Suzano + Pulp and Paper Primer Annex
This Annex for the Suzano + Pulp and Paper Primer contains additional information valuable for readers who want to double-click on specific factors in the cycle and accounting. It is also the first published Annex exclusively for Premier Subscribers.
Quipus Capital has always strived to maintain a high-quality standard, with long, in-depth, well-rounded articles, while at the same time keeping them within manageable lengths. This will remain the same for all current subscribers of the blog.
However, I have also noticed that a subset of the readers may benefit from longer explanations on specific factors from the accounting or the market analysis. This kind of analysis is relevant only for some readers who want to research and carry out due diligence at a deeper level.
Because obtaining and compiling this data takes a long time, and because it is not relevant to all readers, I have decided to separate this kind of information into an additional tier.
In this way, I believe, everyone can still make use of the bulk of the information at a reasonable cost, while readers requiring a more exhaustive view can have that additional step as well.
Current paid subscribers to Quipus Capital can find a discount at the end of the Suzano article.
Specifically for this Annex, on the cycle side, I cover the topic of wood availability in China at length, delving into province-level inventories. I have not seen it reviewed in such detail in other reports on the pulp cycle. I also cover the topic of wood availability in Brazil, including climate change and other risks (like land substitution). Finally, an additional analysis on the prospects of fiber-to-fiber substitution and disintegration trends in Europe and North America.
On the accounting side, I cover factors that do not really modify the arguments around Suzano from the main article, but that are relevant for understanding Suzano’s financial statements. The company’s reporting includes several complex factors, like biological assets, hedges, and currency accounting, which can make reading the statements a little more challenging. Anyone expecting to do a deeper dive into Suzano’s financials will benefit from this section.
Index
Cycle double-clicks
Chinese wood availability
Brazilian and Suzano’s wood availability
Fiber to Fiber and Disintegration trends
Pulp price reporting
Accounting miscellanea
Biological assets
Hedge accounting
BRL accounting
Adequate capital return metrics
Net debt costs
Taxes
Kimberly-Clark JV financials.