We expect the company to make important achievements in 2014, when we hope to see the continuous expansion of our perating margins in Brazil

[G4 – 1]

All in all, 2013 was a year of excellent results and significant achievements for International Paper Latin America, allowing us to continue growing in the coming years.

Despite the unfavorable macroeconomic scenario, some of our indicators posted an improvement. We were able to advance in an environment marked by setbacks, including the weak performance of the export market, which was particularly poor in terms of pricing policy due to fiercer competition. On the other hand, we increased our market share in Latin America, particularly in Brazil, where we need to continue expanding our margins in relation to the rest of the world. We are therefore extremely confident in Brazil’s potential as a platform for growing our business.

In 2013, International Paper posted record gains of 30% with one of the highest margins in the global paper industry. This growth has solidified our operating performance and strengthened our balance sheet.

Another milestone was the operational start-up of Orsa International Paper Embalagens, which arose from our joint venture with Jari Celulose Papel e Embalagens, an Orsa Group company, in which we initially held an interest of 75% and which increased to 100% in March 2014 when we acquired the remaining 25%. This transaction enabled us to enter the packaging segment as one of Brazil’s leading corrugated cardboard box manufacturers.

We would never have been able to achieve this position without respecting the safety of our workers, which to us is more than a priority or a goal – it is one of our key values and an integral part of all our activities. In 2013, we recorded good results in relation to international parameters from our initiatives to implement the LIFE and Safety Management System programs, although we have still not achieved our main objective of a zero accident rate.

Sustainability is part of IP’s essence and throughout 2013 we reported further progress in regard to compliance with the Organization’s global targets, including a substantial reduction in gas emissions.

Through a 13% increase in our investments in the International Paper Institute, we were able to develop a volunteer project for the São Paulo offices, called Guardiões em Ação (Guardians in Action). We also continued with other ongoing initiatives, directly benefiting more than 28,000 people and involving 496 volunteers.

In 2014, we will continue to pursue progress, striving to further expand our margins in the Brazilian market, which has exponential annual growth potential, giving it a major competitive role in the Organization’s business. In relation to improving operations and manufacturing costs, we have established certain targets for the coming year totaling approximately US$17 million. Although our factories have some of IP’s lowest production costs, each year we can find new opportunities for improvement and the consequent expansion of results, all of which would not be possible without the dedication of our employees, whom I would like to thank for all their efforts throughout 2013.

Underpinned by safety, commitment and a focus on sustainability, I am confident in our ability to record further advances, achieving our targets through our operational excellence and combined expertise.

Details of the year’s highlights, as well as other matters of extreme importance to our operations, can be found in this sustainability report, the fourth we have prepared in accordance with Global Reporting Initiative (GRI) guidelines, and the first based on the G4 version.

I would like to extend our gratitude to the entire IP team and our clients and partners for another year marked by trust and respect.

Enjoy your reading!

Glenn Landau
CEO of International Paper Latin America