades e ao meio ambiente.

Nessa jornada, obtivemos o reconhecimento

de certifi cações e premiações nacionais

e internacionais. Estamos presentes

em mais de 80 países e temos orgulho

de ser uma das maiores produtoras

verticalmente integradas de papel e celulose.

A sustentabilidade nos trouxe até aqui.

Somos uma empresa de base fl orestal,







































Somos uma empresa de base fl orestal, Somos uma empresa de base fl orestal, Somos uma empresa de base fl orestal, Somos uma empresa de base fl orestal, Somos uma empresa de base fl orestal, Somos uma empresa de base fl orestal, Somos uma empresa de base fl orestal, Somos uma empresa de base fl orestal, Somos uma empresa de base fl orestal, Somos uma empresa de base fl orestal, Somos uma empresa de base fl orestal, Somos uma empresa de base fl orestal, Somos uma empresa de base fl orestal, Somos uma empresa de base fl orestal, Somos uma empresa de base fl orestal,

com 87 anos de história e pioneira com 87 anos de história e pioneira com 87 anos de história e pioneira com 87 anos de história e pioneira com 87 anos de história e pioneira com 87 anos de história e pioneira com 87 anos de história e pioneira com 87 anos de história e pioneira com 87 anos de história e pioneira com 87 anos de história e pioneira com 87 anos de história e pioneira com 87 anos de história e pioneira com 87 anos de história e pioneira com 87 anos de história e pioneira com 87 anos de história e pioneira

no manejo responsável. Isso signifi ca no manejo responsável. Isso signifi ca no manejo responsável. Isso signifi ca no manejo responsável. Isso signifi ca no manejo responsável. Isso signifi ca no manejo responsável. Isso signifi ca no manejo responsável. Isso signifi ca no manejo responsável. Isso signifi ca no manejo responsável. Isso signifi ca no manejo responsável. Isso signifi ca no manejo responsável. Isso signifi ca no manejo responsável. Isso signifi ca no manejo responsável. Isso signifi ca no manejo responsável. Isso signifi ca no manejo responsável. Isso signifi ca

preocupação com a viabilidade econômica, preocupação com a viabilidade econômica, preocupação com a viabilidade econômica, preocupação com a viabilidade econômica, preocupação com a viabilidade econômica, preocupação com a viabilidade econômica, preocupação com a viabilidade econômica, preocupação com a viabilidade econômica, preocupação com a viabilidade econômica, preocupação com a viabilidade econômica, preocupação com a viabilidade econômica, preocupação com a viabilidade econômica, preocupação com a viabilidade econômica, preocupação com a viabilidade econômica, preocupação com a viabilidade econômica,

aliada ao respeito aos nossos parceiros, aliada ao respeito aos nossos parceiros, aliada ao respeito aos nossos parceiros, aliada ao respeito aos nossos parceiros, aliada ao respeito aos nossos parceiros, aliada ao respeito aos nossos parceiros, aliada ao respeito aos nossos parceiros, aliada ao respeito aos nossos parceiros, aliada ao respeito aos nossos parceiros, aliada ao respeito aos nossos parceiros, aliada ao respeito aos nossos parceiros, aliada ao respeito aos nossos parceiros, aliada ao respeito aos nossos parceiros, aliada ao respeito aos nossos parceiros, aliada ao respeito aos nossos parceiros,

às comunidades e ao meio ambiente. às comunidades e ao meio ambiente. às comunidades e ao meio ambiente. às comunidades e ao meio ambiente. às comunidades e ao meio ambiente. às comunidades e ao meio ambiente. às comunidades e ao meio ambiente. às comunidades e ao meio ambiente. às comunidades e ao meio ambiente. às comunidades e ao meio ambiente. às comunidades e ao meio ambiente. às comunidades e ao meio ambiente. às comunidades e ao meio ambiente. às comunidades e ao meio ambiente. às comunidades e ao meio ambiente.

Nessa jornada, obtivemos o reconhecimento Nessa jornada, obtivemos o reconhecimento Nessa jornada, obtivemos o reconhecimento Nessa jornada, obtivemos o reconhecimento Nessa jornada, obtivemos o reconhecimento Nessa jornada, obtivemos o reconhecimento Nessa jornada, obtivemos o reconhecimento Nessa jornada, obtivemos o reconhecimento Nessa jornada, obtivemos o reconhecimento Nessa jornada, obtivemos o reconhecimento Nessa jornada, obtivemos o reconhecimento Nessa jornada, obtivemos o reconhecimento Nessa jornada, obtivemos o reconhecimento Nessa jornada, obtivemos o reconhecimento Nessa jornada, obtivemos o reconhecimento

de certifi cações e premiações nacionais de certifi cações e premiações nacionais de certifi cações e premiações nacionais de certifi cações e premiações nacionais de certifi cações e premiações nacionais de certifi cações e premiações nacionais de certifi cações e premiações nacionais de certifi cações e premiações nacionais de certifi cações e premiações nacionais de certifi cações e premiações nacionais de certifi cações e premiações nacionais de certifi cações e premiações nacionais de certifi cações e premiações nacionais de certifi cações e premiações nacionais de certifi cações e premiações nacionais

e internacionais. Estamos presentes e internacionais. Estamos presentes e internacionais. Estamos presentes e internacionais. Estamos presentes e internacionais. Estamos presentes e internacionais. Estamos presentes e internacionais. Estamos presentes e internacionais. Estamos presentes e internacionais. Estamos presentes e internacionais. Estamos presentes e internacionais. Estamos presentes e internacionais. Estamos presentes e internacionais. Estamos presentes e internacionais. Estamos presentes e internacionais. Estamos presentes

em mais de 80 países e temos orgulho em mais de 80 países e temos orgulho em mais de 80 países e temos orgulho em mais de 80 países e temos orgulho em mais de 80 países e temos orgulho em mais de 80 países e temos orgulho em mais de 80 países e temos orgulho em mais de 80 países e temos orgulho em mais de 80 países e temos orgulho em mais de 80 países e temos orgulho em mais de 80 países e temos orgulho em mais de 80 países e temos orgulho em mais de 80 países e temos orgulho em mais de 80 países e temos orgulho em mais de 80 países e temos orgulho

de ser uma das maiores produtoras de ser uma das maiores produtoras de ser uma das maiores produtoras de ser uma das maiores produtoras de ser uma das maiores produtoras de ser uma das maiores produtoras de ser uma das maiores produtoras de ser uma das maiores produtoras de ser uma das maiores produtoras de ser uma das maiores produtoras de ser uma das maiores produtoras de ser uma das maiores produtoras de ser uma das maiores produtoras de ser uma das maiores produtoras de ser uma das maiores produtoras

verticalmente integradas de papel e celulose. verticalmente integradas de papel e celulose. verticalmente integradas de papel e celulose. verticalmente integradas de papel e celulose. verticalmente integradas de papel e celulose. verticalmente integradas de papel e celulose. verticalmente integradas de papel e celulose. verticalmente integradas de papel e celulose. verticalmente integradas de papel e celulose. verticalmente integradas de papel e celulose. verticalmente integradas de papel e celulose. verticalmente integradas de papel e celulose. verticalmente integradas de papel e celulose. verticalmente integradas de papel e celulose. verticalmente integradas de papel e celulose.

A sustentabilidade nos trouxe até aqui.A sustentabilidade nos trouxe até aqui.A sustentabilidade nos trouxe até aqui.A sustentabilidade nos trouxe até aqui.A sustentabilidade nos trouxe até aqui.A sustentabilidade nos trouxe até aqui.A sustentabilidade nos trouxe até aqui.A sustentabilidade nos trouxe até aqui.A sustentabilidade nos trouxe até aqui.A sustentabilidade nos trouxe até aqui.A sustentabilidade nos trouxe até aqui.A sustentabilidade nos trouxe até aqui.A sustentabilidade nos trouxe até aqui.A sustentabilidade nos trouxe até aqui.A sustentabilidade nos trouxe até aqui.














anuncio_sustentabilidade 21x30.indd 1 3/18/11 12:01 PM

SILvIcuLturE oF PLAntEd ForEStS

GENERAl oUtlook

SECtoRAl oUtlookS

SIlvICUltURE hIGhlIGhtS IN 2010

YEARlY PlANtEd AREA

FoRESt tEChNoloGY ANd PRodUCtIvItY

INvEStMENtS

2CHAPTER

50 CHAPTER 2 :: silviCulTuRE oF PlAnTEd FoREsTs

Silviculture of Planted Forests2CHAPTER2 SIlvICUltURE oF PlANtEd FoREStS

2.1 GENERAL OUTLOOK

2.1.1 Economic Conjuncture in 2010

Although the developments of the global financial and economic crisis still remain unpredictable during the year 2009, several initiatives have been adopted by the National Monetary Council (CMN) and the Central Bank of Brazil (BC) to maintain the level of economic activity and the normality of the national financial system. Among the main measures adopted, emphasis was given to reducing the benchmark interest rate. Moreover, the Central Bank was authorized to use part of international reserves to finance Brazilian companies abroad.

Despite measures adopted, the indicators of the Brazilian economy in 2009 (Graphic 2.01) reflected the international scene. It is noteworthy, however, that the levels presented also demonstrated the capacity of the national economy to face the effects resulting from the crisis.

In 2010, the national economy has consolidated its growth trend. The level of economic activity, expressed by GDP growth (7.5%) was the highest since 1985 and has raised the country’s economy to 7th place among the largest world economies. Among the major emerging economies, the expansion in Brazil stood out among the most representative, only behind China and India. It is noteworthy that the factors that led to this growth are directly related to high domestic consumption, as a result of the rise in wages, credit expansion and increased government spending.

Last year, the National Consumer Price Index (IPCA), which measures official Brazilian inflation, registered an increase of 5.8%, above the target set by the Central Bank (BC) 4.5% and at a level equivalent to that presented in 2008. According to IBGE, 40% of the IPCA arose from the increase in food prices, which rose 10.4% in 2010.

With regard to foreign exchange, taxation of foreign investment in the Brazilian stock market only temporarily eased the falling dollar. So the average price in 2010, on a downward trend, was R $ 1.76 / $ 1.00, 12.0% below the 2009 indicators.

The prime rate, the Selic, rose again in the second half. The average rate for 2010 was 10% per year, increase of 0.1% over 2009.

According to estimates by the National Confederation of Industry (CNI), the unemployment rate reached its lowest (6.8%) of the whole series started in 2002, reflecting the formal economy growth.

One of the main barometers of investor confidence in the Brazilian economy, the Emerging Markets Bond Index Plus (EMBI +) calculated by JP Morgan Chase Bank, commonly known as Country Risk, closed the year 2010 to 202 points (average) before the 306 points, recorded in 2009.

51silviCulTuRE oF PlAnTEd FoREsTs :: CHAPTER 2

Graphic 2.01 Evolution of the main Brazilian macroeconomic indicators, 2003 – 2010

GDP Variation (%) Interest Rate – Selic (%)

2003 2004 2005 2006 2007 2008 2009 2010

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

-1.0

-2.0

1.1

5.7

3.2

4.0

6.15.2

-0.6

7.5

%

2003 2004 2005 2006 2007 2008 2009 2010

23.1

16.4

19.1

15.1

12.0

12.5

9.9

10.0

25.0

22.5

20.0

17.5

15.0

12.5

10.0

7.5

5.0%

Inflation (%) Exchange Rate – Annual Average (R$/US$)

2003 2004 2005 2006 2007 2008 2009 2010

9.3

7.6

5.7

3.1

4.5

5.9

4.3

5.9

10.0

9.0

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

%

2003 2004 2005 2006 2007 2008 2009 2010

3.1

2.9

2.4

2.2

1.91.8

2.0

1.76

3.2

3.0

2.8

2.6

2.4

2.2

2.0

1.8

1.6

1.4

R$/U

S$

Unemployment Rate (%) Brazil Risk

2003 2004 2005 2006 2007 2008 2009 2010

10.5

9.710.2

9.28.9

7.8

9.1

6.8

12.0

11.0

10.0

9.0

8.0

7.0

6.0

5.0

4.0

%

2003 2004 2005 2006 2007 2008 2009 2010

837

539

398

235180

299 306

202

1,000

900

800

700

600

500

400

300

200

100

0

Source: IPEA, BC, BB and BM.

It should be noted that the tripod formed by high real interest rates, overvalued currency and eminent inflationary pressure, characterized the year 2010 and will remain a challenge for the planted forest sector.


Silviculture of Planted Forests2CHAPTER2.2 SECTORAL OUTLOOKS

2.2.1 Brazilian Forest Market – Context and trends

The analysis of the recent history of the forestry sector shows three distinct phases (Figure 2.01). The first phase (1960‑1980), responsible for the formation of the forest base, resulted from a “strategic policy” of government tax incentives to form forest plantations. The second phase (1980 – 2000) refers to the professionalization of the forestry sector. In the third phase (2000‑2010) there was the consolidation of Brazil as a major international player of the planted forest sector. This phase was characterized by the expansion of plantation areas and the consolidation of technological development in the sector (productivity gains).

Figure 2.01 Evolution of the Brazilian Forest Business

Generation of Forestry Base(1960-1980)

• NdP

• vocation

• tax Incentives

• learning Curve

• low Productivity

• Begin Industrialization Process

Consolidation ofForestry Bussiness

(1980-2000)

• Extraction Sustainability

• Genetically Improvement

• Increased Productivity

• Business Expansion

• diversification of Uses

• Competitively

• Socio-environmental forces

• Increasing Industrialization

• Regional Clusters

WordwideOperation

(2000-2010)

• Sustainable development

• New Frontiers

• New Products/Processes

• optimization of logistics

• Biotechnology

• New Investors

• Brazil International Player

• Intensification of competition

Source: Pöyry Silviconsult (2011).

The main forces sustaining and expanding the competitiveness of the forestry sector are based on the tripod site, technology and management, the current dynamics of the Brazilian economy, the increasing demand for products and renewable energy and changing the global development model, increasingly based on the concept of sustainability.


Conversely, forces to contain the forest sector relate to Brazilian infrastructure bottlenecks, cost and availability of arable land (particularly in regions where the clusters are well established), the lack of effective public policies and public sector development, the delay of environmental licensing processes and, finally, to government imposed restrictions or limitations for the development of activity, for example, the recent restriction of land purchases by Brazilian companies with foreign capital exceeding 50%.

Besides the abovementioned drivers, the socio‑environmental movements, the proposed new forest code, the role of planted forests as carbon sinks in the global warming scenario, the rise of new international players and the organization of the Brazilian forest market (vertical) are important elements to consider.

Figure 2.02 Main driving forces in the new economic order

• Restrict Access to Native Forests• Competitively (Site-Management-Technology)• Stimulation of the Brazilian Economy• Increasing Demand for Renewable Products• Renewable Energy• Payment for Environmental Services

• Infrastructure

• Conflict for Water

• land Cost and Availability

• deficiency of Government Policies

Socio-Environmental M

ovements New Forest C

ode Market In

formatio

n

World Competiti

on Accountabilit

y Global W

arming

Sust

enta

tion

and

Exp

ansi

on F

orce

s

Containment Forces

Source: Pöyry Silviconsult (2011).

Based on these analyses, the key trends for the forest sector can be outlined.

In the short and medium terms:

• Increaseinforestplantationarea. • Intensificationofforestbusinessmigrationtothesouthernhemisphere(especiallyLatinAmericaandAfrica). • ConsolidationofnewBrazilianforestfrontiers. • PartialreplacementofPinusplantationswithEucalyptusforestsinSouthernandSoutheasternBrazil. • Developmentofnewmarkets(productsandbusinesses,suchasbio-refineriesandbio-energy).


Silviculture of Planted Forests2CHAPTER In the long term:

• ForestactivitystabilizationandreductioninsouthernBrazilandgrowthinCenter-westandNorth-east • IncreaseduseofEucalyptusasamultiproduct • Consolidationofforestclustermodel • IncreasedcompetitivenessofothercountriesinSouthAmericaandAfrica • Newforestproducts(energy,bio-productsandpaymentforenvironmentalservices) • Increasedimportanceofsilvicultureinclimatechangecontrolsuchastheacknowledgementandvaluationof

carbon credits generated by growing forests. • Growingimportanceoftheforestrysectorintheeconomy.

In short, a positive scenario is being outlined in the medium and long terms for the forest sector. However, a series of challenges shall be faced until good results consolidate.

2.2.2 Pulp & Paper

The Brazilian short fiber pulp production (Eucalyptus) emerged with the aim of standing as a local alternative to the product imported from Europe and the United States. However, this product became strong and leveraged by competitiveness much higher than other countries, its production scale increased by 5 times in the past 40 years.

The results in the pulp & paper sector in 2010 pointed to significant advances in the consolidation of Brasil both in the foreign and in the domestic market, indicating that the sector overcame the international financial crisis of 2009, increasing production and recovering exports revenues.

The national pulp production totaled 14.1 million tons in 2010, a growth of 4.5% compared to the previous year. The current production level places Brazil in 4th place in world ranking of pulp producers. In the same period, the domestic consumption reached 6.1 million tons, 9.1% higher than the record in 2009.

Accumulated pulp exports in 2010 reached 8.8 million tons, a growth of 2.5% against the previous year. External sales totaled US$ 4.8 billion, an increase of 43.6% against 2009. Europe and China remain the two largest destinations for Brazilian production.

According to Bracelpa, Brazilian companies produced 9.8 million tons paper in 2010. Of this total, nearly half related to printing and writing paper, whereas paper production for packaging totaled 4.8 million tons.

Paper exports in 2010 grew 3.3%, reaching 2.07 million tons, whereas domestic sales grew 5.0%, totaling 5.4 million tons. Latin American countries remained as the most relevant paper market, increasing export values by 28.8%, and accounting for 56.0% of the overall value of international sales. External sales totaled US$ 2.0 billion, an increase of 19.1% against 2009.

Again according to Bracelpa, the performance in 2010 favors the beginning of a new expansion cycle in the sector, predicting investments of US$ 20 billion in the next ten years, aiming at forest base and pulp & paper production, growing domestic demand and expanding, emerging markets.

Prospects for 2011 point to the importance of two major constraints to the segment development: exchange rate and growth pace in emerging markets (especially China).


2.2.3 Metallurgy and Charcoal

2010 was marked by the recovery of the national economy. However, despite the strong Brazilian economic

growth in 2010, some sectors such as the pig iron – largest charcoal consumer in the country – remained in crisis. Three

factors definitely contributed with the continuity of the unfavorable economic situation in the sector, which began in

the end of 2008. The first factor was the strong dependence of the external demand, hampered by the sharp reduction

of purchases from large American and Asian consumers, who substituted the Brazilian pig iron with products from Russia

and Ukraine. The second factor was the iron exports expansion that contributed with the reduction of domestic pig

iron consumption, used in steel manufacturing. The third factor – that also affected (and continues affecting) all other

national exporting sectors – was the strong real exchange valuation, that helped to reduce the internal compensation for

the exported product. These combined factors, compromised the sector’s recovery and delayed production resumption

which, for these reasons, have not reached pre‑crisis levels yet.

As a result of the above mentioned factors, until the end of 2010 there was a high idleness rate in the charcoal

pig iron production. In Brazil, the annual production was only 1/3 of the installed capacity and only 56.0% of the

furnaces operated. In the Carajás (Maranhão‑Pará) mining region, the largest national production, only 30% of the

furnaces were operating and production reached 59.0% of installed capacity. In Minas Gerais, largest national producer,

only half of the furnaces were operating and production reached 41.0% of its capacity. The independent national

production, estimated by the Instituto Aço Brasil (IABr), was 5.8 million tons, 36% higher than the volume produced in

2009 (4.3 million tons).

Exports fell even further in 2010. Last year, 2.3 million tons (45.0% of the national production) were exported, a

drop of 26.0% compared to 2009. The Carajás industrial region stood out as the main exporting region. The United States

is still the largest buyer. China, the second largest importer, reduced their purchase of national pig iron by 78.0%, acquiring

only 261 thousand tons against 1.2 million in 2009.

The continuous national metallurgy crisis is contributing with the resumption of discussions, started in the 1960’s

and resumed in the 1980’s, around the adoption of measures that allow value addition to the national pig iron. One of the

alternatives for the sector, especially for independent producers, is verticalization or integration in the production of steel

and iron alloys.

The national producers, due to an increased demand that started in December 2010, expect the sector – even

though a partial one – to recover in 2011. Some metallurgy industries are reactivating their furnaces and resuming

production to meet the demands of the foreign market. According to AMS, the recovery of the pig iron sector reflected

in the charcoal market, especially in the last two months of 2010.

2.2.4 Wooden panels

Over the past 10 years (2000‑2010), the annual wooden panel production grew from 2.7 million tons to 6.4

million tons, that is, an average growth of 8.2% per year, consolidating its participation in some consuming segments,

especially the wooden furniture industry. Similarly, the consumption of panels also grew from 2.6 million tons in 2000 to

6.5 million in 2010 – an increment of 8.7% per year.


Silviculture of Planted Forests2CHAPTER In 2009, with the effects of the world financial crisis, various national products had dramatic reductions in consumed volume. In this context, the government granted to the automotive segment and white goods (competing furniture) tax incentives and exemption on industrial products (IPI). Initially, this measure led to a problematic setting for the wooden panels segment, one of the main components in the national wooden furniture production. After the sector’s claims and as an emergency measure, the Brazilian government extended the IPI exemption to the wooden furniture and panel industry between the end of 2009 and beginning of 2010, and reduced the tax rate from 10% to 5% from April 2010.

This fact, added to the high level of activity in the Brazilian economy and the remarkable domestic consumption in 2010, leveraged the national production of wooden panels by 10.5%.

According to ABIPA, expectations towards the panel sector for 2011 are related to the behavior of economic activities in the last months and the strong domestic consumption as they are determining indicators for future projection. Structural factors such as real increase in income, employment expansion, greater supply of credit, GDP growth and the favorable environment in civil construction can further strengthen public policies in the housing sector, increasing the demand for furniture and, consequently, industrialized wooden panel consumption.

In addition, an increased nominal installed capacity is predicted for 2011 in view of the startup of new industrial units and line expansion of MDF, HDF and MDP operating units in the country.

2.2.5 Mechanically Processed timber

Plywood, sawn wood, veneer and VAP (value‑added products such as doors, windows, frames and furniture parts) are all products which are comprised in the mechanically processed timber segment.

Since its early stages of development, the mechanically processed timber trade has focused primarily on foreign markets, featuring higher levels of growth and recognition in the end of the 90s, boosted by the strong construction sector in the USA at the time.

In 2010, plywood and sawn timber exports were partially impaired due to the high valuation of the national currency and a worldwide price decrease. In the internal market, however, healthy construction sector played a major part in the trade’s 14.1% growth. Among the factors that encouraged internal demand, we should highlight the manufactured goods tax reduction, which boosted the furniture trade, and the growth in the packaging trade and the construction sector.

In 2011, a negative scenario (R$1.60/US$1.00 exchange rate and current worldwide prices) could mean that the plywood and sawn timber exports would not surpass the results obtained in 2010. Conversely, the internal market still features a favorable perspective regarding growth in demand. That is due to the expected investment to be done in all host cities for the upcoming World Cup and Olympic Games.


2.3 SILVICULTURE HIGHLIGHTS IN 2010

2.3.1 legislation – Brazilian Forestry Regulations Revision

Brief history

The revision of the Forestry Regulations, Law Nº 4771, of September 15, 1965, was brought forward by the edition of the Decree no 6514, by the Executive Power, of July 22, 2008, which “refers to management sanctions and defaults to the environment, establishes the federal administrative process to be followed for examining such defaults, and offers further provisions”.

As Decree 6514/2008 could not be immediately applied due to its requirements regarding Legal Reserve and PPAs, and as the Department of Agriculture, Livestock and Food Supply and the Department of Environment could not come to an agreement toward the negotiations promoted in the second half of 2008, its effects (penalties) were postponed until December 2009, by the Decree Nº 6695, of December 15, 2008.

As no agreement was reached between rural producers and environmental groups throughout the year 2009, the effects of the Decree 6514/2008 were once again postponed, now to June 2011, by the Decree No. 7029, of December 10, 2009, while the discussions on the revision of the Decree 6514 continued to run and evolved into the idea of revising the Forest Regulations themselves.

In response to the campaign by rural producers and members of the parliament defending agribusiness for the revision of the Forestry Regulations, the Chamber of Deputies assigned a Special Commission to the matter in 2009, examining all of the several propositions being processed by the Chamber and deliberating on the subject.

Based on an older bill, Bill Nº. 1876/1999, other nine projects with similar characteristics were attached and then debated by the Special Commission through public hearings in several Brazilian regions, and counted on the presence of non‑governmental organizations, rural producers, the Department of Public Prosecution, universities and research institutes.

On July 6, 2010, the Special Commission passed the alternate bill presented by reporting Deputy Aldo Rebelo (available on http://www.camara.gov.br/sileg/MostrarIntegra.asp?CodTeor=787771, in Portuguese), which was forwarded to the Chamber Bureau for voting in a plenary assembly. Due to the 2010 elections and National Congress recess, the matter was not voted that year, and was appraised by the new legislature, which took office on February 1st, 2011.

Pressured by the parliament members interested in voting Deputy Aldo Rebelo’s alternate bill and by agribusiness sectors, and given the connection among them and environmental groups and their parliament members, the President of the Chamber, Deputy Marco Maia, created in March 2011, the Forestry Regulations Conciliation Chamber workgroup aiming to make voting of the Bill Nº. 1876/1999 possible in plenary assembly, based on the alternate bill passed by the Special Commission on July 6, 2010.


Silviculture of Planted Forests2CHAPTERTechnical aspects

Law Nº 4771, of 1965, has been constantly amended by several provisions such as Law Nº 7511, of 1986, Law Nº

7803, of 1989, Law Nº 8171, of 1991, Provisional Measure Nº 1511, of 1996, Law Nº 9605, of 1998 (Law of Environmental

Crimes), Provisional Measure Nº 1956‑50, of 2000 and Provisional Measure Nº 2166‑67, of 2001. Between 1965 and 2001,

seven provisional measures have been edited, adding up to more than 70 new editions, turning the legislation into an

entanglement of rules passed without the population’s endorsement.

Status of the planted forests sector

The eucalyptus & Pinus planted forests are licensed, sustainable ventures, the majority of which is certified under

the FSC and/or CERFLOR systems criteria, and thus comply with the ruling legislation. For legal coverage to be obtained

for existing planted areas and new areas of expansion, however, the planted forest sector, represented by the ABRAF, puts

forward the following pleas: a) acknowledgement and authorization of establishment for consolidated forests planted

on hilltops; b) inclusion of permanent preservation areas (PPAs) in the calculation of legal reserve areas; and c) equal

treatment between the cultivation of planted forests and other cultures; all of these being items included in Deputy Aldo

Rebelo’s alternate bill, which is being processed by the Chamber of Deputies.

2.3.2 Restrictions to the Acquisition of land by Foreigners

On August 23, 2010, the Federal Official Gazette published the technical opinion AGU/CGU LA Nº 1/2008, which

revoked AGU’s previous technical opinions on the application of Law Nº 5709, of 1971, opening new interpretations

to the referred law and creating restrictions to the acquisition of land by foreigners, including foreign‑owned Brazilian

companies. AGU’s opinion, approved by the President of the Republic, is binding to all sectors of Executive Power, and

shall be observed in all Executive bodies’ actions and procedures.

Since then, new acquisitions by foreign‑owned Brazilian companies depend on the approval of several

departments and bodies, subject to the limitation of 50 undefined exploration modules, the size of which depend on the

region and the criteria set forth by IBGE and INCRA, and may not surpass the percentage established for the municipality

in which the intended area is located.

As consequence, investments of more than R$37.23 billion in new areas destined to Eucalyptus & Pinus

planted forests have been suspended or stopped, along with new plants for the transformation of timber produced by

these forests.

The reason for the new interpretation of the mentioned law, according to the Federal General Consultant who

produced the technical opinion, is based on the concept that the planet’s fertile lands are becoming scarce. Also, based on

the UN population growth rate forecast, to approximately 9 billion people in 2050, several countries of Asia and the Arab

World, lacking land for producing food for its own population, are acquiring lands in Africa, Cambodia, Laos and other

countries, resulting in clear loss of sovereignty by the respective nations over their territories.

According to surveys, Brazil owns 15% of the world’s fertile land and needs to protect such wealth against initiatives

by countries that utilize sovereign wealth funds to buy lands aiming to ensure their respective population’s food supply.


The sectors affected by this technical opinion, including the Eucalyptus & Pinus planted forests and related

plants, as well as agribusiness sectors such as sugar cane, grains, etc., appeal to the Executive Power since the publication,

seeking a negotiation to exclude from the aforementioned limitations acquisitions of land destined to the development of

defined projects such as jobs creation, social responsibility, tax revenue, etc.

Conversely, interested sectors proposed procedures that would allow the government to monitor the purchase

of land by foreigners, without, however, inhibiting the acquisition of land destined to defined and productive projects

resulting in the creation of jobs, tax revenue and social responsibility programs.

On the other hand, National Congress is already taking part in this debate, assessing the proposals of amending or

passing laws, and which make a distinction between productive foreign investment and other types of foreign investment

that could represent risk to the national sovereignty.

2.3.3 National Policy for Planted Forests

In 2009, the Sectoral Chamber for Planted Forests of the Department of Agriculture, Livestock and Food Supply

developed the Strategic Schedule for the Planted Forests Sector (available on: www.abraflor.org.br/agenda/agenda.asp, in

Portuguese). It proposes, in the Action Plan No. 3, the creation of a national policy supporting forest planting and public

policy proposals aimed at supporting the development of planted forests and the respective legislation projects expected

to become actual laws.

In response to this request, the Presidential Strategic Department elected the Planted Forests subject as a priority

matter to be approached by the Department, and collected preliminary information with help from the Sectoral Chamber

of Planted Forests and other entities in the sector, including ABRAF.

As a result, the Strategic Department, through the Ordinance Nº 90, published in the Federal Official Gazette

of August 23, 2010, created an Interdepartmental Workgroup to be coordinated by the Strategic Department aiming

at developing and proposing a National Policy for Planted Forests, including the use of timber as fuel and industrial

input. The Workgroup tasks were performed timely and concluded in March 2011, resulting in a Report that proposes all

guidelines for setting forth a National Policy for Planted Forests.

The following stage is the disclosure of the Report regarding the Executive Power, involving all of the several

Departments and respective bodies in order to encourage the Government to develop a Bill for the Executive Power,

establishing a National Policy for Planted Forests.

2.3.4 CoP16 and the Forest-Based Sector

The 16th Conference of the Parties of the United Nations Framework Convention on Climate Change was held

between November 29 and December 10, 2010, in Cancun, Mexico, seeking to carry on the process established in the

action plan adopted at COP13, three years earlier, in Bali. In short, the meeting resulted in the approval of decision packages

related to the two Bali Action Plan pathways: long‑term actions regarding the Convention; and the Kyoto Protocol. The

first commitment period of the latter will be over by the end of 2012. Differently from all the high expectations raised


Silviculture of Planted Forests2CHAPTERtoward the last COP, in Copenhagen, the meeting in Cancun featured far more realistic expectations matching the

political reality and the actual possibilities of progress for all stakeholders. Although COP16 results were well below what is

necessary for the full continuation of the regime after 2012, important advances could be noted.

The Conference started with a strong statement issued by Japan. The nation declared itself against a second commitment period toward the Kyoto Protocol in the absence of clear commitments assigned to other nations. By the end of the event, however, the Parties had committed themselves to work together in order to avoid a gap between commitment periods. Besides the debates on legally binding goals for developed nations (Annex 1) after 2012, Nationally Appropriate Mitigation Actions (NAMAs) were also discussed, regarding the commitment assumed by developing nations to mitigate emissions (non‑Annex 1), including Brazil. Such actions shall be registered and submitted to Measurement, Reporting and Verification (MRV), according to methodologies and criteria still to be determined. It is worth mentioning that Brazil has presented five sects oral mitigation plans regarding the Copenhagen Accord (campaign against deforestation in the Amazon and the Brazilian savanna mitigation measures in the energy and agriculture industries, and use of renewable charcoal in the iron and steel metallurgy). Besides the inherent relationship between planted forests and the iron and steel metallurgy trade, the forest‑based sector is also considered in the agriculture trade. IN both cases, the Clean Development Mechanism (CDM) plays an essential role.

We should also highlight the creation of the Green Climate Fund, expected to receive subsidy from developed countries, adding up to US$ 30 billion until 2012, and US$ 100 billion per year until 2020. The proposed Fund will have the World Bank as trustee. Discussions regarding the mechanism of mitigation for deforestation‑related emissions and the promotion of forest conservation (REDD – Reducing Emissions for Deforestation and Forest Degradation) also evolved.

Discussions on the regulations related to the consideration of changes to LULUCF (Land Use, Land‑Use Change and Forestry) did not present any major advance. All major forestry‑related definitions were maintained and a simple text was adopted, opening a channel for discussing the amendments and additions and future meetings.

Regarding the CDM, the creation of standardized baselines for carbon credit projects was authorized, seeking to facilitate and increase the amount of beneficiary projects and countries. It is important to underline that Brazil has already registered two reforestation projects at the CDM, which, despite significant, is still low when considering the Brazilian potential. In a way, the main impediment for the expansion of forestry projects in Brazil is the restriction imposed by the European Union, which does not accept this type of credit in their respective emission reduction system.

Finally, we could see substantial discussions on a very important subject to Brazil and other developing nations: the eligibility of forest reform areas to the Clean Development Mechanism (CDM), which is known in the meetings as “Forests in Exhaustion” (see box below for details). In Cancun, the subject was debated at the Subsidiary Body for Scientific and Technological Advice (SBSTA).

Alongside some African countries, Brazil defended the subject. Approving this concept could considerably increase the eligible area for CDM forestry projects, since that would allow for the reuse of areas previously converted without the need for new areas. Projects’ goals could focus on the generation of new planted biomass stock for production or for the recovery of degraded areas featuring, for instance, native species.

Nevertheless, the discussion is far from reaching the consensus required for approval. There are still hindrances in regards to the concept’s legal interpretation and definition, and to the ways of distinguishing the subjects of the


discussions on REDD, which holds a distinctive purpose (to value existing forest stocks). At the end of the debate, it was decided that opinions and comments on the matter would be requested from the Convention Parties, in writing, to be submitted until March 28, 2011. Manifests received will be compiled and sent to COP17, to be held in the end of 2011, in South Africa, so that the debate may resume.

Forests in Exhaustion: proposal to allow areas that contained planted forests in exhaustion in 1989 (non‑native forests) to be used for the development of new reforestation projects, focused on economic gain or forest reestablishment, observing the CDM. The logic is based upon the fact that the harvesting of planted forests in exhaustion is not deforestation (since they are specifically planted for future use of the timber). The implementation of new reforestation activities in such areas could and should be encouraged, minimizing the need for new areas for planting. Current regulations only allow the use of the CDM to encourage new planting in areas with no forests, or planted forests for that matter, exhausted and in the process of conversion for a different use. That holds back the exploitation of more than 5 million hectares in Brazil, all of which already converted since the establishment of the tax incentives. In less developed countries, figures surpass 10 million hectares, which reinforces the importance of the subject for sustainable development and mitigation of climate changes.

2.3.5 National Forest Inventory

The 1983 national forest inventory was the first survey performed in Brazil that was destined to estimate the planted forest area. It also became reference for other studies, and helped the government weigh the tax incentive policy that had been established from 1966 to 1985.

In 2010, by means of the Brazilian Forestry Service’s initiative, the National Forestry Inventory (NFI) took off, seeking to assess the forestry are in Brazil, both native and planted. According to the BFS, NFI’s methodology was developed through a partaking process designed to standardize and adjust the information surveys to each region’s biome. Data collection sampling method in the field will be based on the systematic distribution of conglomerates (sampling units) over a national network of equidistant sample points (grid). Information will be collected to evaluate forest attributes through the measurement of dendrometric variables, identification of species of trees and other qualitative and quantitative variables that will allow for a characterization of the forestry ecosystem on each of the sample points.


Silviculture of Planted Forests2CHAPTER2.4 YEARLY PLANTED AREA

2.4.1 General concepts

In order to facilitate general understanding in regards to the forestry planting information presented in this section, we describe below the concepts of yearly planted area and planted forest total area.

• Yearly planted area: planting performed throughout each year, including: − New planting (forestry base expansion); and − Reestablishment (post‑harvest replanting). − In summary:

Pn = Np + Ref

− Being: n: year assessed Pn: annual planted area in the year n Np: new planting (expansion to new areas) in the year n Ref : reestablishment areas in the years n

• Totalyearlyplantedarea. The area with sprouts in the respective year is added to the area indicated above as established by this yearly publication:

Pnt = Pn + Reb

− Being: n: year assessed Pn: annual planted area in the year n Pnt: total annual planted area in the year n Reb: areas with sprouts (conduction of the tree base sprouting after harvest) in the year n

• Totalareawithforestsplantedinagivenyear:

Fpn = Fpn-1 – (Ac + Aou) + (Ref + Reb + Np)

− Being: n: year assessed Pn: annual planted area in the year n Pnt: total annual planted area in the year n Np: new planting (expansion to new areas) in the year n Ref : reestablishment areas in the years n Reb: areas with sprouts (conduction of the tree base sprouting after harvest) in the year n


Fpn: total area of planted forests in the year n Fpn-1: total area of planted forests in the previous year Ac: harvested area in the year n Aou: area converted for other use in the year n

The main planted forest formation and management alternatives are called: new planting (expansion to new areas), forest reestablishment and Eucalyptus sprout (also known as management through “lopping”). Figure 2.03 presents an illustration of these alternatives integrated to the concept of yearly planted area and total of planted forests.

Figure 2.03 Diagram with the concepts of yearly planted area and total of planted forests

Fp 2010 = Fp 2009 – (Ac 2010 + Aou 2010) + (Ref 2010 + Reb 2010 + Np 2010)

P 2010 = Np 2010 + Ref 2010

Pt 2010 = P 2010 + Reb 2010

Growing Planted Forest

PlantedForest

DiferentAges

New Plantations (Np)

< 1 year

Coppice (Reb)

0 - 1 year

Harvested Areas (Ac)

Eucalyptus: 7 yearsPinus: 5-25 years

Reform (Ref)

0 - 1 year

Other Uses (Aou)

Source: ABRAF yearly publication(2010), adapted by Pöyry Silviconsult (2011).Photos: Pöyry Silviconsult (2011).Harvest: – Cutting off and extracting of timber from the forest at the end of the production cycle, which may be done manually or mechanically.New Planting: Expansion of the planted areas to areas previously used for other cultures.Reestablishment: Management of planted forests by planting after harvest is performed in the area previously occupied by planted forests. It does not incur in expansion of the planted area.Sprout (Coppice): Management of planted forests by conducting the sprouting after cutting is performed in the area previously occupied by planted forests (e.g. Eucalyptus). It does not incur in expansion of the planted area.


Silviculture of Planted Forests2CHAPTER2.4.2 total Yearly Planting by Individual Companies Associated to ABRAF

Graphic 2.02 brings the growth trend in the area with total yearly planting done by individual companies associated to ABRAF (2000 to 2010). In short, 2010 presented an increase in this area, adding up to 351,411 ha of Eucalyptus and 8,252 ha of Pinus. These figures were 55.2% and 60.4% higher respectively than 2009.

We would like to call attention to the fact that Eucalyptus planting grew at 11.4% per year from 2000 to 2010, after strong reduction in 2009. Regarding Pinus, planting had been presenting yearly decrease in the assessed period at 9.4% per year.

Graphic 2.02 Evolution of the yearly planted area with Eucalyptus and Pinus forests¹ by individual companies associated to ABRAF, 2000-2010

450

400

350

300

250

200

150

100

50

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

183

201

206

341

401

226

351

5 8161519231922182122

267

356

179

230

119

228

361

417

360

232

291

371

200

249

141

1,00

0 ha

/yea

r

PinusEucalyptus total

Source: ABRAF yearly publication (2010) and Individual Companies Associated to ABRAF (2011).¹ Includes expansion, forest reestablishment and sprouts, the latter only for Eucalyptus.

As for new planting and reestablishment areas (Graphic 2.03), planting was resumed in 2010, at 58.3% and 75.5% respectively. Nevertheless, new planting added in 2010 (105,959 ha) did not reach the same level presented in 2008. The same way, reestablishment areas did not reach 2008 figures, adding up to 181,541 ha.

Planting done via sprouting presented, in 2009 and 2010, likelihood of increasing in relation to 2008. A 14.0% growth was seen in 2010. The sprouting area went from 56,050 ha to 63,911 ha.


Graphic 2.03 Evolution of the total yearly planting area with Eucalyptus by type of formation (new planting, reestablishment and sprout)¹ by the individual companies associated to ABRAF, 2008-2010

18.6

56.1

63.9

187.8

66.9106.0

194.3

103.4

181.5

2008 2009 2010

450

400

350

300

250

200

150

100

50

0

1,00

0 ha

/yea

r

New Plantation Reform Coppice

Source: ABRAF yearly publication (2010) and Individual Companies Associated to ABRAF (2011).¹ See concepts illustrate on Figure 2.05.

Graphic 2.04 illustrates the evolution in the total yearly planting area by individual companies associated to ABRAF between 2005 and 2010, by planting modality (own, fostering and leasing).

Generally, we can observe decrease in the total yearly planting area in all categories in 2009, and a comeback in 2010. Planting in owned land in 2010 was 60.2% higher than 2009 for Eucalyptus and 102.1% for Pinus. Fostering presented a 15.1% raise in Eucalyptus planting and a 25.3% reduction for Pinus. Finally, leasing planting grew 67.7% for Eucalyptus and dropped 80.0% for Pinus.

Graphic 2.04 Evolution of the total yearly planting area by individual companies associated to ABRAF by planting category, 2005-2010

500

400

300

200

100

0

EUCALYPTUS PINUS

own land outgrower Scheme leasing

1,00

0 ha

/yea

r

3140

196

3366

243

45

64

247

63

71

268

2830

168

4834

270

25

20

15

10

5

0

2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010

1,00

0 ha

/yea

r

2

6

16

5

5

10

1

5

10

0

6

10 114

01

8


Silviculture of Planted Forests2CHAPTER2.5 FOREST TECHNOLOGY AND PRODUCTIVITY

2.5.1 Forest Productivity

Edaphoclimatic and land conditions, along with the historical policy for investment in research and development, the verticalization of the sector and the labor employed in the sector allow for the highest productivity per hectare and, as a result, the shortest harvest cycle for forest planting in Brazil (Graphic 2.05).

Graphic 2.05 Comparison of forest productivity between confers and hardwoods in Brazil¹ and selected countries, 2010

45

40

35

30

25

20

15

10

5

0

4

7

18

25

15

22

1820

3

10 1012

2

6

22

18

37

41

Sweden Indonésia Austrália Chile USA Portugal Finlândia South Africa Brazil 2

hardwood Softwood

m3 /h

a,ye

ar

Source: ABRAF yearly publication (2010) and Individual Companies Associated to ABRAF (2011).¹ Index used: Weighed MAI (in relation to the planted area) of the areas comprising Eucalyptus and Pinus forest planting of companies associated to ABRAF.² Eucalyptus – MAI of the companies associated to ABRAF; Pinus – MAI of the companies associated to ABRAF.

As a result, ABRAF companies have been obtaining considerable gains in the Mean Annual Increment (MAI) due to high investments, especially in forest research and development, seeking primarily genetic and forest management improvements for the major species of interest.

Companies associated to ABRAF are responsible for the highest commercial MAIs in the country. The weighed mean productivity, in relation to the planted area, of Eucalyptus planting among ABRAF companies went from 36.7 m3/ha.year in 2005 to 41.3 m3/ha.year in 2010 (Graphic 2.06). The same way, planting MAI went from 30.7 m3/ha.year to 37.6 m3/ha.year.


Graphic 2.06 Evolution of the Mean Annual Increment (MAI) of forest planting by individual companies associated to ABRAF, 2005-2010

45

40

35

30

25

20

15

10

5

0

35.0

39.4

30.7

36.7 37.739.8 38.6

40.137.6

40.537.6

41.3

2005 2006 2007 2008 2009 2010

Eucalyptus Pinus

m3 /h

a,ye

ar

Source: ABRAF yearly publication (2010) and Individual Companies Associated to ABRAF (2011).

2.5.2 Energy Forests

The ever‑growing international search for renewable sources of energy has taken several nations to promote changes in the composition of their energy mix. In countries like Germany, Austria, Canada, Denmark, Finland and Sweden, production of energy from renewable sources has been encouraged by means of governmental subsidies. The European Union plans to have 20% of its energy being produced from renewable resources by 2020.

Brazil’s potential and importance in the production of renewable energy are very expressive. Data from the Brazilian Electricity Regulatory Agency (ANEEL) in 2010 reveal that energy produced from renewable sources represents 73.1% of the national energy mix (Graphic 2.07). The consumption of electric power should raise 9.4% in 2011, following the country’s economic growth. Projections for the 2012‑2020 period indicate a demand average growth of 5.2% per year. Therefore, there is room and opportunities for energy produced from biomass, not only a low cost and low investment source, but also environmentally friendly and socially and economically adequate.


Silviculture of Planted Forests2CHAPTERGraphic 2.07 Distribution of Brazil’s energy mix, 2010

hydroelectric power 66.2%

Natural gas 10.6%

Imports 7.8%

traditional biomass 6.5%

oil 5.9%

Nuclear energy 1.6%Mineral coal 1.6%other renewables energy 0.8%

Source: Brazilian Electricity Regulatory Agency (ANEEL)

Biomass is seen as a cleaner, safer supplement. That is due to the use of timber and its residues, sugarcane bagasse, black liquor (in the paper and pulp industries), elephant grass, biogas and the so called energy forests as sources for the generation of thermal and thermal‑electrical power. The energy derived from traditional biomass corresponds to approximately 6.5% of today’s electric mix (which is to say 7.9 million produced kW according to ANEEL), with potential to reach 14% by 2020.

Sugarcane bagasse represents 78.9% of the internal bioenergy market (Graphic 2.08). Due to its high energy potential, the government foresees an investment plan in the future to boost production. The Bioelectricity Program considers the development of 40 to 50 projects per year.

Graphic 2.08 Distribution of the biomass production in Brazil by installed capacity, 2010

Cane Bagasse 78.9%

Black liquor 15.5%

Wood 4.5%

Biogas 0.9%

Rice husk 0.2%

Source: ANEEL (2010).

The ethanol, biodiesel and forest programs developed in Brazil take the country to a position of international reference in terms of production of agrienergy (energy produced from agriculture, livestock or forest products).

Some factors enhance Brazil’s talent and aptitude in the matter: availability of cultivable land, high productivity in major agricultural (such as soybean and sugarcane) and forest (such as Eucalyptus) cultures, public policies are in place to support the segment, i.e. support plans from the government and research institutions, edaphoclimatic diversity, which broadens the range of species appropriate for biomass cultivation, and increased interest from national and international investors in long term contracts for the production of biomass.


The most important instrument aimed at the development of alternative sources for the production of energy is the Law No. 10,348, of April 26, 2002. It covers the growth in the energy offer through the Alternative Energy Source Incentive Program (PROINFA), as well as the Energy Development Account.

All major government programs focused on the production of biomass are fostered and supported by the Department of Agriculture and the “National Agri‑Energy Plan”, established by the Department of Agriculture, Livestock and Food Supply (MAPA). This plan sets forth the guidelines for research under four branches: biodiesel, ethanol, energy forests and use of agriculture and livestock residues. Based on the consolidation of this plan, a research unit called “Embrapa Agrienergy” was created, contemplating exclusively works in energy production from biomass derived from: residues (biogas and cogeneration), sugarcane (biogas, cogeneration and alcohol), energy forests (wood, charcoal, briquette and pellets) and oils and greases (biodiesel).

The main financial support in the expansion and modernization process of the power sector in Brazil comes from the National Bank for Economic and Social Development (BNDES), which makes several lines of investment available for energy generation initiatives.

Brazil’s forest biomass is typically composed of:

• Wasteleftonthefieldafterforestharvestingisdone,correspondingtoapproximately10%to12%ofthetotalbiomass produced at the site;

• Wastefromindustriesthatusewoodasrawmaterial;

• Forestsdestinedtotheproductionofcharcoalorwood;

• Biomassderivedfromnativeforestformationsthatbecameadequateforharvestingaftertheestablishmentof processes that changed the use of the soil (agriculture cultivations, pasture, reforestation, improvements, etc.).

The pioneer work conducted in the forest areas destined to the production of biomass started in the city of Itamarandiba, state of Minas Gerais, by the Federal University of Viçosa through the Forest Investigation Society (FIS) and alongside CEMIG and ANEEL. It comprises the experimental planting of clonal hybrid Eucalyptuses under various spacings aimed at assessing the production of biomass for short rotation energy. In terms of productivity, the Itamarandiba experiment obtained 100 m3/ha after two years of implementation.

RENABIO (National Network of Energy Biomass), funded in 2001 at the Department of Forest Engineering of the Federal University of Viçosa, state of Minas Gerais, and with support from the Department of Mines and Energy, has been focusing its efforts on research and development with Eucalyptus energy forests.

Furthermore, there are companies in the state of São Paulo that have been adopting dense clonal Eucalyptus plantations located in Avaré by using a clone that was essential in the productivity of 190 m3/ha in two years.

Other companies, which perform the experimental planting of Eucalyptus clones in dense spacings aiming the production of biomass in rotations of 1 to 4 years, focus their activities in the states of Goiás, São Paulo, Tocantins, Maranhão and Piuaí.

Advancements in research related to the definition of spacing, clones, nourishment and forest maintenance have already been obtained. In regards to the feasibility of harvesting dense forests, studies have been carried out by


Silviculture of Planted Forests2CHAPTERseveral institutions. In England, an experiment involving a head has been performed. It allows for the harvesting of willow with concomitant processing for the production of chips and may be adapted to different types of equipment, and that principle would be adopted in Brazil. However, the height reached by two year old Eucalyptus trees in Brazil makes this system unfeasible. It is believed that this model would only be viable in rotations below 12 months, although density and heating value studies should be conducted for the biomass produced derived from these plantations. The best solution so far for harvesting dense plantations is the Feller‑bunchers module and small Skidders and chippers.

Another product that has been acclaimed in Brazil, and that has been presenting fast progress, is the possibility of producing ethanol from wood material, i.e. pulp, hemipulp and pectin, all of which are polymers that compose the largest part of the structure of vegetables. There are basically three types of processes used in the production of cellulosic ethanol: Hydrolysis, Fermentation and the process of burning the biomass for producing gases.

Studies performed with ethanol produced from the pulp derived from agriculture/forest residues point out to a milder negative effect on human health and the environment, especially due to the fact that it emits lesser amounts of the fine particulate matter, a highly harmful component of the atmospheric pollution, besides emitting lower levels of gases that contribute to the greenhouse effect, a much more beneficial outcome regarding air quality. According to Jason Hill, author of the study, production costs could still be cheaper than gasoline’s.

For Embrapa researcher Cristiane Farina, the development of agri‑industrial processes feature great appeal for environmental sustainability, which is why Embrapa Agricultural Instrumentation and Embrapa Food Agri‑Industry have been working together to develop semi‑solid fermentation bioreactors for the production of enzymes.

Such bioreactors have been assessed for the production of cellulase from previously tested microorganisms by Embrapa researchers. We should underline that the process being developed involves the use of agri‑industrial residues such as substrate and fermentation. These residues stand out for being abundant and due to the low cost. This translates into an opportunity to reduce the enzyme cost. Production with these low cost enzymes may bring very relevant contributions to the country, especially in the agrienergy sector.

In 2010, Petrobras signed an agreement with American company KL Energy Corporation (KLE) to improve the technology for the production of ethanol from the sugarcane bagasse pulp. The forecast is that, by 2013, Brazil will count on a biofuel plant. The American company produces cellulosic ethanol from wood residue using a proprietary technology. One of Petrobras’ goals is to produce ethanol from sugarcane bagasse pulp, adapting the technology into a pilot plant with an estimated production of 15 million liters of the so called second generation ethanol. Initiatives like this could be adapted to the forest sector, becoming one more potential opportunity since it does not compete directly with agriculture food production, having the advantage of being aligned with energy forests.


2.6 INVESTMENTS

2.6.1 Forest Formation Investments

The investments performed by individual companies associated to ABRAF, in 2010, added up to R$ 2.4 billion, 2.3% less than the previous year. The most affected sector by the current investment reduction was lands, presenting figures 71.9% lower than 2009 (Graphic 2.09).

Graphic 2.09 Investments performed in forest and industrial activities by individual companies associated to ABRAF, 2009 and 200.

900

800

700

600

500

400

300

200

100

0

772752

855827

574

659

145123

2318 72573

102

Harvesting Plantings Industry Roads R&D Land Others and Transport

2009 2010

Mill

ion

R$

Source: ABRAF yearly publication (2010) and Individual Companies Associated to ABRAF (2011).

Observing the investments presented on Graphic 2.06 above, we can note that the largest portion of the investments is destined to three segments: (i) harvest and transport; (ii) planting; and (iii) industry, adding up to 89.9% of the total (Graphic 2.10).

Graphic 2.10 Participation of investments performed by individual companies associated to ABRAF, 2010

Plantings 34.9%

harvesting and transport 31.5%

Industry 23.4%

Roads 5.9%

others 4.2%

Source: Individual Companies Associated to ABRAF (2011).


Silviculture of Planted Forests2CHAPTER Individual companies associated to ABRAF forecast for the next five years (2011‑2015) an increase of 300% over the amount invested in 2010, and it could reach around R$ 7.6 billion (Graphic 2.11).

Graphic 2.11 Perspective of investment by companies associated to ABRAF in forest activities in the 2011-2015 period

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

3,352

2,163

467248

1,192

107 112

Plantings Harvesting Industry Roads R&D Land Others and Transport

Mill

lion

R$


The majority of current investments remains directed to planting operations (R$ 3.3 billion) and to forest harvest and transport (R$ 2.2 billion), responding respectively for 43.9% and 28.3% of the total (Graphic 2.12). Industrial investments stand out, as they should reach R$ 1.2 billion (15.6% of the total).

Graphic 2.12 Distribution of the investment perspective for companies associated to ABRAF, 2011-2015

Plantings 43.9%

harvesting and transport 28.3%

Industry 15.6%

Roads 6.1%

others 6.1%


ForESt ProductS MArkEt

MAIN PRodUCtS dERIvEd FRoM PlANtEd FoREStS

RoUNd Wood

3CHAPTER

76 CHAPTER 3 :: FoREsT PRoduCTs MARkET

Forest Products Market3CHAPTER3 FoRESt PRodUCtS MARkEt

The productive chain of the planted forest sector in Brazil features great diversity of products, comprising a group of activities that include production, harvest and wood transformation until the final products are obtained. Figure 3.01 illustrates the simplified model for this chain.

Figure 3.01 Simplified model for the forest sector productive chain

primary processing Secondary processing tertiary processing

Thermal energy

treated Wood

Veneers1

Sawnwood

Charcoal

pulp

Dissolving pulp

Industrialized Wood panels

Food industry pharmaceutical, etc ...

Furniture and Components

paper

housing

packing

housing

Naval Use

others

other

housing

rural Constructions

Industrial Consumption

tubes/plates

other

Steel

Furnitures

Furnitures

pig Iron

Iron Alloys

Beams, Boards, planks, Slats, Battens

VAWp 2

others

plywood

Forest-Based Industry, Agroindustry (grain drying), Food Processing, etc ...

Domestic and International

Market

Inputs

Machinery and equipments

Agrochemicals

Fertilizers

Seed and Sedlings

Non‑Woody products

rubber, gums, resins, Waxes, tanning Fibers, Medicines,...

Industrial Segments:

Chemical,Pharmaceutical,Automobile,Food Industry,...

Forest Production

Woody products

Sawlog,pulpwood,Fuelwood,Biomass,...

Wood Chips

Source: Adapted from VIEIRA, L. – Setor Florestal em Minas Gerais: caracterização e dimensionamento. Belo Horizonte – Universidade Federal de Minas Gerais, 2004 and ABRAF yearly publication (2010). Created by Pöyry Silviconsult.¹ HAVP (High Added Value Product) – doors, windows, frames, pavement, desks, sleepers, others..

77FoREsT PRoduCTs MARkET :: CHAPTER 3

In Brazil, there are basically 3 big groups of forest producers regarding the size and type of activity being developed:

• Vertically integrated companies: Companies that consume their own raw material, generally inserted in the following sectors: paper and pulp, manufactured wood panels, thin sheets and plywood, and sawn products and charcoal iron and steel metallurgy. They count on their own teams for forest operations, which ensures the quality of the raw material that will be used at the plant. All forest production excess is usually marketed.

• TIMOS(Timberland Investment Management Organizations): forest investment management companies linked or not to foreign pension funds (especially in the USA and Canada) that acquire forest assets to act as an independent reforestation business in the market. They intermediate the connection forest investments and investors based on the concentration of funds, the market potentiality analysis and planting operation/management. They make higher profitability possible to investors by reducing fixed capital as a result of assets acquisition. The wood produced is marketed through consumer supply agreements, in general big companies that process the wood, transforming it in higher added value products.

• IndependentOwners:Land owners (small and medium producers) who invest in forest planting as source of income through marketing wood in logs. They can establish supply agreements, operational partnership systems (especially fostering) or act independently in the market.

The wood processing happens in four different ways that characterize the following industry types:

• Primaryindustry:Performs only the processing of raw material (wood), transforming it in laminated, sawn and immunized wood, besides charcoal and chip.

• Secondaryindustry:Uses products obtained from the processed raw material (primary process) in order to obtain the final product (secondary process) destined to the end consumer or industries from the tertiary sector.

• Tertiaryindustry: Generates several higher value added products, highly specialized, in response to various needs by the end consumer.

• Verticallyintegratedindustry:counts on two or more levels of industrial aggregation (primary, secondary and/or tertiary)in the end product manufacturing, such as the integrated pulp and paper industries, featuring the primary stage when producing chips, the secondary stage when producing pulp, and the tertiary stage when paper is produced. Wood panel industries, on the other hand, include the first stage, when chip is produced, and the secondary stage, which comprises the transformation into MDP, MDF, HDF, OSB panels, etc.


Forest Products Market3CHAPTER In Brazil, 37.5% of all the wood produced is used in the production of pulp. The production of sawn wood, panels and plywood consumes 15.8%, 7.8% and 3.5% respectively. The remaining amount (35.4%) is destined to the production of logs, charcoal and other forest products (Figure 3.02).

Figure 3.02 Destination of the forest sector projects, 2010

Plywood(3.5%)

54.9% Exports

45.1% Internal market

Sawn wood(15.8%)

7.2% Exports


Log, charcoal and others (35.4%)

1.3% Exports


Panels(7.8%)

2.8% Exports


Cellulose(37.5%)

59.5% Exports


WoodProduction

(100%)

Source: Created by Pöyry Silviconsult (2011).

It is important to highlight that, with the exception of log, charcoal and manufactured wood panels, products mostly concentrated in the internal market, all other products are destined primarily to the foreign market.

A good part of the secondary products (furniture, paper, pavement, frames, iron and steel, etc.) is also exported, demonstrating thus the importance of the international scenario for the forest sector in Brazil.


3.1 MAIN PRODUCTS DERIVED FROM PLANTED FORESTS

Brazil’s extensive territorial area facilitates the development of a forest‑based industrial park throughout the country. However, companies tend to concentrate in regions where geographical and logistical aspects facilitate the generation of scale economy. The regions of concentration related to the forest‑based sector (clusters), and having Eucalyptus as the primary raw material, are indicated on Figure 3.03.

Figure 3.03 Current location of the main industrial regions in Brazil – Eucalyptus

Pulp

vegetal Charcoal

Solid Wood

Biomass

Multiproducts

Industrialized Wood-Panel

Source: Created by Pöyry Silviconsult (2011).


Forest Products Market3CHAPTER3.1.1 Production and consumption

Pulp

In Brazil there are around 220 companies operating in the paper and pulp segment. At the international level, the country leads the production of short fiber pulp (Eucalyptus), being the 6th largest producer of pulp and the 11th largest paper manufacturer. For 10 years, the pulp industry has been growing at an average rate of 5.9% per year. In 2010, the pulp national production added up to 14.1 million tons, representing a growth of 4.4% in relation to 2009. In the same period, internal consumption reached 6.1 million tons, 8.9% more than what was registered in 2009 (Graphic 3.01).

Graphic 3.01 History of pulp production and consumption in Brazil, 2000-2010

16

14

12

10

8

6

4

2

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Mill

ion

(t)

ConsumptionProduction

14.1

11.2

12.7

9.6

7.4

13.5

10.4

8.0

12.0

9.1

7.5

5.0 4.95.3

6.0 6.15.6

5.25.8

4.55.14.9

Source: ABIPA, ABIMCI, BRACELPA (2010/2011).

Paper

The national paper production in Brazil in 2010, approximately 9.8 million tons, resumed the growth observed in the pre‑crisis period by registering an increase of 5.4% in relation to 2009. Consumption surpassed 2009 figures by 9.5% adding up to 9.2 million tons, reflecting an improvement in the internal market and the resumption of imports by the Asian market. (Graphic 3.02).


Graphic 3.02 History of paper production and consumption in Brazil, 2000- 2010

12

10

8

6

4

2

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Mill

ion

(t)

9.88.7 9.48.57.4 9.38.67.8 9.07.97.2

6.9 6.7

7.7

8.89.2

8.4

7.3

8.1

6.77.16.8



Charcoal

Brazil is the world’s largest producer of charcoal. The main consumer sectors are the pig iron, steel and iron‑alloy and to a lesser extent, trade and domestic customers. Charcoal has many advantages compared to coal. It’s renewable, less polluting (low ash content), virtually free of sulfur / phosphorus and the technology for its manufacture has been largely consolidated in Brazil.

For the forestry economy, the more relevant range of companies in the issue of charcoal consumption refers to independent producers of pig iron, which are suppliers of raw material for the steel industry. In 2010, we produced 11.6 million cubic meters of charcoal from planted forests, of which 66.2% were consumed by independent “pig iron makers”.

Currently, approximately 55.0% of Brazilian production of charcoal is still from native forests. The trend is for the consumption of native wood to steadily decrease throughout the years, being replaced with wood from planted forests, and due to the greater control exercised by the inspection bodies and the increase of social pressures on natural resource preservation.


Forest Products Market3CHAPTERIndustrial Reconstituted Panel

Over the past 10 years (2000‑2010), annual production of reconstituted panels has grown from 2.7 million tons to 6.4 million, i.e. an average growth of 8.2% per year by consolidating its participation in certain consumer segments, mainly furniture. Likewise, the consumption of reconstituted panels also increased from 2.6 million tons in 2000 to 6.5 million in 2010, an increase of 8.7% pa (Graphic 3.03).

Graphic 3.03 History of production and consumption of reconstituted panels in Brazil, 2000-2010

7

6

5

4

3

2

1

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Mill

ion

(t)

6.44.4 5.24.03.0 5.34.03.1 5.03.52.7

2.83.3

4.4

5.3

6.5

5.3

3.8

4.9

2.9

4.0

2.6



Plywood

The Brazilian market for plywood is composed of approximately 300 firms, mostly concentrated in the south of the country. This market is characterized by high operating costs and the high dependence on external markets. In 2010, plywood production exceeded 25.0% in production recorded in 2009, amounting to 2 million tons produced (Graphic 3.04).


Graphic 3.04 History of production and consumption of plywood in Brazil, 2000-2010

3

2

1

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Mill

ion

(t)

2.0

2.4

1.9

2.4

1.51.6

2.5

1.6

2.02.0

1.4

0.5 0.40.6 0.6

1.1

0.60.4

0.70.6

0.4

0.7



Sawn wood

It is estimated that there are approximately 600 sawmills for the sawing of wood plantations, which together produced in 2010, 9.0 million tons of lumber. Considering the period between 2000 and 2010, Brazilian production of sawmilling grew at an average annual rate of 1.7% (Graphic 3.05).

Despite the strong production growth of Eucalyptus, the sawmilling volume of this genus is still small. However, in the medium term, this trend is estimated to be reversed.

During that same period, consumption of lumber has decreased 21.8% compared to the total consumption in 2009 (Graphic 3.05), reaching a total of 6.1 million tons of sawn wood.


Forest Products Market3CHAPTERGraphic 3.05 History of sawn wood production and consumption in Brazil, 2000-2010

10

9

8

7

6

5

4

3

2

1

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Mill

ion

(t)

9.09.18.89.0

8.0

8.58.9

8.3

9.3

8.7

7.5

6.9 7.0

7.8 7.8

6.1

7.87.4

8.0

6.6

7.4

6.2



Other Products

On a smaller scale, the production of other forest products such as briquettes, pellets, hustings, pallets, poles and stakes still remains. However, the lack of statistics relating to the market of these products prevents the actual measurement and analysis of their market potential.

3.1.2 International trade

The total balance of Brazilian exports reached the figure of $ 201.9 billion in 2010, representing a growth of 32.0% over 2009 (U.S. $ 153.0 billion). However, total imports grew more than proportionately (42.2%) totaling $ 181.6 billion. In this context, the Brazilian trade balance, although positive, has declined to $ 20.3 billion in 2010, a decrease of 19.8%.

In this scenario, the forest sector stood out as surplus. Brazilian exports of products of planted forests amounted to $ 7.5 billion (3.7% of Brazil), an increase of 34.6% over 2009. Imports totaled U.S. $ 2.0 billion, an increase of 41.8% compared to 2009 (Graphic 3.6). The forest trade balance totaled $ 5.5 billion, representing 27.1% of the overall balance of the country.


Graphic 3.06 Trade balance evolution of planted forest products in Brazil, 2000-2010¹

5.6

4.0

5.0

3.4

2.0

4.23.7

2.2

4.4

3.12.1

10

9

8

7

6

5

4

3

2

1

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Billi

on (U

S$)

ExportsBalance Imports

Source: SECEX (2010).¹ See Methodological Notes – Chapter 5 of this Yearbook.

Table 3.1 presents the evolution of the monetary value of exports of major products of Brazilian forests, planted in the period between 2004 and 2010.

Table 3.01 Brazilian export evolution of planted forest products (US$ million)

Product 2004 2005 2006 2007 2008 2009 2010

Pulp 1,722 2,034 2,484 3,024 3,917 3,315 4,762

Paper 1,188 1,372 1,524 1,702 1,920 1,686 2,009

Sawn wood ¹ 295 304 275 257 203 142 154

Reconstituted Panels ² 154 167 162 166 127 85 82

Plywood ¹ 521 510 438 422 477 279 360

Charcoal 6 4 3 3 2 2 1

Others ³ 335 201 262 178 137 116 169

Total 4,221 4,592 5,148 5,752 6,783 5,625 7,537

Source: SECEX (2010).1 Includes only conifers.2 Reconstituted Panels, according to SECEX, include: MDP, MDF, Chapa Dura, OSB and others (waferboard).3 “Others” include: frames, blocks & bloncks and EGP.


Forest Products Market3CHAPTER Pulp exports totaled approximately $ 4.7 billion in 2010, an increase of 43.6% over 2009. The European countries have increased imports of Brazilian pulp at 67.5% between 2009 and 2010, totaling $ 1.99 million. China imported 1.02 million, reaching the second position among the largest importers.

Brazil has stood out for producing and supplying the international market with large volumes of paper, mainly from Latin America and Europe. The countries of North America decreased by 10.9% the volume of imported Brazilian paper, while Argentina remained the main destination of Brazilian paper, acquiring 43% of all domestic production.

Exports of manufactured wood panels accounted for 1.1% of total exports, indicating the strong direction of the product to the market. Brazilian exports of MDF were aimed mainly to the United States, Belgium and France, representing 65.3% of total exports of this product. Paraguay, Uruguay and Colombia together imported 6.7% of the total exported MDF.

The export volume of sawn wood had an increase of 8.4% in the period, which amounted to $ 154 million, and the main destinations of sawn wood exports were the USA, Netherlands and France. Plywood exports totaled $ 360 million, up 29.0% of the total registered in 2009. The main destinations of Brazilian plywood were the United Kingdom, Germany and Belgium.

3.2 ROUND WOOD

3.2.1 Round Wood Production

It is estimated that potential wood production of Pinus and Eucalyptus is around 258.6 million cubic meters per year, considering the current area of forest plantations and the mean annual increment (MAI) for each region. The estimated total, 74.9% corresponds to Eucalyptus and 25.1% to Pinus (Table 3.02 and Graphic 3.7).

Table 3.02 Estimate of potential wood production of Eucalyptus and Pinus in Brazil, 2010

Species Planted Area (ha) IMA¹ Production Sustained² %

Eucalyptus 4,693,766 41.3 193,736,543 74.9

Pinus 1,756,359 37.0 64,913,131 25.1

Total 6,450,125 - 258,649,674 100.0

Source: ABRAF’s individual and collective member‑companies (2011) and various sources compiled by Pöyry Silviconsult (2011).¹ MAI = Mean Annual Increment (m³/ha year). The weighted MAI was adopted (in view of planted areas) in plantation areas of Eucalyptus and Pinus of ABRAF’s member companies.² The sustained production (m³/year) was calculated by multiplying the planted area by the weighted MAI of the species.


Graphic 3.07 Breakdown of sustained production of forest plantations by genus, 2010

Eucalyptus 74.9%

Pinus 25.1%

Source: ABRAF’s individual and collective member‑companies (2011) and various sources compiled by Pöyry Silviconsult (2011).

However, this estimate is not the wood supply actually available for the period considered, but an estimated potential supply, since the age of the plantations is variable.

Timber production is concentrated in southeastern and southern Brazil. In the Southeast, there is a predominance of Eucalyptus (93.8%) compared to Pinus (6.2%). In the South, Pinus is predominant in 71.9% of the planted area, while the Eucalyptus represents only 28.1% (Graphic 3.8).

Graphic 3.08 Sustained production estimate of Eucalyptus and Pinus plantations by region, 2010

140

120

100

80

60

40

20

0

West-Central Northeast Southeast South

Eucalyptus Pinus

Mill

ion

(ha)

7.2

108.8

20.7

53.0

33.90.6

19.3


Much of the concentration of Eucalyptus plantations in the Southeast (60.3%) comes from the significant number of pulp & paper pulp and charcoal metallurgy companies located in this region. Likewise, most of Pinus continues to be grown close to the industries of panels, sawn wood, plywood and solid wood products, located in the southern region (87.1%) of the country (Graphic 3.9).


Forest Products Market3CHAPTERGraphic 3.09 Breakdown of potential wood production by region in Brazil, 2010

Southeast 60.3%

Northeast 18.8%

South 11.5%

West-Central 9.4%

South 87.1%

Southeast 11.9%

West-Central 1.0%

EUCALYPTUS PINUS


According to IBGE (2010), the annual production of logs from forest plantations totaled 158.4 million cubic meters. Of this total, 68.7% (108.8 million cubic meters) were directed to industrial use, 27.0% (42.8 million cubic meters) to the production of firewood and 4.3% (6.8 million) to charcoal.

The Graphic 3.10 presents the historical evolution of the production of round wood in Brazil (2001‑2010). During this period, the average annual production was 139 million m³ and the average annual growth of 3.9%.

Graphic 3.10 History of annual round wood production for industrial use in Brazil, 2001-2010¹

180

160

140

120

100

80

60

40

20

0

160

140

120

100

80

60

40

20

0

2001 2002 2003 2004 2005 2006 2007 2008 2009 20102 2001 2002 2003 2004 2005 2006 2007 2008 2009 20102

ABSOLUTE RELATIVE (BASE 100)

Mill

ion

(m3 )

104 89

126 108

151 130

125 107141 121

151 129138 118142 122

155 133158 136

Source: IBGE (2011), adapted by Pöyry Silviconsult (2011).¹ Includes charcoal (equivalent in round wood), firewood for energy, pulp, sawmill and veneering exclusively from silviculture.² Estimated by Pöyry Silviconsult based on data provided by IBGE (2011).


3.2.2 Round wood Production of ABRAF’s Associates

The round wood production of Pinus and Eucalyptus of ABRAF’s individual associated companies amounted to 71.1 million cubic meters in 2010. Of the total, 82.5% corresponded to the production of Eucalyptus and Pinus 17.5% (Table 3.03).

Table 3.03 Round wood production by ABRAF’s individual associated companies, 2010

GeneraProduction

m³/year %

Eucalyptus 58,629,008 82.5%

Pinus 12,468,100 17.5%

Total 71,097,108 100.0%

Source: ABRAF’s individual associated companies (2011).

With regard to 2009, the round wood production of Eucalyptus increased approximately 30.0% in 2010. In the case of Pinus, the increase of wood production was approximately 9.6% (Graphic 3.11).

Graphic 3.11 Evolution of round wood production by ABRAF’s individual associates, 2005-2010

80

70

60

50

40

30

20

10

0

2005 2006 2007 2008 2009 2010

IN ABSOLUTE VALUES IN FIGURES INDEXES (BASIS 2005)

Eucalyptus Pinus

Mill

ion

(m3 )

13.6

35.3

13.4

32.7

11.1

45.2

9.8

46.4

11.4

45.1

12.5

58.6

200

150

100

50

0

2005 2006 2007 2008 2009 2010

166

92

145131

72

11599

9394

128

84

116

128

82

115100

PinusEucalyptus total

Source: ABRAF Yearbook (2010) and ABRAF’s individual member‑companies (2011).


Forest Products Market3CHAPTER3.2.3 Round Wood Consumption

In 2010, the Brazilian consumption of round wood from planted forests was 169.1 million cubic meters (3.04 and Graphic Table 3.12). The pulp and paper segment stood out as the main consumer (37.5% of total).

Table 3.04 Brazilian consumption of round wood for industrial use by segment and species, 2010¹

SegmentRound Wood Consumption (m³)

Eucalyptus Pinus Total

1. Pulp & Paper 54,783,840 8,593,860 63,377,700

2. Reconstituted Panels 4,424,069 8,758,677 13,182,746

3. Wood Industry² 3,515,084 29,133,632 32,648,716

4. Charcoal 15,401,191 ‑ 15,401,191

5. Industrial Firewood 33,156,894 9,399,442 42,556,336

6. Others³ 1,674,144 284,695 1,958,839

Total 112,955,222 56,170,306 169,125,528

Source: ABIPA (2011), AMS (2011), BRACELPA (2011) and other sources compiled by Pöyry Silviconsult (2011).¹ Values were estimated by Pöyry Silviconsult based on round wood equivalent product conversion factors (see Methodological Notes – Chapter 05, item 5.3).² Including sawn wood, plywood and processing of High Value Added Products (floor, door, window, framework, tools and Edge Glued Panel – EGP).³ Including wood chips for exports and treated wood.

Graphic 3.12 Round wood consumption share by segment, 2010

Pulp and Paper 37.5%

Fuelwood 25.2%

Wood Industry 19.3%

Charcoal 9.1%

Wood Panel 7.8%

others 1.2%

Source: ABIPA (2011), AMS (2011), BRACELPA (2011) and other sources compiled by Pöyry Silviconsult (2011).


Compared to 2009, consumption of timber of Eucalyptus increased by 1.1% (1.2 million cubic meters). In the same period, Pinus log consumption decreased by 3.9% (2 million tons), as presented in Graphic 3.13.

Graphic 3.13 History of round wood consumption by genus, 2010

180

160

140

120

100

80

60

40

20

0

2008 2009 2010

Eucalyptus Pinus

Mill

ion

(m3 )

49.4

112.4

51.4

111.2

53.9

110.8

Source: ABIPA (2011), AMS (2011), BRACELPA (2011) and other sources compiled by Pöyry Silviconsult (2011).

3.2.4 Round Wood Consumption of ABRAF’s Individual Associates

Eucalyptus and Pinus round wood consumption of ABRAF’s individual associates totaled 63.9 million m³ in 2010. Of this total, 85.4% corresponded to Eucalyptus consumption and 14.6% to Pinus (Table 3.05).

Table 3.05 Round wood consumption of ABRAF’s individual associates, 2010

GeneraConsumption

m³/year %

Eucalyptus 54,541,601 85.4%

Pinus 9,340,280 14.6%

Total 63,881,881 100.0%

Source: ABRAF’s individual associates (2011).


Forest Products Market3CHAPTER Considering only ABRAF’s member‑companies, Eucalyptus round wood consumption increased by 21.4% against the volume consumed in 2009. The consumption of Pinus, 47.6% higher than the recorded in the previous year is numerically due to the participation of new ABRAF’s member‑companies (Graphic 3.14).

Graphic 3.14 History of round wood consumption of ABRAF’s individual member-companies, 2005-2010

70

60

50

40

30

20

10

0

2005 2006 2007 2008 2009 2010

Eucalyptus Pinus

Mill

ion

(m3 )

7.0

47.3

6.3

48.7

6.3

44.9

9.3

54.5

6.8

42.3

6.6

42.0

Source: ABRAF Yearbook (2010) and ABRAF’s individual member‑companies (2011).

Graphic 3.15 illustrates the source of raw material consumed by ABRAF’s individual member‑companies. Of the total consumed, 80.0% come from plantations and 10.6% from forest fostering areas. In 2010, the increasing share of timber from the market (third party) is remarkable, jumping from 4.3% to 9.4% in 2009.

Graphic 3.15 Breakdown of round wood consumption of ABRAF’s member-companies by origin, 2010

own land 80.0%

outgrower Scheme 10.6%

Third-party 9.4%

Source: ABRAF’s individual member‑companies (2011).

Onde você vêuma fl oresta, a

V & M FLORESTALenxerga vida.

Criada em 1969, a V & M FLORESTAL é uma das pioneiras no plantio e manejo de fl orestas renováveis de eucalipto no país, responsável por produzir carvão vegetal para produção dos tubos de aço sem costura da V & M do BRASIL. Sua atuação sustentável colabora para a preservação do meio ambiente, através da implementação de faixas ecológicas e das áreas de reserva que

contribuem para manter a diversidade e o equilíbrio do ecossistema. Entra ano, sai ano, a V & M FLORESTAL continua investindo em sustentabilidade.

V & M do BRASIL, aprimorando a qualidade e valorizando a vida.

Grupo Vallourec www.vmtubes.com.br

IMPortAncE oF PLAntEd ForEStS In BrAZIL

FoRESt PRodUCtIoN GRoSS vAlUE

tAX CollECtIoN

EMPloYMENt GENERAtIoN

FUNdING MEChANISMS AvAIlABlE to thE FoRESt PlANtAtIoN INdUStRY IN BRAZIl

FIRJAN INdEX oF MUNICIPAl dEvEloPMENt

ENvIRoNMENt

SoCIAl ANd ENvIRoNMENtAl RESPoNSIBIlItY PRoGRAMS

4CHAPTER

96 CHAPTER 4 :: iMPoRTAnCE oF PlAnTEd FoREsTs in BRAzil

Importance of Planted Forests in Brazil4CHAPTER4 IMPoRtANCE oF PlANtEd FoREStS IN BRAZIl

For the Brazilian economy and society in general, the forest sector contributes with a significant portion of the generation of products, taxes, currencies, job posts and income. Moreover, the sector is strategic in providing raw materials for the development of the national forest‑based industry.

In the social sphere, the activities of the sector’s production chain promote job and income generation, and by setting the populations in the countryside they also help to improve the quality of life in rural areas.

From an environmental standpoint, there is the contribution of the planted forests sector towards nature conservation and environmental balance, in the promotion of biodiversity, protection and recovery of degraded areas, the maintenance of water systems and soil fertility, as well as the quality of air and water. The role of forest plantations as carbon sinks is also emphasized.

In this context, this chapter describes the economic, social and environmental contributions of planted forests in 2010, upon the presentation of indicators such as Forest Production Gross Value (VBPF), tax collection and job creation in the country. Moreover, it presents information on available funding mechanisms for the sector and indicators for the social and environmental responsibility programs of those companies associated to ABRAF.

The methodologies used and/or developed for the computation and estimation of variables and indicators presented in this chapter are described in Chapter 5 (Methodology Notes) of this Yearbook.

4.1 FOREST PRODUCTION GROSS VALUE

The Forest Production Gross Value (VBPF), derived by multiplying the price of forest products by the quantity produced, is a leading economic performance indicator of the planted forests sector. In 2010, the estimated VBPF for the planted forests sector amounted to R$ 51.8 billion, a figure 20.7% higher when compared to the one observed in 2009 (Table 4.01).

Table 4.01 Estimated gross value of production in the forestry sector, according to the planted forests sector’s main production chains, 2009 and 2010

Segment2009 2010

R$ % R$ %

Pulp and Paper 23,624,000,000 55.0 29,060,318,880 56.1

Industrialized Wood Panels3, 5 4,489,000,000 10.4 5,404,456,786 10.4

Charcoal Metallurgy³ 612,000,000 1.4 1,262,202,865 2.4

Wood Industry2 , 4 6,677,379,025 15.5 7,597,427,494 14.7

Furniture³ 7,566,000,000 17.6 8,518,969,466 16.4

Total 42,968,379,025 100.0 51,843,375,491 100.0

Source: ABIPA, BRACELPA IBPT (2010) and other sources compiled by Pöyry Silviconsult (2011).¹ See methodology notes in Chapter 5 of this Yearbook.2 Estimation Pöyry Silviconsult.3 Includes only products derived from planted forests4 Wood Industry includes lumber, plywood (laminated) and Higher Added Value Products (PMVA)5 Reconstituted Panels include: Medium Density Particleboard (MDP), Medium Density Fiberboard (MDF), fiber(hard)board and Oriented Strand Board (OSB).

97iMPoRTAnCE oF PlAnTEd FoREsTs in BRAzil :: CHAPTER 4

The values for the pulp & paper and industrial wood panels production, whose estimates were provided by industry associations in each segment achieved, in 2010, R$ 29.1 billion and R$ 5.4 billion, respectively. The pulp and paper sector stood out as the sector that most contributed to the national VBPF, 56.1%.

The VBPF for the charcoal metallurgy reached R$ 1.2 billion, an increase of more than 100% when compared to the value of R$ 612 million in 2009. The growth of the VBPF for charcoal metallurgy in 2010 was due mainly to the partial recovery of prices and volumes consumed. The prices of the thermo‑reducer input increased 26% and the approximate consumption increased 36%, compared to 2009, when the effects of the economic crisis that began in late 2008 were more severe. Still, the VBPF remains below pre‑crisis level, when the sector reached a VBPF of R$ 1.57 billion.

For the solid wood industry, a VBPF of $ 7.6 billion was estimated, compared to the R$ 6.7 billion of 2009.

The VBPF for the furniture industry, in turn, went from $ 7.6 billion in 2009 to $ 8.5 billion in 2010, a 12.6% growth.

4.2 TAX COLLECTION

According to the Brazilian Institute of Tax Planning (IBPT), the Brazilian tax collection in 2010 was 17.8% higher than in 2009, totaling $ 1.29 trillion (Table 4.02).

It is noteworthy that as in 2009, the year 2010, even if partially, was influenced by government incentives for the recovery of domestic demand through tax cuts in strategic productive sectors, such as the construction and automotive industries, furniture and home appliances (white line), among others.

For the year 2010, there was a methodology change regarding the estimation of taxes collected by the segments related to planted forests in Brazil. Such a change (see Chapter 5 – Methodology Notes) explains the reduction in this indicator, when compared to the value stated in the previous version of this yearbook, for 2009.

Table 4.02 Estimated share of taxes collected by the segments associated with planted forests in Brazil, 2009 and 2010

Segment2009¹ 2010

R$ (million) % R$ (million) %

Forest Industry (Planted Forests) 7,307 0.67 7,410 0.57

Brazil (federal, state and municipal) 1,096,002 100.0 1,291,015 100.0

Source: IBPT (2010) and other sources compiled by Pöyry Silviconsult (2011).2 The value of taxes year 2009 for the forestry industry (plantation forests) has been changed due to changes in methodology in the current version of this yearbook.


Importance of Planted Forests in Brazil4CHAPTER It is estimated that the tax contribution of the forestry sector was R$ 7.4 billion in the year, representing 0.57% of total revenues in the country.

This indicator consolidates the total collected by the taxable forest‑based economic activities, including the major taxes generated by national companies – Income Tax (IRPJ), Taxes on Goods and Services (ICMS), Social Integration Program (PIS), Contribution to the Social Security Financing (COFINS), Training Program of the Civil Servants Asset (PASEP), Service Tax (ISS), Tax on Industrialized Products (IPI), Financial Transactions Tax (IOF) and the Tax on Rural Property (ITR), applied to the farmers’ legal persons (including forest‑based activities).

It is noteworthy that the adjustment in the calculation methodology for the timber industry’s VBPF (see Methodology Notes in Chapter 5), as well as the temporary tax relief of the Tax on Industrialized Products (IPI) for the furniture sector resulted in the reduction, in relation to 2009, of the estimate of the planted forests sector’s contribution to tax collection in Brazil.

4.3 EMPLOYMENT GENERATION

In 2010, it is estimated that the forest sector has kept 4.7 million job posts, including direct jobs (640,400), indirect jobs (1.45 million) and jobs resulting from the Income Effect (2.60 million), as shown in Table 4.03.

Table 4.03 Estimated number of direct and indirect job posts and Income Effect in the planted forests sector, 2010

Industrial SegmentPlanted Forests Sector

Direct Indirect Income Effect Total

Forestry 176,404 719,188 461,366 1,356,958

Charcoal Metallurgy 47,804 263,973 937,901 1,279,678

Wood Products ¹ 187,040 122,770 257,179 566,989

Furniture 116,361 87,271 159,996 363,627

Pulp and Paper 112,817 259,479 755,874 1,128,170

Total 640,426 1,452,680 2,602,316 4,695,422

Source: CAGED, ABRAF, Pöyry Silviconsult (2011).1 See methodology note highlighted in section 5.8 of this Yearbook.


Chart 4.01 shows the evolution of the number of job posts held by the Brazilian forest sector between 2000 and 2010. In 2010, according to data from CAGED/MTE, 397,000 people were admitted, setting a figure similar to the one observed in 2008 and 23.6% higher than in 2009 (321,000).

Graphic 4.01 Number of job posts created (employees hired, fired and balance) in the forestry sector in Brazil, 2000-2010

450

400

350

300

250

200

150

100

50

0

‑50

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

285

8

278

285

9

276

10

298

308

397

4

393

397

47

350

339

‑18

321

332

10

322

366

12

354267

‑5

262

333

27

306

‑3

294

297

Thou

sand

laid offhired Balance

Source: CAGED/MTE (2011).

The individual companies associated to ABRAF kept 98,300 job posts, of which 33.4% are connected to the industry and 66.6% to forestry activities. The indicator has increased 11.4% over 2009, highlighting the increase in job posts related to forestry, 22.5% (Table 4.04).

Table 4.04 Number of job posts of the companies associated to ABRAF, 2010

Item2009 2010

Industry Forestry Total Industry Forestry Total

Own 24,076 18,197 42,273 19,487 22,543 42,030

Third Parties 10,809 35,233 46,042 13,380 42,938 56,318

Total 34,885 53,430 88,315 32,867 65,481 98,348

Source: Individual Associates of ABRAF (2011).


Importance of Planted Forests in Brazil4CHAPTER4.4 FUNDING MECHANISMS AVAILABLE TO THE FOREST PLANTATION

INDUSTRY IN BRAzIL

The development of forestry depends on the availability of resources for investment and its financial cost.

The mechanisms of public and private funding, including lines of credit for the sector, promote the expansion and development of the planted forest sector. The amount of initial capital needed to purchase land, materials, plants and equipment is provided by such mechanisms.

Among the types of mechanisms, the private sector often stands out in funding volume. But the public initiative also is also present, especially with regard to large investments, such as those for the pulp and paper industry.

The funding provided by the public initiative is made available by public banks through funds transferred from the Union’s budget, the Ministry of Agriculture, Livestock and Supply (MAPA) and the Ministry of Agrarian Development (MDA). The main financial agent is still BNDES.

4.4.1 Credit lines

The funding lines provided by BNDES and directed to forestry are: BNDES FINEM (Financing Undertakings), BNDES Florestal (Reforesting Support, Recovery and Sustainable Use of Forests), PROFLORA (Program for Commercial Planting and Forest Restoration), PRONAF (National Program for Strengthening Forestry Family Agriculture) and the BNDES COMPENSAÇÃO FLORESTAL (Forest Compensation Support Program). The other existing funding lines are related to Financing Constitutional Funds of the North (FNO – Banco da Amazônia), of the Northeast (FNE – Banco do Nordeste) and of the Midwest (FCO – Banco do Brasil).

In addition, BNDES provides funding mechanisms for environmental initiatives in the form of an investment fund for stakes in companies or ventures with a focus on forest assets. This fund, called FIP Florestal, is divided into FIP Brasil Sustentabilidade, FIP Caixa Ambiental and FIB Vale Florestal.

Chart 1.4 summarizes the main funding lines of provided by BNDES.


Chart 4.01 Summary of the main forestry funding programs offered by BNDES, 2010

Program Description

BNDES Florestal FINEM PROPFLORA PRONAF Florestal PRONAF ECO

Overall objective / purposes

• Support activities for reforestation, conservation and forest restoration of degraded or converted areas, and sustainable forest management in natural areas.

• Support investment projects for the deployment, expansion and modernization of companies.

• Support the implementation and maintenance of forests for industrial use, the burning process for drying agricultural products, biofuel production and agro‑forestry consortiums;

• Support the restoration and maintenance of permanent preservation areas and legal reserves.

• Encourage the practice of forestry and the development of agro‑forestry systems;

• Support forest management practices;

• Provide technical support.

• Encourage the use of renewable and environmental energy technology;

• Support water storage;• Sponsor small

hydroenergy undertakings;

• Encourage forestry and conservation practices, and soil acidity correction.

Operational modalities

• Directly with BNDES;• Indirectly through an

accredited financial institution.

• Directly with BNDES;• Indirectly through an

accredited financial institution;

• Mixed – an operation that combines the two previous forms.

Eligible Items • Reforestation ventures, tree farming and sustainable forestry;

• Acquisition of national machinery and implements accredited with BNDES;

• Technical assistance and audit, certification, monitoring and training;

• Seeds, seedlings and nurseries – collection, acquisition, storage and production;

• Running and maintaining forest culture.

• Civil works, assembly and installations;

• New and used machinery and equipment (only the micro companies), included the industrial sets and systems produced, accredited by BNDES;

• Import of new machinery and equipment with no national similar;

• Expenditures on research and engineering projects related to the investment;

• Working capital associated to the fixed investment.

• Fixed and semi‑fixed investments;

• Funding related to the project, limited to 35% of the investment value;

• Forest nurseries;• Restoration of

preservation areas and legal reserves (agricultural activities).

• Investment in forestry and agro‑forestry systems;

• Ecologically sustainable exploitation, including costs with the venture’s deployment and maintenance.

..

Beneficiaries • Companies with headquarters and administration in the country, domestic or foreign control;

• Individual entrepreneurs. Associations and foundations;

• Legal entities of public law.

• Companies with headquarters and administration in the country, domestic or foreign control, enrolled in the CNPJ and in the Public Register of Commercial Companies;

• Legal entities of public law;

• Individuals residing and domiciled in the country characterized as Farmers, for investment in the agribusiness sector.

• Farmers (individuals or corporations) and their associations and cooperatives.

• Farmers who fall in groups A, A/C, B, C and D¹ of PRONAF.

• Individuals classified as family farmers by PRONAF, provided they submit a proposal or technical project.


Importance of Planted Forests in Brazil4CHAPTER

Chart 4.01 Summary of the main forestry funding programs offered by BNDES, 2010Continued

Program Description

BNDES Florestal FINEM PROPFLORA PRONAF Florestal PRONAF ECO

Values for Funding

• Minimum of R$ 1 million. • Minimum of R$ 10 million;

• In case of transactions whose customers are sets of companies or cooperatives that operate in Local Clusters, there is no minimum amount for funding.

• Limit up to R$ 300,000. • Up to 100% of the venture.

• Up to 50, 000;• A family production unit

can hire a maximum of two consecutive loans.

Interest Rate • Long Term Interest Rate – TJLP;

• BNDES remuneration of 0.9% p.a.;

• Credit risk rate of up to 3.57% p.a.;

• Financial intermediation rate of 0.5% p.a.;

• The composition of the interest rate is given according to the operation mode.

• Financial Cost²;• BNDES remuneration of

up to 4.5% p.a.;• Credit risk rate of up to

3.57% p.a.;• Financial intermediation

rate of 0.5% p.a.;• The composition of the

interest rate is determined according to the operation mode.

• 6.75% p.a. including the compensation for the accredited financial institution of 3% p.a.

• 3% p.a. • 1 to 4% p.a., according to the number of operations and the rated value of the loans.

Payment period

• Up to 180 months, depending on the item funded.

• Established according to the payment capacity of the venture, company or economic group.

• Up to 12 years, according to the item financed.

• Up to 12 years;• Up to 16 years for

resources from the Constitutional Funds.

• From 2 to 12 years in accordance with the purpose of the project presented.

Funding agency

• BNDES or accredited financial institution.

• BNDES or accredited financial institution.

• Banco do Brasil or accredited financial institution.

• Banco do Brasil;• Banco da Amazônia;• Banco do Nordeste do

Brasil;• Other Banks of the

National Rural Credit System.

• Banco do Brasil.

Source: Banco Nacional do Desenvolvimento – BNDES, Banco do Brasil – BB, Ministry of the Environment.¹ Group A: agrarian reform settlers or of the National Land Credit Program; Group A/C: agrarian reform settlers of the National Land Credit Program; Group B, C, D: family farmers, landowners, squatters, tenants, partners, former slaves, Indians and authorities of the agricultural reform, which fall within the rules of access to PRONAF.² Financial cost, obtained by adding the TJLP, the Interest Rate Provisional Measure 462 – TJ‑462 (TJLP + 1.0% p.a.), the variation of the U.S. dollar or variation of the UMBNDES plus the costs of the Currency Basket – Basket and the Broad Consumer Prices National Rate plus charges – IPCA.

Additionally, the Ministry of National Integration, in promoting economic and social development and the reduction of regional inequalities, performs the transfer of a portion of tax collection, established by the Constitution, the so‑called constitutional funds, for use in funding programs to mostly needing productive sectors, especially those of the North, Northeast and Midwest regions, aiming at the development of these regions.

Constitutional and Federal funds are formed by the Constitutional Financing Fund of the North (FNO), of the Northeast (FNE) and of the Midwest (FCO), and the financing institutions of these funds are, respectively, Banco da Amazônia S.A., Banco do Nordeste do Brasil and Banco do Brasil S.A.


Chart 4.2 presents the funds specifically aimed at forestry activities, such as FNE Verde, FNO Floresta and FCO Pronatureza.

Chart 4.02 Summary of the major constitutional funds aimed at forestry funding, 2010

Item FNE VERDE FNO BIODIVERSIDADE FCO PRONATUREzA

Overall objective / purposes

• Promote the development of ventures and economic activities that encourage environmental preservation and conservation.

• Help to maintain and restore biodiversity in the Amazon, through the provision of funding to projects that favor the rational use of natural resources, and adopting good management practices, as well as ventures designed for the settlement and recovery of degraded/altered areas of legal reserve in rural estates.

• Encourage projects that address the recovery, conservation and preservation of natural resources. Support the deployment of forestry projects that focus on the generation of job posts and income.

Eligible Items • Forest Management;• Reforestation;• Proposals for alternative energy generation;• Environmental improvements in production

processes.

• Reforestation;• Agro‑forestry Systems;• Activities whose production systems are on

sustainable bases, in accordance with current legislation.

• Deployment of agro‑forestry systems;• Forestation and reforestation, for energy and

timber purposes;• Deployment of regional nurseries to supply

seedlings;• Deployment of permanent crops of native

plant species of the savannah;• Production of organic inputs;• Deployment of low impact sustainable forest

management in forests.

Beneficiaries • Farmers;• Rural, industrial and commercial companies;• Service providers.

• Individuals who characterize themselves as farmers;

• Traditional Peoples of the Amazon not covered by PRONAF.

• Farmers;• Production cooperatives and associations

dedicated to productive activities in the rural sector.

Financing Limit Rural Investment and Funding:• Mini Farmer up to R$ 150,000;• Small Farmer: R$ 150,000 to R$ 300,000;• Midsize Farmer R$ 300,000 to R$ 1,900,000;• Large Farmer: Over $ 1.900.00.

Business investment and Costs:• $ 150,000 to $ 300,000;• Small: Over $ 1,900.00;• Average: Over $ 1,900.00;• GR over $ 35,000,000.00.

• Mini farmer up to $ 33,000;• Small: R$ 144,000;• Midsize: R$ 643,000;• Large: R$ 1,688,000.

• R$ 20 million per customer, business group or agribusiness group.

Interest Rate For agricultural operations:• 5% p.a. for mini farmers;• 6.75% p.a. for small farmers;• 7.25% p.a. for midsize farmers;• 8.5% p.a. for large farmers.

For the other sectors:• 6.75% p.a. for micro‑companies;• 8.25% p.a. for small businesses;• 9.5% for midsize companies;• 10% p.a. for large companies.

In the area of alternative land use:• 5% p.a. for mini farmers;• 6.75% p.a. for small farmers;• 7.25% p.a. for midsize farmers;• 8.5% p.a. for large farmers.

In legal reserve area:• 4% for mini, small, midsize, large.

• 5% p.a. for mini farmers;• 6.75% p.a. for small farmers;• 7.25% p.a. for midsize farmers;• 8.5% p.a. for large farmers;• Funding for forestry in the settlement

and recovery of Areas of Legal Reserve and Permanent Preservation, the effective interest rate is 4% p.a.


Importance of Planted Forests in Brazil4CHAPTERChart 4.02 Summary of the major constitutional funds aimed at forestry funding, 2010

Continued

Item FNe VerDe FNo BIoDIVerSIDADe FCo proNAtUreZA

Payment period • Fixed and Mixed Investments, up to 12 years, including 4 years grace period;

• Semi‑fixed Investments, up to 8 years, including 3 years grace period.

• Fixed or mixed investment: up to 12 years; for crops with long maturity cycles it can be extended to 20 years;

• Semi‑fixed: up to 10 years. Funding and/or trading, up to two years.

Fixed investments:• Forestation and reforestation;• Trees for sawmills and veneer, up to 20 years;• Trees for energy purposes, up to 15 years.

Semi‑fixed investments:• Machinery and equipment, up to 10 years.

Funding agency • Banco do Nordeste do Brasil (BNB) • Banco da Amazônia (BASA) • Banco do Brasil (BB)

Source: Instituto Brasileiro do Meio Ambiente – IBAMA, Banco do Nordeste do Brasil – BNB, Banco da Amazônia – BASA, Banco do Brasil – BB

4.4.2 disbursements by Funding Programs

Disbursements by the Program of Forest Commercial Plantation (PROPFLORA) are shown in Table 4.05.

Table 4.05 Evolution of disbursements by the PROPFLORA program, 2005-2010

StatePROFLORA (R$ 1,000)

2005 2006 2007 2008 2009 2010

BA 265 113 72 371 620 41

ES 3,863 3,901 3,164 1,344 1,692 2,460

GO 17 4 422 436 1,833 762

MT 807 85 442 511 1,011 600

MS 230 0 36 1,059 739 433

MG 4,777 7,087 20,382 30,313 47,034 30,177

PR 2,051 8,920 10,404 12,108 12,221 9,170

RS 16,583 17,613 9,831 6,988 4,463 2,649

SC 6,838 4,136 5,095 3,942 2,980 2,837

SP 2,351 2,134 1,876 3,797 3,071 3,375

Others ..1 143 379 448 752 707

Total 37,782 44,136 52,102 61,318 76,416 53,211

Source: Banco Nacional do Desenvolvimento – BNDES (2006‑2010).¹ Values not identified.

In the period between 2005 and 2009, the disbursements by BNDES, through PROPFLORA, grew at an average rate of 15.1% p.a. However, the amount disbursed in 2010 (R$ 53.2 million) was 30.4% smaller than in 2009. It is noteworthy that this reduction was due to the postponement/cancellation of certain intended investments, as well as to delay barriers provided by the environmental licensing processes.


States that stood out as major receivers of the resources coming from PROPFLORA in 2010 were: Minas Gerais (56.6% of the amount available) and Paraná (17.2% of the total).

Table 4.06 presents the evolution of the amounts disbursed by PRONAF ECO. In the 2009/2010 crop year a significant growth can be seen in both the number of contracts (262.9%) and the amount funded (167.9%).

Table 4.06 Evolution of disbursements by the PRONAF ECO program, 2007-2010

State

2007/2008 Crop Year 2008/2009 Crop Year 2009/2010 Crop Year

Funded Amount (R$)

Number of Contracts

Funded Amount (R$)

Number of Contracts

Funded Amount (R$)

Number of Contracts

AP – – – – 475,102 37

BA 73,895 8 270,608 32 1,409,753 147

CE 31,840 2 – – 121,685 18

ES 40,000 4 176,639 10 522,959 49

GO – 126,605 6 241,403 27

MG 250,315 19 2,154,785 131 5,854,872 417

MS – 42,847 5 24,575 3

MT – – – – 52,123 8

PA – – – – 2,057,064 253

PE 27,418 5 – – – –

PR 979,601 66 1,011,007 97 2,139,569 294

RJ 35,458 3 52,232 4 108,551 7

RN – – – – 71,873 7

RO 15,526 1 – – 448,604 33

RS 210,561 19 913,323 85 2,128,272 306

SC 923,875 68 3,457,246 220 6,664,499 536

SP 106,357 9 1,069,080 59 2,526,556 213

Total 2,588,489 204 9,274,372 649 24,847,460 2,355

Source: Ministry of the Environment (MMA).

4.5 FIRJAN INDEX OF MUNICIPAL DEVELOPMENT

Among the indexes that measure the evolution of quality of life of a population in a region or locality, stand out the Human Development Index (HDI) of the United Nations Development Program (UNDP), and in the case of Brazil, the FIRJAN Index of Municipal Development (IFDM), created by the Industries Federation of the State of Rio de Janeiro (FIRJAN).

The HDI can follow the improvement in quality of life through the relationship between economic growth and improvement of social welfare and takes into account the socioeconomic indicators of income, education and longevity. The HDI for municipalities, however, is calculated only every 10 years, currently available only for the years 1991 and 2000. For this reason, we chose in the 2011 edition of this yearbook, the use of the FIRJAN Index updated until 2007.


Importance of Planted Forests in Brazil4CHAPTER The FIRJAN Index of Municipal Development (IFDM) annually monitors the economic, social and human development of municipalities from the standpoint of indicators considered essential, such as employment, income, education and health, organized on the basis of primary variables from official sources such as IBGE, the Ministry of Education and the Ministry of Labor and Employment. The index, which ranges from 0 to 1, reflects the highest level of development the closer to 1 it is.

Graphic 4.02 illustrates the IFDM of capitals and cities of selected states (Minas Gerais, Bahia and Paraná) where forestry activities, based on planted forests, stand out in the local socioeconomic scenario. This analysis allows us to observe the effect of forestry on local development.

Graphic 4.02 FIRJAN Index of selected capitals and cities involved with forestry

0.24

0.57 0.56

0.36

0.700.62

0.39

0.56 0.58

0.43

0.70 0.69

1.0

0.8

0.6

0.4

0.2

0.0

1.0

0.8

0.6

0.4

0.2

0.0

E&I Education Health E&I Education Health

2000 2007 2000 2007

BELO ORIENTE ITAMARANDIBA

1.0

0.8

0.6

0.4

0.2

0.0

1.0

0.8

0.6

0.4

0.2

0.0


2000 2007 2000 2007

0.67

0.34

0.73

0.61

0.78

0.61

0.86

0.42

0.72 0.72

0.86

0.65

MINAS GERAIS

BELO HORIzONTE JOÃO PINHEIRO


Graphic 4.02 FIRJAN Index of selected capitals and cities involved with forestry

(continuação)

0.64

0.12

0.43

0.28

0.75

0.60

0.86

0.570.61

0.44

0.750.67

1.0

0.8

0.6

0.4

0.2

0.0

1.0

0.8

0.6

0.4

0.2

0.0


2000 2007 2000 2007

0.390.46

0.37

0.570.58 0.56

0.48

0.620.54

0.60

0.73

0.66

EUNÁPOLIS TEIXEIRA DE FREITAS

1.0

0.8

0.6

0.4

0.2

0.0

1.0

0.8

0.6

0.4

0.2

0.0


2000 2007 2000 2007

BAHIA

SALVADOR ITABELA


Importance of Planted Forests in Brazil4CHAPTERGraphic 4.02 FIRJAN Index of selected capitals and cities involved with forestry

(continuação)

1.0

0.8

0.6

0.4

0.2

0.0

1.0

0.8

0.6

0.4

0.2

0.0


2000 2007 2000 2007

0.390.44

0.680.64

0.690.65

0.85

0.51

0.770.70

0.84 0.86

TELÊMACO BORBA ARAPOTI

1.0

0.8

0.6

0.4

0.2

0.0

1.0

0.8

0.6

0.4

0.2

0.0


2000 2007 2000 2007

0.59

0.28

0.75

0.63

0.88

0.71

0.90

0.33

0.770.71

0.94

0.84

PARANÁ

CURITIBA CAMPO DO TENENTE

Note: E&I – Employment and Income.

Source: FIRJAN System.

During the analyzed period (2000‑2007), all municipalities investigated showed a positive trend of the indicator of economic development in relation to income, health and education. Those municipalities with forestry activity presented, in relative terms, greater growth than those of their corresponding capitals, indicating the positive impact of these activities in municipalities in which they have a relevant position in the economic scenario.

More specifically, in the state of Minas Gerais, both the capital, Belo Horizonte, and the municipalities of João Pinheiro, Belo Oriente and Itamarandiba showed a growth in the FIRJAN index, with emphasis on Itamarandiba, which had the highest average variation among the aspects analyzed (17.8%), leveraged by the increase in the item income/employment (50.4%).


The municipalities analyzed in the state of Paraná also had indicators of the increasing variation in the period of 2000 through 2007, highlighting Telêmaco Borba, where the change in the item income/employment reached 116.6% in the analyzed period.

With respect to the municipalities of Bahia, stand out the results of Itabela, where the percentage variation in the indicator of income/employment reached 356.50%.

Thus, the conclusion is that the planted forests sector, predominantly in those towns, contributed to local development.

4.6 ENVIRONMENT

According to the Ministry of the Environment, in 2010 Brazil had 519.5 million hectares of native forests. Of this total, approximately 0.8% (3.9 million ha) was preserved by the companies of the planted forest sector in the form of permanent preservation areas (APP), of legal reserves (RL) and private reserves of the natural asset (RPPNs).

Table 4.07 Participation of the planted forests segment in the protection of natural forests, 2010¹

Environmental Preservationper Segment

Protected Area – Native Forests

ha (1,000) %

Planted Forests Segment 3,913 0.8%

Other Segments 515,609 99.2%

Total 519,522 100.0%

Source: ABRAF, MMA/SFB.¹ see methodology notes in Chapter 5 of this Yearbook.

4.6.1 Forest Certification

Forest certification, which can be obtained for the custody chain and for forest management, is a voluntary process developed since 1980.

In general, the system certifies, reliably and independently, that the timber used in a particular product comes from an environmentally friendly process, socially just, economically feasible and is economic, as well as complies with all applicable laws.

Certification systems are certified by stamps issued by certifiers and periodically checked through audits. These systems ensure minimum performance standards among certifiers. To avoid a proliferation of stamps on the market that may confuse the consumer, in 1993 was created the first accreditation body of certification (FSC – Forest Stewardship Council), which soon gained worldwide visibility. Some years later, new certifiers began to emerge, but with a less comprehensive scope.

Currently there are several forest certification systems, among which is the Canadian Standard Association (CSA), Programme for the Endorsement of Forest Certification schemes (PEFC) and the Forest Stewardship Council (FSC).

The certification systems of greater relevance in Brazil are the FSC and CERFLOR – Programa Brasileiro de Certificação Florestal (Brazilian Program of Forest Certification).


Importance of Planted Forests in Brazil4CHAPTER Globally, considering the two main accreditation bodies (FSC and PEFC), the certified forest area grew 10.0% in 2010, totaling 357 million hectares. It is noteworthy that the greatest increase occurred in North America and Russia (Graphic 4.03).

Graphic 4.03 Proportion of world forests certified by an accreditation agency, 2010

FSC 52%

PEFC 31%

Source: FSC, PEFC (2010).

Graphic 4.04 illustrates the evolution of certified areas over the past fourteen years. An intensification of growth can be observed for the certified annual area since 1999, as a result of increased attention to environmental preservation and maturation of the concept of sustainability.

Graphic 4.04 Evolution of certified forests in the world, 1996-2010

400

350

300

250

200

150

100

50

0

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Mill

ion

(ha)

4

63

207

11

123

287

320

8

97

256

300

33

156

295

357

Source: FSC, PEFC (2010).

In Brazil, there were approximately 5.8 million hectares of certified forests in 2010. Of this total, 4.7 million hectares of forests were certified by the FSC and 1.1 million hectares of forests were certified by the PEFC.


4.7 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY PROGRAMS

The member companies of ABRAF, as well as other forestry companies in Brazil, have increasingly invested in programs of social and environmental responsibility. Below will described the programs of forest, social, health, environment and education furtherance promoted by the member companies of ABRAF, during 2010.

4.7.1 Forest development

Forest development was promoted to meet the demand of raw materials by the forest‑based industries. Furthermore, this program regionally strengthens the companies’ social actions.

Under the environmental standpoint, forestation reduces pressure on natural forests, recovers degraded land and promotes soil preservation.

From the social point of view, this program reduces the concentration of land ownership, enables local activities, creates opportunities for additional income and helps to keep people living in the countryside.

The most frequent modalities of forest furtherance include supplying seedlings of forest species, anticipated income programs for farmers and guaranteeing the purchase of timber by the companies at the time of harvest.

In 2010, the individual members of ABRAF entered 841 new forest development contracts, which benefited 918 farmers and covered 37,000 hectares. With the figures accumulated until 2010, the individual members of ABRAF benefited 26,581 owners through 28,294 development contracts and covering an area of 448.6 thousand hectares (Table 4.08).

Table 4.08 Results of forest furtherance contracted with member companies of ABRAF, 2010

Type Number of Beneficiaries Number of ContractsArea

(thousand ha)

Cumulative until 2010¹ 26,581 28,294 448.6

New Contracts (2010) 918 841 37.0

Source: Individual associates of ABRAF (2011).¹ 2010 inclusive.


Importance of Planted Forests in Brazil4CHAPTER Graphic 4.05 shows the evolution of the number of development contracts with companies associated to ABRAF (2005‑2010).

Graphic 4.05 Evolution of the number of contractors, beneficiaries and the planted area in the furtherance programs of ABRAF associates – new (in each respective year) and cumulative, 2005-2010

500450400350300250200150100

500

2005 2006 2007 2008 2009 2010

CUMULATIVE CONTRACTS

Evolution of the Number of Contracts and Beneficiaries Evolution of the Additional Development Area

1,00

0 ha

Thou

sand

258.0

322.0352.0

443.0 457.0 448.630

25

20

15

10

5

0

2005 2006 2007 2008 2009 2010

26.6

28.3

22.0

24.4

17.0

18.725.7

27.5

20.8

22.2

9.0

15.6

Beneficiary Contracts

80

70

60

50

40

30

20

10

0

2005 2006 2007 2008 2009 2010

NEW CONTRACTS

Evolution of the Number of Additional Contracts and Beneficiaries Evolution of the Additional Development Area

1,00

0 ha

Thou

sand

33.0

65.0 66.771.9

26.4

37.2

5.0

4.0

3.0

2.0

1.0

0.0

2005 2006 2007 2008 2009 2010

0.9

0.8

2.1

2.4

2.3

2.4

0.9

1.0

4.1

4.3

0.8

2.2

Beneficiary Contracts

Source: Individual associates of ABRAF (2011).


It is important to point out that the reduction of the development area in 2010 was not due to the cancellation of existing contracts, but to the reclassification of areas that were previously classified as development, but in fact were plantations developed by forestry expansion.

4.7.2 Social Programs

Investments in social programs made by companies associated to ABRAF totaled R$ 81.5 million in 2010, a figure 32.3% higher than the amount of investments made in 2009. The number of Municipalities Covered increased 65.2% and the number of benefited people, 21.5%. It is noteworthy that this growth was due to the affiliation of two new companies to the group of associates of ABRAF, as well as the inclusion of data from companies that had not been covered in the statistics of the previous year (Table 4.09).

Table 4.09 Results of the social programs promoted by companies associated to ABRAF, 2005-2010

Year Number of People Served Number of Municipalities CoveredInvestment

(R$ thousands)

2005 652,827 579 36,334

2006 1,088,457 742 76,264

2007 1,567,244 704 77,764

2008 2,181,487 993 65,418

2009 2,373,613 597 61,639

2010 2,884,075 986 81,544

Source: Individual associates of ABRAF (2011).

4.7.3 health

In 2010, the services provided by member companies of ABRAF to their employees and local communities through programs of medical and dental care amounted to R$ 20.6 million, benefiting 409,000 people in 93 municipalities. Compared to 2009, investments decreased 17.7% due to the sale of a forestry asset of a company associated to ABRAF.

Table 4.10 Results of the health programs promoted by companies associated to ABRAF, 2005-2010

YearNumber of Beneficiaries

(thousand)Number of Municipalities Covered

Investment(R$ thousands)

2005 63 137 7,311

2006 364 100 23,636

2007 205 59 21,578

2008 303 75 24,206

2009 331 68 25,067

2010 409 93 20,618



Importance of Planted Forests in Brazil4CHAPTER4.7.4 Environment

The environmental programs carried out by companies associated to ABRAF totaled R$ 34.4 million in 2010, distributed in 196 municipalities. Regarding 2009, the total amount invested and the number of municipalities increased, respectively, 131.5% and 29.8%. It is noteworthy that the reduction in the number of beneficiaries was due to methodological adjustments (Table 4.11).

Table 4.11 Results of the environmental programs promoted by companies associated to ABRAF, 2005-2010



Investment(R$ thousands)

2005 167 98 11,156

2006 131 232 26,912

2007 210 191 30,904

2008 1,548 351 15,197

2009 1,475 151 14,492

2010 296 196 34,440


4.7.5 Education and Culture

Investments related to social inclusion programs for employees of companies associated to ABRAF, as well as their dependents and the surrounding communities, added R$ 16.7 million in 2010. In general lines, these programs consist in actions for improvement of school education, in fighting illiteracy and in taking culture to the neighboring communities. Regarding 2009, the amount invested increased 7.21% (Table 4.12).

In 2010, these programs benefited 623,000 people in 1.1 thousand municipalities. It is noteworthy that the significant increase of these indicators compared to 2009 was due to the inclusion of data from companies that had not participated in the statistics of the previous editions.

Table 4.12 Results of the educational and cultural programs promoted by companies associated to ABRAF, 2005-2010



Investment (thousand R$)

2005 397 296 14,615

2006 309 273 20,454

2007 1,137 319 21,162

2008 292 381 21,392

2009 396 233 14,050

2010 623 1,116 16,685



4.7.6 Non-timber Forest Production

Table 4.13 shows the history of investments in the production of non‑timber forest products (PFNM) by the member companies of ABRAF. In 2010, the investment in the production of PFNMs, of about R$ 2.4 million, benefited 5,090 people in 169 municipalities. It is noteworthy that the investments made by a large company in this sector, aiming at the development of beekeeping in their areas of expertise, represented 63.8% of the total amount invested by the members.

Table 4.13 Results of the PFNM production in areas of companies associated to ABRAF, 2005-2010

Year Number of BeneficiariesNumber of

Municipalities coveredInvestment

(R$ thousands)

2005 1,310 35 354

2006 1,342 30 72

2007 3,448 80 337

2008 6,499 87 357

2009 1,760 61 94

2010 5,090 169 2,368


Excelência. Tecnologia. Sustentabilidade.

A Brookfi eld possui mais de 100 mil hectares de áreas produtivas e de preservação, com fl orestas renováveis de pinus e eucalipto em Santa Catarina, Paraná, Mato Grosso do Sul e Minas Gerais.

Respaldados pela experiência global de investimentos da Brookfi eld, presente há mais de 100 anos no Brasil e com 1,2 milhão de hectares de fl orestas de alta qualidade plantadas no mundo, combinamos um plano estratégico de investimentos e técnicas modernas na produção fl orestal.

Nossas fl orestas são preparadas e manejadas para atender diversos clientes com um portfólio completo de produtos fl orestais e temos 40 anos de experiência e expressivos investimentos realizados em refl orestamento e aquisições.

Com base no respeito ao meio ambiente, colaboradores, clientes e comunidades que nos cercam, seguimos oferecendo o que sabemos fazer melhor: parcerias de longo prazo e excelência em práticas fl orestais sustentáveis.

Brookfi eld owns and operates over 100 thousand hectares of productive and preservation pine and eucalyptus renewable timberlands in Santa Catarina, Paraná, Mato Grosso do Sul and Minas Gerais.

Supported by Brookfi eld’s 100+ years of investment experience in Brazil, a global investment platform and over 1.2 million hectares of high quality timberlands planted in the world, we combine a strategic investments plan with modern techniques in forest production.

Our timberlands are prepared and managed to meet a variety of clients’ needs with a complete portfolio of forest products and we have 40 years of investment experience in reforestation, acquisitions and fi nancing timberlands.

Based on respect for the environment, employees, clients and communities that surround us, we continue to offer what we know best: long-term partnership and best-in-class sustainable forest practices.

Desde 1971 investindo em fl orestas no Brasil

www.comfl oresta.com.br

MEthodoLogy notES

AREA WIth PlANtEd FoREStS IN BRAZIl

totAl PRESERvAtIoN AREA lINkEd to PlANtEd FoREStS

BAlANCE oF PRodUCtIoN ANd CoNSUMPtIoN oF RoUNd Wood ANd FoRESt PRodUCtS

GRoSS vAlUE oF FoREStRY PRodUCtIoN (vBPF)

tAX CollECtIoN

PRodUCtIoN ANd CoNSUMPtIoN oF FoRESt PRodUCtS

CoMMERCIAl BAlANCE oF FoRESt PRodUCtS

EMPloYMENt GENERAtIoN

FIRJAN INdEX oF MUNICIPAl dEvEloPMENt (IFdM)

5CHAPTER

118 CHAPTER 5 :: METHodology noTEs

Methodology notes5CHAPTER5 MEthodoloGY NotES

This chapter presents a description of the methodology used in the preparation of this yearbook, regarding the

collection, compilation and analysis of the data of 2010.

For the preparation of yearbook 2011 (base 2010), the Associação Brasileira de Produtores de Florestas

Plantadas (Brazilian Association of Planted Forest Producers) – ABRAF adopted a similar methodology to the one used

in previous yearbooks. The quantitative analysis presented in the yearbook derived from the collection of primary and

secondary data.

The primary data were obtained through:

• Complete questionnaires to member companies of ABRAF;

• Simplified questionnaires to state collective associations linked to ABRAF;

• Contact with class associations such as Associação Brasileira da Indústria de Painéis de Madeira (Brazilian

Association of the Wood Panel Industry) – ABIPA, Associação Brasileira de Celulose e Papel (Brazilian

Association of Pulp and Paper) – BRACELPA, Associação Brasileira das Indústrias de Mobiliário (Brazilian

Association of Furniture Industries) – ABIMÓVEL, Sindicato da Indústria do Ferro do Estado de Minas Gerais

(Union of the Iron Industry of the State of Minas Gerais) – SINDIFER‑MG and others; and

• Collecting information from companies not associated to ABRAF.

Secondary data were collected from research institutions as IBGE, Instituto de Economia Agrícola de São Paulo

(Agricultural Economics Institute of São Paulo), Associação Paulista de Produtores e Beneficiadores de Borracha (São

Paulo Association of Rubber Producers and Processors), Centro de Pesquisas do Paricá (Research Centre of the Paricá),

platforms of official data, such as Alice Web of the MDIC, CAGEG of the MTE, MMA and MDA.

5.1 AREA WITH PLANTED FORESTS IN BRAzIL

References: Chapter 1 – Item 1.1: Area planted with Eucalyptus and Pinus in Brazil

The area planted with Eucalyptus and Pinus in Brazil was estimated from data obtained in:

• Completed questionnaires answered by the individual member companies of ABRAF;

• Simplified questionnaires answered by the state collective associations: Associação Mineira de Silvicultura

(Minas Gerais Forestry Association) – SMA; Associação Gaúcha de Empresas Florestais (Rio Grande do Sul

Association of Forestry Companies) – AGEFLOR; Associação Paranaense de Empresas Florestais (Paraná

Association of Forestry Companies) – APRE, Associação Catarinense de Empresas Florestais (Santa Catarina

Association of Forestry Companies) – ACR, Associação Sul‑Mato‑Grossense de Produtores e Consumidores

de Florestas Plantadas (Mato Grosso do Sul Association of Producers and Consumers of Planted Forests) –

119METHodology noTEs :: CHAPTER 5

REFLORE; Associação dos Reflorestadores do Tocantins (Reforesters Association of Tocantins) – ARENTIS and Associação dos Fumicultores do Brasil (Tobacco Growers Association of Brazil) – AFUBRA.

• Official documents and data from government institutions and autarchic institutions, such as state secretaries, institutes, foundations; and

• Contact with several companies of this sector not associated to ABRAF.

As the information of the planted area in Brazil were presented by state of the federation to a great extent in Chapter 1, the methodology for obtaining these estimates is detailed below, by state:

• Amapá:The estimated forest area planted with Pinus and Eucalyptus in the year 2010 was based on direct contact with forestry companies not associated to ABRAF and established in the state. It is estimated that the plantation area for the state may have a variation of about 22.5%.

• Goiás:The planted area in the state in 2010 was estimated by direct contact with forestry companies not associated with ABRAF and by comparing the areas considered in the previous edition of this yearbook. It is estimated that the plantation area for the state may have a variation of about 20%.

• Bahia:The planted area of the state in 2010 was estimated by compiling data sent by the individual associates of ABRAF and by direct contact with forestry companies not associated to ABRAF. It is estimated that the plantation area for the state may have a variation of about 7.4%.

• EspíritoSanto:For this unity of the federation, the planted area in 2010 was estimated through the data submitted by the individual associates of ABRAF and by comparing the areas considered in the previous edition of this yearbook. Direct contact with forestry companies not associated ABRAF also complemented the estimate. It is estimated that the plantation area for the state may have a variation of about 14.3%.

• Maranhão: For that state in 2010, the area planted with Eucalyptus was estimated from the compilation of data supplied by the individual associates of ABRAF, along with information of forestry companies not associated to ABRAF, and by comparing the areas considered in the previous edition of this yearbook. It is estimated that the plantation area for the state may have a variation of about 12.2%.

• Pará: The area planted with Eucalyptus in 2010 was estimated using the information provided by the individual associates of ABRAF and companies not associated to ABRAF. The evolution of the area planted in 2009‑2010 by expressive companies in the state was considered in calculating the estimate. It is estimated that the plantation area for the state may have a variation of about 26.6%.

• MatoGrosso:The estimate of the area planted with Eucalyptus in 2010 for this state was made using data supplied by individual and collective member companies of ABRAF, as well as with information obtained through direct contact with companies not associated to ABRAF and by comparing the areas considered in the previous edition of this yearbook. It is estimated that the plantation area for the state may have a variation of about 16.4%.

• MatoGrossodoSul:To estimate the planted area in that state in 2010, were compiled information provided by the individual member companies of ABRAF, by REFLORE and by companies not associated to ABRAF. It is estimated that the plantation area for the state may have a variation of about 3.3%.


Methodology notes5CHAPTER • Minas Gerais: Estimation of Eucalyptus planted in 2010 for that state was carried out by marking the

information supplied by the AMS with the information obtained by the individual associates of ABRAF and by direct contact with companies not associated to ABRAF. In the case of Pinus plantations, the estimate computations were made by compiling data supplied by the individual associates of ABRAF and information from forestry companies not associated with ABRAF, along with the comparison with the areas considered in the previous edition of this yearbook. Estimated data based on information from the Forest Inventory, prepared by the Departamento de Ciências Florestais (Department of Forest Sciences) – DCF, of the Federal University of Lavras (UFLA), of the Associação Mineira de Silvicultura (Minas Gerais Forestry Association) – SMA, Instituto Estadual de Florestas (State Forest Institute) – IEF, and companies associated to AMS and ABRAF. It is estimated that the plantation area for the state may have a variation of about 2.1%.

• Paraná: To estimate the planted area in that state in 2010, were compiled information provided by the individual member companies of ABRAF, by APRE, AFUBRA and through direct contact with companies not associated to ABRAF. In the specific case of Pinus, the area considered in the previous edition of this yearbook was the basis. It is estimated that the plantation area for the state may have a variation of about 9.8%.

• RioGrandedoSul:The statistical data for the area of Pinus plantation in Rio Grande do Sul, in 2010, were obtained from estimates provided by AGEFLOR. In relation to Eucalyptus, the planted area was estimated from the compilation of data from the individual and collective associates of ABRAF. It is estimated that the plantation area for the state may have a variation of about 16.4%.

• Santa Catarina: To estimate the planted area information was provided by the individual associates of ABRAF, by ACR, APRE, AFUBRA, as well as through direct contact with companies not associated to ABRAF. For Eucalyptus as for Pinus, the area presented in the previous edition of this yearbook was considered to estimate the area planted in 2010. It is estimated that the plantation area for the state may have a variation of about 16.0%.

• SãoPaulo:The statistical data for the plantation area with Pinus in that state, in 2010, was obtained from estimates provided by the Instituto de Economia Agrícola de São Paulo (Institute of Agricultural Economy of São Paulo) – IEA. On its turn, the latter estimates the area planted by municipality in the state, collecting information from the companies in the industry about their planted areas. In the case of Eucalyptus, the information provided by the individual and collective associates of ABRAF, the information obtained from companies not associated to ABRAF and the area considered in the previous edition of this yearbook were considered in the estimate of planted area. This estimate was also based on data collected by the IEA. It is estimated that the plantation area for the state may have a variation of about 4.1%.

• Tocantins:To estimate the planted area with Eucalyptus and Pinus in that state in 2010, were compiled information provided by the individual member companies of ABRAF, by ARETINS and through direct contact with companies not associated to ABRAF, as well as the area planted with Eucalyptus considered in the previous edition of this yearbook. It is estimated that the plantation area for the state may have a variation of about 9.8%.

• Piauí: The area planted with Eucalyptus in 2010 was estimated using the information provided by the individual associates of ABRAF and companies not associated to ABRAF. In this edition of the yearbook we highlighted the state of Piauí, which formerly was of little significance in forestry and in 2010 presented a


Eucalyptus area of 37,025 ha, thus being excluded from the category “other states”. It is estimated that the

plantation area for the state may have a variation of about 8.2%.

• OtherStates:Other states with forestry activity under development: Rio de Janeiro, Rondônia and Roraima.

The area planted with Eucalyptus and Pinus in 2010 was estimated using the information provided by the

individual associates of ABRAF and data raised from companies not associated to ABRAF.

Reference: Chapter 1 – Item 1.2: Area planted with Eucalyptus and Pinus by associates of ABRAF

The area of forest plantations of companies associated to ABRAF for the year 2010 was estimated based on the

compilation of data obtained through the following data sources:

• Completed questionnaires answered and supplied individually by the individual member companies of

ABRAF; and

• Simplified questionnaire answered by the collective associates of ABRAF, containing information about

the planting area of the companies affiliated to each association. As mentioned in the previous item, the

information and data were provided by ACR (Santa Catarina), AGEFLOR (Rio Grande do Sul), AMS (Minas

Gerais), APRE (Paraná), REFLORE (Mato Grosso do Sul) and ARETINS (Tocantins).

Reference: Chapter 1 – Item 1.3: Forests planted with other groups of species

The area planted with other species in Brazil was estimated from the compilation of data obtained through:

(i) completed questionnaires answered by the individual member companies of ABRAF; (ii) simplified questionnaires

answered by the collective state associations; (iii) official documents and data from government institutions and autarchic

institutions, such as state secretaries, institutes, foundations; and (iv) contact with several companies in the industry not

associated to ABRAF.

Below are the details of the methodology used to estimate the planting area of other species used in forestry

in Brazil:

• Acacia:The area planted with this species in 2010 was estimated by using information provided by individual

member companies of ABRAF, by AGEFLOR, ARETINS, as well as through direct contact with companies not

associated to ABRAF.

• Rubbertree:The planted area in the country in 2010 was estimated based on information provided by the

Associação Paulista de Produtores e Beneficiadores de Borracha (São Paulo Association of Rubber Producers

and Processors) – APABOR.

• Paricá: To estimate the area of plantations in the states of Maranhão and Pará in 2010, the Centro de Pesquisa

do Paricá (Research Center of the Paricá) – CCP was consulted.


Methodology notes5CHAPTER • Teak:The statistical data about the planted area in 2010 were obtained from estimates provided by AGEFLOR,

APRE and several companies not associated to ABRAF.

• Araucaria:To area planted in 2010 was estimated compiling information provided by individual member companies of ABRAF, by ACR, APRE and AGEFLOR, and through direct contact with companies not associated to ABRAF.

• Populus:The statistical data about the planted area in 2010 were obtained from estimates provided by ACR, APRE and several companies not associated to ABRAF.

• Others:Refers to the species Bracatinga, Japanese Raisin Tree, Pupunha, Indian Neem, Walnut‑Pecan, etc. The area planted with other species was estimated for 2010 from the compilation of information provided by the individual associates of ABRAF, by collective associates such as AGEFLOR, APRE and ARETINS, as well as by companies not associated to ABRAF.

5.2 TOTAL PRESERVATION AREA LINKED TO PLANTED FORESTS

Reference: Chapter 4 – Item 4.6: Environment – table 4.09

The total area of forests planted with Eucalyptus, Pinus and other species (estimated in 6,897,168 ha in 2010), along with the area of natural forests protected by the individual member companies of ABRAF, made it possible to estimate the total protection and preservation area linked to the planted areas in the country.

Below are the legal concepts adopted in this yearbook for the various types of protection and preservation areas (Legal Reserve – RL, Permanent Preservation Areas – APP and Private Reserve of the Natural Assets – RPPN).

• Permanent Preservation Area (APP): According to Federal Law 7.803/89, amending Articles 2 and 3 of the Brazilian Forest Code (Federal Law 4.771/65), the Permanent Preservation Area is any area “covered or not by native vegetation, with the environmental function of preserving water resources, landscape, geological stability, biodiversity, gene flow of fauna and flora, soil protection and to ensure the well‑being of human populations.” For purposes of this Law, the riparian or gallery forests are considered APPs, because they are included in the concept of forests and other forms of natural vegetation along rivers or any water course on a marginal strip that depends on their width. Also, the tops of hills, areas around natural or artificial water reservoirs (ponds/lakes), at altitudes above 1,800 meters and other possibilities detailed in Articles 2 and 3 of the aforementioned Law are also considered APPs.

• Legal Reserve (RL): The Legal Reserve is described in the Brazilian Forest Code (Law 4.771/65 modified by MP 2166‑67, 2001) and is defined as any “area located within a rural property or possession, except for those of permanent preservation, necessary for the sustainable use of natural resources, conservation and rehabilitation of ecological processes, biodiversity conservation, shelter and protection of native flora and fauna.” Moreover, the concept of Legal Reserve has been reviewed with the approval of Law 7.803/89, which introduced, among other aspects, the requirement of registration of the Legal Reserve on the sides of the entry of the property registration, being forbidden “the change of its destination, in case of transmission, in any way, or separation of the area” (Art. 16 § 2).


• Private Reserve of Natural Assets (RPPN): Since they are meant to preserve biological diversity in an estate and a region, and as it is a voluntary act as a means of promoting actions by the civil society in the conservation of biological diversity, RPPNs are considered an instrument through which a private property contributes to the protection and conservation of the environment as a whole. Establishing it provides benefits to institutions/owners (e.g.: preserved property rights, exemption from Rural Property Tax (ITR) over the RPPN area, the possibility of overlapping the perimeter of RPPNs with APPs and RLs, among others). The RPPN is a conservation unit established pursuant to Decree 1.922/96, which justifies its importance through: (i) contribution to the expansion of protected areas in the country;, (ii) extension of ecological corridors in the vicinity of UCs; (iii) promotion of private participation in the national effort of conservation; (iv) collaboration with the conservation of the Brazilian biomes’ biodiversity; and (v) others.

Several member companies of ABRAF maintain significant RPPN areas in their estates, effectively helping to ensure the improvement of environmental quality in their region.

5.3 BALANCE OF PRODUCTION AND CONSUMPTION OF ROUND WOOD AND FOREST PRODUCTS

Reference: Chapter 3 – Item 3.2: Round wood

Until the end of data collection for this yearbook, IBGE’s (Brazilian Institute of Geography and Statistics) SIDRA’s (Automatic Recovery System) data platform had not yet disclosed the data on round wood production for the year 2010. The PEVS’s (Extraction Plant Production and Forestry) historical series from 2003 to 2009 served as the basis for the composition of the analysis of output growth.

The estimated consumption of round wood from production data was possible by using equivalence conversion factors of the ratio of round wood by the amount of manufactured product for those industries associated with planted forests (Table 5.01).

Table 5.01 Conversion factors used in the ABRAF statistical yearbook, 2010

Product Unit Conversion Factor

Short Fiber Pulp m³ log / t (product) 4.00

Long Fiber Pulp m³ log / t (product) 4.00

High Yield Pulp m³ log / t (product) 2.66

Pinus Lumber m³ log / t (product) 3.00

Charcoal m³ log / MDC (product) 1.20

Particleboard / MDF / Hardboard m³ log / m3 (product) 2.00

Pinus Plywood m³ /log m3 (product) 2.30

Pig Iron mdc/t of product 3.00

Source: ABRAF Yearbook (2010) and various sources compiled by Pöyry Silviconsult (2011).


Methodology notes5CHAPTER5.4 GROSS VALUE OF FORESTRY PRODUCTION (VBPF)

Reference: Chapter 4 – Item 4.1: Gross value of forestry production – table 4.01

The gross value of forestry production (VBPF) is the indicator that measures the activity level of the forestry

sector, following the same calculation that measures the gross value of the agriculture and livestock sectors, characterizing

their performance in a given period. Its calculation consists in assessing and consolidating the turnover of industry

segments related specifically to planted forests.

The VBPF of each industrial segment in the production chain that uses plantation forests was evaluated

considering its total turnover collected from national sector associations that report periodical statistics and in their

specialized publications, such as statistical yearbooks and sector studies. In this case, the Associação Brasileira da Indústria

de Painéis de Madeira (Brazilian Association of the Wood Panel Industry) – ABIPA provided official data updated to

2010, while the Associação Brasileira de Celulose e Papel (Brazilian Association of Pulp and Paper) – BRACELPA helped

to estimate this indicator, given that official data were not available yet. Based on the turnover of the charcoal segment

in 2009, an estimate was made regarding the turnover of 2010 by applying an average growth rate of the pig iron output

in 2010. Regarding furniture, were used the data published as estimates for 2010 in the Sectoral Report of the Furniture

Industry in Brazil 2010.

The timber industry’s turnover was estimated by the sum of the multiplication between industrial production

and the average market price of each product, according to Pöyry Silviconsult’s database.

The VBPF regarding Agribusiness Forest System is the sum of values of the top five production chains associated

with planted forests (pulp and paper, lumber, reconstituted panels, charcoal metallurgy and furniture).

Additionally, the VBPF was calculated for the primary forestry sector, which measures the sum of turnovers of

each primary forestry production segment associated with forest plantations, notably forestry and charcoal production.

The VBPF estimation of the forestry primary sector in this Yearbook was made based on data from the gross value of

forestry production prepared by the Brazilian Institute of Geography and Statistics (IBGE) for base year 2009, estimating

the value for 2010.

5.5 TAX COLLECTION

Reference: Chapter 4 – Item 4.2: tax Collection – table 4.02

The tax system in the country currently has a list of more than 80 taxes (taxes, contributions and fees) that fall

on economic activities in Brazil at the federal, state and municipal levels. The information regarding taxes collected by

the companies of the planted forest sector was primarily obtained from national industry associations and from sector

publications and statistical yearbooks.

To obtain the estimates of taxes collected by the planted forest sector two computation methodologies were

used, due to difficulties in obtaining statistical data for each segment of the production chain:


• Methodology 1: building on the estimated VBPF of each segment associated with planted forests, a percentage was applied on the estimated contribution of collected taxes, by segment, in order to estimate the corresponding value of taxes collected by the planted forest sector as a whole. The percentages were obtained from a study published by the newspaper Folha de S. Paulo in 2005 for different economic sectors. For the forestry segments not shown in this study, a percentage of related segments was used. For round wood and charcoal the percentage of tax burden used was 0.2163, while for timber and furniture industries this percentage was that one of the miscellaneous industries (0.2300). For the pulp & paper and manufactured wood panels segments the total of taxes paid in 2010 was used for each segment, respectively consolidated by the BRACELPA (equivalent factor of 0.0767) and ABIPA factor (equivalent factor). Thus, the estimated total tax collection by the planted forest sector in 2010, through this method, amounted to R$ 7.41 billion, as shown in Table 5.02.

Table 5.02 Estimates of tax collection by the plantation forests transformation segments, 2010 – Methodology 1

Products/Segments VBPF (R$) Factor Estimated Paid Taxes (R$) Data Source and Reference

Pulp and Paper 29,060,318,880 0.0767 2,228,926,458 BRACELPA

Timber Industry 7,597,427,494 0.2300 1,747,408,324 ABIMCI/IBGE/FOLHA

Reconstituted Panels 5,404,456,786 0.2222 1,200,870,298 ABIPA/FOLHA

Furniture 8,518,969,466 0.2300 1,959,362,977 ABIMÓVEL/SECEX/FOLHA

Charcoal Metallurgy 1,262,202,865 0.2163 273,014,480 AMS/SINDIFERFOLHA

Total 51,843,375,491 7,409,582,536

Source: ABIMCI, ABIMÓVEL, ABIPA, AMS, BRACELPA, IBGE, FOLHA de S. Paulo, SECEX, SINDIFER. Adapted by Pöyry Silviconsult (2011).

• Methodology2:to estimate the taxes paid by segment, were considered the total taxes reported by the class associations for each segment, as well as a conversion factor solely on the contribution of planted forests. When no data were available on the total taxes, these data were estimated by Pöyry Silviconsult according to methodology 1, described above. The conversion factor mentioned was estimated by Pöyry Silviconsult, as reported below. Specifically for the segments of pulp and paper, reconstituted panels, furniture and metallurgy, it was considered that 100% of taxes are associated with planted forests, once it is the sole source of raw materials for these industries. For the timber industry segment, the ratio of wood production from planted forests (forestry) in relation to the total production of wood (forestry and plant extraction) estimated through data from IBGE/SIDRA was used.


Methodology notes5CHAPTERTable 5.03 Estimates of tax collection by the plantation forests transformation segments, 2010 –

Methodology 2

Products/Segments Total Taxes Paid by the

Segment (R$) Factor Relating to Taxes

on Planted Forests Estimated Tax Collection (R$)

Methodology 2 Data Source and Reference

Pulp and Paper 2,228,926,458 1.000 2,228,926,458 BRACELPA

Timber Industry 2,300,000,000 0.744 1,711,200,000 ABIMCI/ABRAF

Reconstituted Panels 1,200,870,298 1.000 1,200,870,298 ABIPA/ABRAF

Furniture 1,959,362,977 1.000 1,959,362,977 PSC

Charcoal Metallurgy 273,014,480 1.000 273,014,480 PSC

Total 7,409,582,536 - 7,373,374,213 -

Source: ABIMCI, ABIPA, BRACELPA, adapted by Pöyry Silviconsult (2011).

For the year 2010 the estimated total taxes paid by the planted forest sector through methodologies 1 and 2 amounted, respectively, to R$ 7.41 billion and 7.37 billion (Tables 5.02 and 5.03). Methodology 1 was adopted in this yearbook, since not all the information about total taxes were provided directly by class entities.

5.6 PRODUCTION AND CONSUMPTION OF FOREST PRODUCTS

Reference: Chapter 3 – Item 3.1.1: Production and consumption – Charts 3.01 to 3.05

To compose a historical series of pulp and paper production and consumption, data from BRACELPA were used; for the wood panels segment, data from ABIPA; and for charcoal, data from AMS and SINDIFER. In relation to the timber industry and due to the lack of data from ABIMCI, Pöyry Silviconsult carried out a survey on production and consumption through a primary contact with a representative sample of companies in the lumber, plywood and treated wood segments.

5.7 COMMERCIAL BALANCE OF FOREST PRODUCTS

Reference: Chapter 3 – Item 3.1.2: International trade – table 3.01

Through the ALICEWEB System of the Ministry of Development Industry and Commerce’s (MDIC) Foreign Commerce Secretary (SECEX) were obtained data on the trade balance of forest products (in monetary values of export and import).

These statistics were taken from the System using the Mercosur Common Nomenclature (NCM) on forest products for the year 2010, thereby obtaining the export values for the products considered as originated specifically from planted forests.


5.8 EMPLOYMENT GENERATION

Reference: Chapter 4 – Item 4.3: Employment Generation – table 4.03

To estimate the number of direct and indirect job posts and income‑effect of the planted forest sector in 2010, the “New Model for Job Generation” was used, published by BNDES, which considers that the number of job posts generated is proportional to the increase of production of each economy sector.

According to the Employment Generation Model by BNDES, jobs can be rated as follows:

• DirectJobs: corresponds to the additional manpower required by the sector where an increase in production is seen, so there will be variations in employment in the sector where there was an increase in demand.

• IndirectJobs: corresponds to the job posts that arise in emerge in sectors comprising the production chain, since the production of a final good stimulates the production of all materials needed to produce it. Thus, an increase of demand in a particular sector leads to increased production of not only that industry, but throughout the production chain.

• Employmentincome-effect: obtained from the transformation of the workers’ and entrepreneurs’ income into consumption. Both will spend part of their income consuming various goods and services, according to their consumption profile, thus stimulating the production of other sectors and feeding back the process of job generation.

To calculate the number of job posts generated in the planted forest sector for the industrial segments of metallurgy, wood and furniture, as well as pulp and paper, indicators were calculated to generate direct and indirect job posts, as well as income‑effect for each forestry segment, considering the methodology BNDES indicates (base 2007).

Considering the data about job posts generation (direct, indirect and income‑effect) from BNDES, Table 5.04 shows the ratio between the absolute number of job posts generated by the major industrial sectors of the planted forest sector (see Chapter 4, Table 4.02 in this Yearbook), of the direct and indirect job posts and income‑effect over the total number of job posts. It is noteworthy that for forestation the indexes presented were estimated from the participation of job posts in forestry activities in the state of Minas Gerais, obtained from the AMS Yearbook/2007 (average number of job posts generated by companies in the planted forests segment divided by the total area of planted forests in the state).


Methodology notes5CHAPTER In Table 5.04 are shown the estimates for the generation of direct and indirect job posts and income‑effect for the different industries of forestry, including forest plantations and natural forests for commercial purposes.

Table 5.04 Factors for job posts generation calculated for forestry and for the steel, lumber, furniture and pulp and paper segments

Segment SourceJob Posts

Direct Indirect Income -Effect Total

Forestry Sector ABRAF Yearbook 13% 53% 34% 100%

Charcoal Metallurgy BNDES 2% 21% 77% 100%

Lumber1 and Furniture BNDES 32% 24% 44% 100%

Pulp and Paper BNDES 10% 23% 67% 100%

Source: ABRAF Yearbook (2010) and BNDES (2007).1 Includes reconstituted panels (MDP, MDF, Hardboard and OSB) and solid wood products (plywood, lumber and PMVA).

Subsequently, these factors were used to estimate the generation of indirect job posts and income‑effect for each industrial segment of the planted forests sector, based on estimated direct job posts. In turn, direct job posts were obtained through the General Register of Employed and Unemployed (CAGED) and through surveys in studies and statistics of class associations such as ABIMÓVEL, ABIPA, AMS and BRACELPA.

For the steel industry was applied the factor of 34.4%, which corresponds, according to data from the AMS Yearbook/2009, to the portion of the production of steel on charcoal (thus excluding the relative percentage of consumption of coking coal). In the case of wood products and pulp & paper, the factor considered was 100%, because these segments use only wood from forest plantations for their production. Taking for granted the ratio of total Brazilian exports of furniture in general (wood and non‑wood) and the Brazilian only‑wood furniture exports, a factor of 86.4% was obtained. This percentage was used as a proxy to represent the portion within the segment referred exclusively to wood products for the year 2010, as shown in Table 5.05.

Table 5.05 Estimate for the generation of job posts in the industrial segments linked to the forestry sector as a whole (planted and natural forests), 2010

Industrial SegmentSegment (TOTAL) Forestry Sector

Direct Indirect Income-Effect Total Factor Total

Steel Industry 90,900 954,450 3,499,650 4,545,000 34.4% 1,563,480

Wood Products ¹ 213,716 160,287 293,860 667,863 100.0% 667,863

Furniture 244,001 183,001 335,501 762,503 86.4% 658,803

Pulp and Paper 112,817 259,479 755,874 1,128,170 100.0% 1,128,170

Total 661,434 1,557,217 4,884,885 7,103,536 4,018,315

Source: Various sources compiled by Pöyry Silviconsult (2011).1 Includes reconstituted panels (MDP, MDF, Hardboard and OSB) and solid wood products (plywood, lumber and PMVA).


To determine the job posts generated only in the planted forest sector (forestry) with respect to forestry, two calculation methodologies were used, as described below:

• Methodology 1: using the ratio between the number of job posts generated by individual associates of ABRAF and these companies’ planted forests area, the factor (employee/planted area) was determined. Subsequently, by multiplying the total area of planted forests in Brazil (Eucalyptus, Pinus and other species) by this factor, 237,944 direct job posts were estimated, related to forestry activities of planted forests in Brazil.

• Methodology2:similar to methodology 1, taking as granted the relationship between the average number of job posts generated by companies in the planted forests segment in Minas Gerais (AMS Yearbook) and the total area of forest plantations in the state, a number of 176,404 job posts was estimated as directly linked to forestry plantations in Brazil.

Table 5.06 shows the consolidated results of employment generation for the planted forest sector. The factors adopted to exclude the share of job posts linked with native forests were: 100% for forestry, 100% for pulp and paper, 52.6% as a share of planted forests for charcoal production (estimated from data provided by AMS/SINDIFER), 87.5% for the wood segment and 86.4% for the furniture segment. It is noteworthy that for the last two segments the factors were estimated from production data about plant extraction and forestry by IBGE/SIDRA – the proportion of round wood production in forestry in relation to the total round wood production.

Table 5.06 Estimate of the number of job posts in forestry and in the industrial segments linked to planted forests, 2010

SegmentPlanted Forests Sector

Direct Indirect IncomeEffect Total Factor

Forestry

1. Methodology 1 237,944 970,081 622,316 1,830,341 100.0%

2. Methodology 2 176,404 719,188 461,366 1,356,958 100.0%

Forestry Industry

Charcoal Metallurgy 47,804 263,973 967,901 1,279,678 52.6%

Wood Products ¹ 187,040 122,770 257,179 566,989 87.5%

Furniture 116,361 87,271 159,996 363,627 63.9%

Pulp and Paper 112,817 259,479 755,874 1,128,170 100.0%

Total – Forest Industry 464,022 733,492 2,140,950 3,338,464

Total 1 (value of the line Forestry Industry Total + line 1. methodology 1)

701,966 1,703,573 2,763,266 5,168,806

Total 2 (value of the line Forestry Industry Total + line 2. methodology 2)

640,426 1,452,680 2,602,316 4,695,422

Source: Various sources compiled by Pöyry Silviconsult (2011).1 Includes reconstituted panels (MDP, MDF, Hardboard and OSB) and solid wood products (plywood, lumber and PMVA).

It is noteworthy that the estimated number of job posts (direct, indirect and income‑effect) through the calculation methods described above, indicate that the number of job posts generated by the planted forest sector varies from 4.6 million to 5.2 million total job posts, respectively for Totals 2 and 1. For the ABRAF Yearbook 2011 – Base Year 2010 the total estimated by methodology 2 (Forestry – methodology 2 and Total 2) was adopted, since it reflects the scenario considered most likely for the planted forests segment.


Methodology notes5CHAPTER5.9 FIRJAN INDEX OF MUNICIPAL DEVELOPMENT (IFDM)

The FIRJAN Index of Municipal Development (IFDM) is an indicator of the levels of human, economic and social development of a municipality, having: an annual basis, municipal cutting and national coverage. As it uses only official statistics, it has a lag of three years of the date of its publication.

It addresses key areas of human development called Employment & Income, Education and Health. The parameters considered in the category “Employment & Income” refer to the generation and stockpile of formal job posts and the average wage level. Similarly, Education is analyzed in terms of enrollment rate in early childhood education, the dropout rate and the rate of age‑grade distortion, as well as the percentage of teachers in higher education, the average of daily teaching hours and the result of the Basic Education Development Index (IDEB). The Health item is verified by the number of prenatal visits and the number of infant deaths from preventable or poorly‑defined causes.

The mathematical analysis of these parameters enables the elaboration of a final index that varies between 0 and 1, which thus classifies municipalities into low developmental stage (0 < IFDM < 0.4), regular development (0.4 < IFDM < 0.6), moderate development (0.6 < IFDM < 0.8) and high stage of development (0.8 < IFDM < 1.0).

CD DESIGN, EDITION AND BURNING:

Dream Pictures

GRAPHIC DESIGN:

Semear Editora Gráfica Ltda.SIG Quadra 8 Lote 2.318‑C70610‑480 – Brasília‑DFFone/Fax: (61) 3344‑2400/3341‑[email protected]@gmail.com

RESPONSIBLE:

Pöyry Silviconsult Engenharia S/S Ltda.Rua General Carneiro, 904 – Alto da Glória80060‑150 – Curitiba‑PRFone/Fax: (41) 3252‑7665www.silviconsult.com.brwww.poyry.com.br

Date post:	15-Sep-2019
Category:	Documents
Upload:	others
View:	1 times
Download:	0 times

Supervision - Site · Preparation Pöyry Silviconsult Engenharia Ltda. Supervision ABRAF Technical...

Documents