Rodrigo Marchi, Managing Director for the Americas at Suzano, framed his presentation around a central commercial argument: that eucalyptus-based hardwood pulp has moved well beyond its historical role as a cost-reduction tool and is now a performance fibre capable of helping customers compete on product quality. The presentation drew on Suzano’s experience working across tissue, packaging, and printing and writing grades, with a particular focus on substitution opportunities, the structural shift away from softwood, and what Marchi described as a deintegration strategy that is reshaping how some mills approach their fibre furnish.

Marchi opened with the demand picture for hardwood pulp, noting the sustained growth trajectory that has characterized the segment over the past two decades, driven primarily by China. He acknowledged the capacity additions coming from large Latin American mills but argued that demand has consistently kept pace, maintaining operating rates at healthy levels. Looking ahead, his projections show bleached hardwood kraft pulp demand declining from approximately 44 million tonnes in 2025 to around 41 million tonnes in the near term, before returning to growth out to 2029 and 2030. He attributed the near-term dip primarily to potential mill closures and the verticalization trend in China, where mills are bringing pulping capacity in-house and reducing their dependence on market pulp imports — a structural consideration for market pulp suppliers that he said is distinct from any cyclical demand weakness. Beyond that period, the longer-term outlook for hardwood demand remained constructive in his view.

The structural shift away from softwood toward eucalyptus was a thread running through much of the presentation. Marchi argued that what began as a cost-driven substitution has become increasingly performance-driven, with eucalyptus fibre able to meet functional requirements that previously anchored softwood’s position in certain grades. He positioned this as a fundamental reordering of fibre economics across tissue, packaging, and printing and writing — with softwood increasingly confined to applications where its specific physical properties remain genuinely irreplaceable.

The performance case for eucalyptus across those grade categories formed the core of his presentation. In tissue, the substitution case is well established and continuing to advance. Marchi was specific about the mechanism: eucalyptus fibre dimensions and formation characteristics interact with tissue machine performance in ways that deliver softness and absorbency at lower softwood content, allowing customers to reformulate their furnish without sacrificing the end-product properties their own customers expect. In packaging, the argument is increasingly about strength and formation at lighter basis weights, allowing customers to run more efficiently and reduce fibre costs without compromising structural performance. In printing and writing, Marchi pushed back on an assumption he said is sometimes made that the substitution avenue has been largely exhausted. Eucalyptus fibre’s formation characteristics support print quality in ways that have allowed customers to increase hardwood content in their furnish while maintaining or improving sheet performance, and he said meaningful opportunity remains in that segment.

The customer economics argument went beyond simple fibre cost reduction. Marchi made the case that performance improvements and cost savings are increasingly being captured together, changing how customers approach furnish decisions. He cited work where eucalyptus-based furnish optimization delivered savings of close to $10 per tonne alongside measurable improvements in product properties — an outcome he characterized as central to Suzano’s commercial positioning of eucalyptus as a value-added fibre rather than purely a cost input.

Marchi also devoted significant attention to what he called the deintegration project — an approach in which mills that have historically been integrated with paper machines are separating those operations, creating opportunities for market pulp suppliers to fill the fibre gap. He described this as a structural trend driven by the economics of running large, efficient pulp mills in low fibre cost regions versus maintaining older, smaller integrated operations in higher-cost markets. Central to making deintegration work for customers, he said, is technical service — Suzano embeds its technical teams directly in customer operations to support furnish optimization through the transition, working through the process adjustments that come with shifting from internally produced pulp to market supply. That hands-on customer engagement, he suggested, is as important to the commercial model as the fibre itself. Marchi noted the deintegration dynamic is visible across tissue, packaging, and printing and writing.

On Suzano’s differentiated grade development, Marchi highlighted work producing fibre engineered for specific end-use performance requirements rather than standard commodity specification, with measurable results in both cost and performance for customers. Production of these grades is currently centred at one mill in Peratriz in northern Brazil, with expansion to a second and potentially third mill underway.

In the Q&A, Kevin Mason asked about the driver of the projected decline in bleached hardwood kraft demand shown in Marchi’s forward outlook. Marchi attributed it primarily to potential mill closures and the verticalization trend in China rather than to economic weakness or demand destruction. Mason followed with a question on whether Suzano’s specialty and differentiated grades can be produced across its mill network or are concentrated at specific facilities — Marchi confirmed production is currently at Peratriz, with expansion underway. On substitution opportunity remaining in printing and writing grades, Marchi was clear that room exists, both through direct fibre substitution and through the deintegration pathway, alongside tissue and packaging where he sees the largest near-term potential.

Drafted with the assistance of digital tools to streamline the process.