Obbligazione Fibria Global Finance Ltd 5.5% ( US31572UAF30 ) in USD

Fibria Global Finance Ltd

100 USD ▼

Brasile

US31572UAF30 ( in USD )

5.5% per anno ( pagato 2 volte l'anno)

16/01/2027

Prospetto opuscolo dell'obbligazione Fibria Overseas Finance Ltd US31572UAF30 en USD 5.5%, scadenza 16/01/2027

2 000 USD

700 000 000 USD

31572UAF3

BBB- ( Lower medium grade - Investment-grade )

N/A

17/01/2026 ( In 179 giorni )

Fibria Overseas Finance Ltd è una società di finanziamento offshore, sussidiaria di Fibria Celulose, attiva principalmente nel mercato dei capitali internazionali per supportare le operazioni della casa madre nel settore della cellulosa.

The Obbligazione issued by Fibria Global Finance Ltd ( Brazil ) , in USD, with the ISIN code US31572UAF30, pays a coupon of 5.5% per year.
The coupons are paid 2 times per year and the Obbligazione maturity is 16/01/2027
The Obbligazione issued by Fibria Global Finance Ltd ( Brazil ) , in USD, with the ISIN code US31572UAF30, was rated BBB- ( Lower medium grade - Investment-grade ) by Standard & Poor's ( S&P ) credit rating agency.

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TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS
TABLE OF CONTENTS 3
Table of Contents
CALCULATION OF REGISTRATION FEE

Proposed Maximum
Proposed Maximum
Title of Each Class of
Amount to be
Offering Price
Aggregate
Amount of
Securities to be Registered

Registered

Per Note

Offering Price

Registration Fee

5.500% notes due 2027 U.S.$700,000,000
98.491%
U.S.$689,437,000 U.S.$79,905.75(1)

Guarantee

(2)

(2)

(2)

(2)

(1)
The registration fee is calculated in accordance with Rule 457(r) of the Securities Act of 1933.
(2)
Guarantee of Fibria Celulose S.A. of the 5.500% notes due 2027 of Fibria Overseas Finance Ltd. No separate consideration will be received for the
guarantees. Pursuant to Rule 457(n) under the Securities Act, no separate fee is payable with respect to the guarantees.
Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-195610
333-195610-01
Prospectus Supplement
(To Prospectus dated May 1, 2014)
U.S.$700,000,000
Fibria Overseas Finance Ltd.
(incorporated with limited liability in the Cayman Islands)
5.500% Notes due 2027
fully, unconditionally and irrevocably guaranteed by
Fibria Celulose S.A.
(incorporated in the Federative Republic of Brazil)
Fibria Overseas Finance Ltd., or the issuer, is offering U.S.$700,000,000 in aggregate principal amount of its notes due January 17, 2027, or the notes. The
issuer is a Cayman Islands exempted company. The notes will be fully, unconditionally and irrevocably guaranteed by Fibria Celulose S.A., or Fibria Celulose, a
corporation (sociedade anônima) incorporated under the laws of the Federative Republic of Brazil.
Interest on the notes will be payable semi-annually in arrears on January 17 and July 17 of each year, beginning on July 17, 2017.
The issuer or Fibria Celulose may, at its option, redeem the notes, in whole or in part, at any time, by paying the greater of (i) 100% of the principal amount
of the notes plus accrued interest to the date of redemption and (ii) the applicable "make-whole" amount. The notes may also be redeemed, in whole but not in
part, at 100% of their principal amount plus accrued interest at any time upon the occurrence of specified events relating to the law of a relevant taxing
jurisdiction, as set forth in this prospectus supplement. See "Description of the Notes--Redemption."
If a specified Change of Control event as described herein occurs, unless the issuer or Fibria Celulose has exercised its option to redeem the notes, Fibria
Celulose will be required to offer to purchase the notes at the price described in this prospectus supplement.
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The notes will be senior unsecured obligations of the issuer, ranking equal in right of payment with all of its other existing and future senior unsecured debt.
The guarantee will be senior unsecured obligations of Fibria Celulose, ranking equal in right of payment with all of its other existing and future senior unsecured
debt.
Investing in the notes involves risks. See "Item 3. Key Information--D. Risk Factors" on page 7 of our annual report on Form 20-F for the year
ended December 31, 2015, which is incorporated by reference in this prospectus supplement, and "Risk Factors" beginning on page S-24 of this
prospectus supplement to read the discussion of material risks you should consider before investing in the notes.

Per note

Total

Public offering price(1)

98.491%
U.S.$689,437,000

Underwriting discount

0.556%
U.S.$ 3,890,000

Proceeds to us before expenses

97.935%
U.S.$685,547,000

(1)
Plus accrued interest, if any, from January 17, 2017.
Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal
offense.
We intend to apply to list the notes on the New York Stock Exchange, or the NYSE. The listing application will be subject to approval by the NYSE.
Currently there is no public market for the notes and there can be no assurance that a public market for the notes will develop.
The underwriters expect to deliver the notes to purchasers on or about January 17, 2017 in book-entry form only through the facilities of The Depository
Trust Company, or DTC, for the accounts of its direct and indirect participants, including Euroclear Bank S.A./N.V., or Euroclear, and Clearstream Banking,
société anonyme, or Clearstream, Luxembourg.
Any offer or sale of the notes in any member state of the European Economic Area which has implemented Directive 2003/71/EC (the "Prospectus
Directive") must be addressed to qualified investors (as defined in the Prospectus Directive).
Joint Book-Running Managers
BNP PARIBAS

BofA Merrill Lynch

Citigroup
HSBC
J.P. Morgan
Co-Managers
Mizuho Securities

MUFG
Natixis
Scotiabank
The date of this prospectus supplement is January 11, 2017.
Table of Contents
TABLE OF CONTENTS
Prospectus Supplement

Page
ABOUT THIS PROSPECTUS SUPPLEMENT
S-iii
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
S-iv
PRESENTATION OF FINANCIAL AND OTHER INFORMATION

S-v
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
S-vii
SUMMARY

S-1
THE OFFERING
S-16
SUMMARY FINANCIAL AND OPERATING DATA
S-19
RISK FACTORS
S-24
USE OF PROCEEDS
S-28
CAPITALIZATION
S-30
EXCHANGE RATES
S-32
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL RESULTS FOR THE NINE-MONTH PERIODS
ENDED SEPTEMBER 30, 2016 AND 2015
S-33
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DESCRIPTION OF THE NOTES
S-47
CLEARANCE AND SETTLEMENT
S-60
TAXATION
S-63
CERTAIN EMPLOYEE BENEFIT PLAN INVESTOR CONSIDERATIONS
S-69
UNDERWRITING
S-70
EXPENSES
S-78
LEGAL MATTERS
S-79
SERVICE OF PROCESS AND ENFORCEMENT OF JUDGMENTS
S-80
EXPERTS
S-82
INDEX TO FINANCIAL STATEMENTS

F-1
Prospectus

Page
ABOUT THIS PROSPECTUS

1
WHERE YOU CAN FIND MORE INFORMATION

2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

3
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

4
FIBRIA CELULOSE

5
FIBRIA FINANCE

7
USE OF PROCEEDS

8
LEGAL OWNERSHIP OF DEBT SECURITIES

9
DESCRIPTION OF THE DEBT SECURITIES

11
DESCRIPTION OF THE GUARANTEE

29
PLAN OF DISTRIBUTION

30
VALIDITY OF SECURITIES

31
EXPERTS

32
SERVICE OF PROCESS AND ENFORCEMENT OF JUDGMENTS

33
You should rely only on the information incorporated by reference or provided in this prospectus supplement and in the accompanying prospectus.
We have not, and the underwriters have not, authorized anyone to provide you with information that is different from, or additional to, that
S-i
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contained in this prospectus supplement and the accompanying prospectus. This prospectus supplement and the accompanying prospectus are an offer to
sell or to buy only the securities referred to herein and may only be used under circumstances and in jurisdictions where it is lawful to offer and sell the
notes. You should not assume that the information in this prospectus supplement or in the accompanying prospectus is accurate as of any date other
than the date on the front of those documents.
S-ii
Table of Contents
ABOUT THIS PROSPECTUS SUPPLEMENT
This document consists of two parts. The first part is this prospectus supplement, which describes the specific terms of this offering of notes by the issuer. The
second part, the accompanying prospectus, represents more general information about this offering. Generally, when we refer only to the "prospectus," we are
referring to both parts combined and when we refer to the "accompanying prospectus," we are referring to the base prospectus. If the description of this offering
varies between this prospectus supplement and the accompanying prospectus, you should rely on the information in this prospectus supplement.
We are responsible for the information contained and incorporated by reference in this prospectus supplement and in any related free writing prospectus we
prepare or authorize. The issuer and Fibria Celulose have not authorized anyone to give you any other information, and we take no responsibility for any other
information that others may give you. Neither the issuer nor Fibria Celulose is making an offer to sell the notes in any jurisdiction where the offer is not permitted.
You should not assume that the information in this prospectus supplement, the accompanying prospectus or any document incorporated by reference is accurate as
of any date other than the date of the relevant document.
The representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference in this
prospectus supplement and the accompanying prospectus were made solely for the benefit of the parties to such agreement, including, in some cases, for the
purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such
representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be
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relied on as accurately representing the current state of our affairs.
The information in this prospectus supplement is accurate as of the date on the front cover. You should not assume that the information contained in this
prospectus supplement is accurate as of any other date.
In this prospectus, unless otherwise indicated, references to:
·
"Fibria Finance" or the "issuer" means Fibria Overseas Finance Ltd.;
·
"Fibria Celulose" refers to Fibria Celulose S.A.; and
·
"Fibria," "our company," "we," "our," "ours," "us" or similar terms refer to Fibria Celulose together with its consolidated subsidiaries and jointly
controlled companies.
S-iii
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The U.S. Securities and Exchange Commission, or the SEC, allows us to "incorporate by reference" information into this prospectus supplement and the
accompanying prospectus. This means that we can disclose important information to you by referring you to another document filed by us separately with the
SEC. The information incorporated by reference is considered to be a part of this prospectus supplement and the accompanying prospectus, except for any
information superseded by information that is included directly in this prospectus supplement or incorporated by reference subsequent to the date of this prospectus
supplement.
We incorporate by reference into this prospectus supplement the following documents listed below, which we have already filed with or furnished to the
SEC:
·
our annual report on Form 20-F for the year ended December 31, 2015, filed with the SEC on February 24, 2016 (File No. 1-15018), containing
our audited consolidated financial statements as of December 31, 2015 and 2014 and for the three years ended December 31, 2015, 2014 and 2013,
which we refer to herein as our 2015 Annual Report;
·
any future annual reports on Form 20-F that we file with the SEC after the date of this prospectus supplement and prior to the termination of the
offering of the securities offered by this prospectus supplement;
·
our current report on Form 6-K furnished to the SEC on January 4, 2017 (File No. 001-15018), containing a statement regarding the computation
of our ratio of earnings to fixed charges; and
·
any future reports on Form 6-K that we submit to the SEC after the date of this prospectus supplement that are identified in such reports as being
incorporated by reference in this prospectus supplement or the accompanying prospectus.
We will provide without charge to each person to whom this prospectus supplement has been delivered, upon the written or oral request of any such person to
us, a copy of any or all of the documents referred to above that have been or may be incorporated into this prospectus by reference, including exhibits to such
documents. Requests for such copies should be directed to:
Fibria Celulose S.A.
Attn: Investor Relations Department
Rua Fidêncio Ramos, 302, Torre B, 3o andar, Vila Olímpia
04551-010, São Paulo, SP
Brazil
Telephone +55 11 2138-4565
To the extent there is a conflict between the information contained in this prospectus supplement and the accompanying prospectus or any document
incorporated by reference herein or therein, you should rely on the information in this prospectus supplement, provided that if any statement in one of these
documents is inconsistent with a statement in another document having a later date--for example, a document incorporated by reference in this prospectus
supplement--the statement in the document having the later date modifies or supersedes the earlier statement. Any statement so modified or superseded will not
be deemed, except as so modified or superseded, to constitute part of this prospectus supplement.
S-iv
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PRESENTATION OF FINANCIAL AND OTHER INFORMATION
All references herein to the "real," "reais" or "R$" are to the Brazilian real, the official currency of Brazil. All references to "U.S. dollars," "dollars" or
"U.S.$" are to United States dollars.
We maintain our books and records in reais. Our consolidated financial statements as of December 31, 2015 and December 31, 2014, and for the years ended
December 31, 2015, 2014 and 2013, which are incorporated by reference in this prospectus supplement by reference to our 2015 Annual Report, have been
prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or the IASB, and
have been audited, as stated in the report appearing in our 2015 Annual Report. Our unaudited condensed consolidated interim financial information as of
September 30, 2016 and for the three- and nine-month periods ended September 30, 2016 and 2015, which are included in this prospectus supplement have been
prepared in accordance with IAS 34--"Interim Financial Reporting," as issued by IASB, or IAS 34. The preparation of financial statements in conformity with
IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying our accounting
policies. Those areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements are disclosed in note 3 to our audited consolidated financial statements, which are incorporated by reference in this prospectus supplement by reference
to our 2015 Annual Report.
The financial information of our company included in this prospectus supplement and the accompanying prospectus should be read in conjunction with, and is
qualified in its entirety by, our (1) audited consolidated financial statements and "Item 5. Operating and Financial Review and Prospects" included in our 2015
Annual Report, (2) our unaudited condensed consolidated interim financial information included in this prospectus supplement and (3) the "Management's
Discussion and Analysis of Financial Results for the Nine-Month Periods Ended September 30, 2016 and 2015" section in this prospectus supplement.
Special Note Regarding Non-GAAP Financial Measures
The body of generally accepted accounting principles is commonly referred to as GAAP. For this purpose, a non-GAAP financial measure is generally
defined by the U.S. Securities and Exchange Commission, or the SEC, as one that purports to measure historical or future financial performance, financial position
or cash flows but excludes or includes amounts that would not be so adjusted in the most comparable U.S. GAAP measure. To be consistent with industry
practice, we may disclose so-called non-GAAP financial measures which are not recognized under IFRS or U.S. GAAP, including "EBITDA," "adjusted
EBITDA" or "net indebtedness." However, these non-GAAP items do not have standardized meanings and may not be directly comparable to similarly-titled
items adopted by other companies. Potential investors should not rely on information not recognized under IFRS or U.S. GAAP as a substitute for the GAAP
measures of earnings or liquidity in making an investment decision. We calculate EBITDA as net income (loss) plus/less financial (income) expenses, net, income
taxes and depreciation, depletion and amortization. We calculate adjusted EBITDA as EBITDA plus/less equity, fair value of biological assets, loss (gain) on
disposal of property, plant and equipment, accrual for losses on ICMS credits and tax credits/reversal of provision for contingencies. See "Summary Financial and
Operating Data" for a reconciliation of our EBITDA and adjusted EBITDA to net income. We define net indebtedness as current and non-current loans less cash
and cash equivalents, marketable securities and net derivatives (assets less liabilities). Our determination of EBITDA, adjusted EBITDA or net indebtedness does
not purport to be compliant with SEC or CVM regulations.
Our management believes that disclosure of EBITDA, adjusted EBITDA and net indebtedness provides useful information to investors, financial analysts and
the public in their review of our
S-v
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operating performance and their comparison of our operating performance to the operating performance of other companies in the same industry and other
industries.
Exchange Rates
Solely for your convenience, we have translated certain amounts included in this prospectus supplement from reais into U.S. dollars using the selling rate as
reported by the Central Bank as of September 30, 2016 of R$3.2462 to U.S.$1.00. These translations should not be considered representations that any such
amounts have been, could have been or could be converted into U.S. dollars at that or at any other exchange rate as of that or any other date.
Furthermore, the documents that are incorporated by reference herein may have translated certain amounts from reais into U.S. dollars using different rates
that may materially differ from the selling rate that was reported by the Central Bank as of September 30, 2016.
Market Information
We make statements in this prospectus supplement and the accompanying prospectus about our competitive position and market share in, and the market size
of, the pulp and paper industry. We have made these statements on the basis of statistics and other information from third-party sources that we believe are
reliable. We derive this third-party information principally from reports published by Resource Information Systems Inc., or RISI, the Pulp and the Paper Product
Council, or the PPPC, and Hawkins Wright, which are specialized consultants in the pulp market. Although we have no reason to believe that any of this
information or these reports are inaccurate in any material respect, we have not independently verified the competitive position, market share, market size or
market growth data provided by third parties or by industry or general publications.
Rounding and Other Information
Some percentages and certain figures included in this prospectus supplement have been subject to rounding adjustments. Accordingly, figures shown as totals
in certain tables in this prospectus supplement may not be an arithmetic aggregation of the figures that precede them.
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As used in this prospectus supplement:
·
"installed capacity" means the annual projected capacity for a particular facility (excluding the portion that is not attributable to our participation in
a facility owned by a joint venture), calculated assuming operations for 24 hours each day of a year and deducting scheduled downtime for regular
maintenance;
·
"ton" means a metric ton, which is equal to 1,000 kilograms or 2,204.62 pounds;
·
one "hectare" equals approximately 2.471 acres;
·
references to "Brazil" are to the Federative Republic of Brazil;
·
the term "Brazilian Corporations Law" refers to Law No. 6,404, of December 15, 1976, as amended; and
·
the phrase "Brazilian government" refers to the federal government of Brazil.
S-vi
Table of Contents
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus contain forward-looking statements related to our plans, expectations regarding future events,
business strategies and prospects that are subject to risks and uncertainties. These forward-looking statements are set forth under "Item 3. Key Information--D.
Risk Factors," "Item 4. Information on Fibria" and "Item 5. Operating and Financial Review and Prospects" in our 2015 Annual Report, which is incorporated by
reference into this prospectus supplement and the accompanying prospectus. Some of the matters discussed concerning our business operations and financial
performance include forward-looking statements within the meaning of the U.S. Securities Act of 1933, as amended, or the Securities Act, and the U.S. Securities
Exchange Act of 1934, as amended, or the Exchange Act.
We have based these forward-looking statements largely on our current expectations and estimates about future events and financial trends, which affect or
may affect our business and results of operations. Although we believe that these forward-looking statements are based upon reasonable assumptions, these
statements are subject to several risks and uncertainties and are made in light of information currently available to us. It is possible that our future performance
may differ materially from our current assessments due to a number of factors, including the following:
·
our direction and future operation;
·
the implementation of our principal operating strategies, including our potential participation in acquisition or joint venture transactions or other
investment opportunities;
·
general economic, political and business conditions, both in Brazil and in our principal export markets;
·
industry trends and the general level of demand for, and change in the market prices of, our products;
·
existing and future governmental regulation, including tax, labor, pension and environmental laws and regulations and import tariffs in Brazil and
in other markets in which we operate or to which we export our products;
·
the competitive nature of the industry in which we operate;
·
our level of capitalization, including the levels of our indebtedness and overall leverage;
·
the cost and availability of financing;
·
our compliance with the covenants contained in the instruments governing our indebtedness;
·
the implementation of our financing strategy and capital expenditure plans;
·
interest rate fluctuations, inflation and fluctuations in currency exchange rates, including the real and the U.S. dollar;
·
legal and administrative proceedings to which we are or may become a party;
·
the volatility of the prices of the raw materials we sell or purchase to use in our business;
·
the receipt of governmental approvals and licenses;
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·
the cost and availability of adequate insurance coverage;
·
other statements included or incorporated in this prospectus supplement and the accompanying prospectus that are not historical; and
·
risk factors discussed herein under "Risk Factors" and also under "Item 3. Key Information--D. Risk Factors" of our 2015 Annual Report, which is
incorporated by reference herein.
S-vii
Table of Contents
The words "believe," "may," "could," "will," "should," "would," "estimate," "continue," "plan," "anticipate," "intend," "expect" and similar words are intended
to identify estimates and forward-looking statements. Estimates and forward-looking statements speak only as of the date they were made, and we undertake no
obligation to update or to review any estimate and/or forward-looking statement because of new information, future events or other factors. Estimates and
forward-looking statements involve risks and uncertainties and are not guarantees of future performance. Our future results may differ materially from those
expressed in these estimates and forward-looking statements. In light of the risks and uncertainties described above, the estimates and forward-looking statements
discussed in this prospectus supplement and the accompanying prospectus might not occur and our future results and our performance may differ materially from
those expressed in these forward-looking statements due to, inclusive of, but not limited to, the factors mentioned above. As a result of these risks and
uncertainties, investors should not base their decisions to invest in this offering on these estimates or forward-looking statements.
S-viii
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SUMMARY
This summary highlights selected information about us and the notes that we are offering. It may not contain all of the information that may be important to
you. Before investing in the notes, you should read this entire prospectus supplement, the accompanying prospectus and the documents incorporated by reference
carefully for a more complete understanding of our business and this offering, including our consolidated financial statements and the related notes incorporated
by reference into this prospectus supplement, and the sections entitled "Risk Factors" included elsewhere or incorporated by reference in this prospectus
supplement.
Overview
We are the world's largest producer of market pulp, according to the independent consulting firm Hawkins Wright and the PPPC, with an annual aggregate
pulp production capacity of 5.3 million tons. This represented 22% of the world demand for bleached eucalyptus kraft market pulp, or BEKP, in 2015, according
to the PPPC.
We believe that our BEKP production costs are among the lowest in the world. During the nine-month period ended September 30, 2016, our pulp cash
production cost per ton, including logistics, was 11% less than the average in Brazil, the most competitive market for BEKP, and in the year ended December 31,
2015, it was 2% less than the average in Brazil, according to Hawkins Wright. We believe that this important competitive advantage is principally due to: (1) our
economies of scale; (2) advanced forestry techniques in managing the planting, maintenance and harvesting of our forests; (3) modern industrial plants using
state-of-the-art technology; (4) the comparatively short harvest cycle of our trees; and (5) the relative low cost of our raw materials, including electricity and
chemicals.
We produce BEKP in three pulp mills, which are located in the States of Espírito Santo, Mato Grosso do Sul and São Paulo. In addition, we have a 50%
interest in Veracel Celulose S.A., or Veracel, a joint venture with the Swedish-Finnish company Stora Enso OYJ, or Stora Enso, which operates a pulp mill in the
State of Bahia. The following table presents information with respect to our pulp mills and their production for the periods indicated:

Production

For the nine-month periods

Annual

ended September 30,

For the years ended December 31,

Production
Unit

Location

Capacity

2016

2015

2015

2014

2013

(in thousands of tons)

Aracruz
Espírito Santo

2,340
1,660
1,728
2,328
2,356
2,346
Três Lagoas
Mato Grosso do Sul
1,300
970
929
1,248
1,276
1,272
Jacareí
São Paulo

1,100
767
817
1,047
1,085
1,080
Veracel(1)
Bahia

560
405
415
562
557
561
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
Total

5,300
3,802
3,889
5,185
5,274
5,259
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
? ?
?
? ?
?
? ?
?
? ?
?
? ?
?
? ?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
?
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(1)
Represents 50% of the production capacity of Veracel for the periods indicated.
Our forestry base is broad and diversified. We have certified quality, environmental, occupational health and safety and forest management systems, and all of
our units have been certified by the Forest Stewardship Council® (FSC®), or the FSC, License Code FSC-C104120, and the Brazilian Forest Certification
Programme (Cerflor) of the Programme for the Endorsement of Forest Certification (PEFC). The FSC is not responsible for and does not endorse any financial
claims on returns on investments. As of December 31, 2015, our forestry base was comprised of approximately 969,000 hectares (owned or leased) located in
seven Brazilian states, which does not account for areas covered by the forestry partnership programs (pursuant to which we support the seedling, our partners
S-1
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are responsible for the management of the forest, and we purchase the wood at the end of the harvesting cycle) and any forest base linked to the sale of forest
assets (which are partnerships with respect to land located in the southern portion of the State of Bahia and the City of Losango, in the State of Rio Grande do Sul).
Approximately 568,000 hectares of our total forestry land consisted of planted areas, approximately 338,000 hectares of conservation areas with native vegetation,
or preserved areas, and 63,000 hectares related to other uses such as roads.
We are the controlling shareholder of Portocel Terminal Especializado de Barra do Riacho S.A., or Portocel, in which we hold a 51% interest. Portocel
operates a specialized terminal of Barra do Riacho, located three kilometers from our Aracruz mill in the State of Espírito Santo, and it is a port from which we
export a portion of our cellulose production.
The export market is the principal destination for our production; our export sales volume accounted for 90% of our total BEKP sale volumes during the
nine-month period ended September 30, 2016 and in the year ended December 31, 2015. During the nine-month period ended September 30, 2016, 39% of our
revenues came from sales in Europe, 30% from sales in Asia, 20% from sales in North America and the remaining 11% came from sales in Latin America
(including Brazil), as compared to 43%, 25%, 23% and 9%, respectively, in the corresponding period in 2015. In the year ended December 31, 2015, 43% of our
revenues came from sales in Europe, 25% from sales in North America, 24% from sales in Asia and the remaining 8% came from sales in Latin America
(including Brazil).
Our strategy is to concentrate our sales in the markets for tissue paper and specialized papers, which generally present less volatility compared to the markets
for printing and writing papers. In 2015, approximately 50% of the BEKP volume we sold was used by our customers to produce tissue paper, approximately 36%
to produce printing and writing paper and approximately 15% to produce specialized papers. In the nine-month period ended September 30, 2016, in terms of
sales volume, the tissue segment corresponded to 49% of Fibria's sales during the period, printing and writing papers corresponded to 32% and specialty papers
corresponded to 19% of Fibria's sales during the period.
The table below presents some of our principal financial indicators as of and for the indicated periods:
As of and For the Nine-Month
As of and For the Years Ended

Periods Ended September 30,

December 31,

2016

2015

2015

2014

2013

(in thousands of reais, except percentages)

Net revenues

7,081,010
7,096,052
10,080,667 7,083,603 6,917,406
Net income (loss)

1,755,134
(552,999)
356,985
162,552 (697,582)
Net margin(1)

24.8%
(7.8)%
3.5%
2.3%
(10.1)%
Total indebtedness

14,192,339
12,526,264
12,743,832 8,326,519 9,773,097
Current loans and financings

1,509,772
1,077,006

1,072,877
965,389 2,972,361
Non-current loans and financings

12,682,567
11,449,258
11,670,955 7,361,130 6,800,736
Cash and cash equivalents, marketable
securities and derivatives

3,572,295
2,948,356

1,729,696
777,773 1,923,791
Net indebtedness(2)

10,620,044
9,577,908
11,014,136 7,548,746 7,849,306
(1)
Net margin is net income (loss) divided by net revenues.
(2)
Net indebtedness consists of current and non-current loans and financing less cash and cash equivalents, marketable securities and net
derivatives (assets less liabilities). Net indebtedness is a non-IFRS measure which we disclose from time to time. Net indebtedness as
described in this
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prospectus supplement is not a substitute for IFRS measures of indebtedness. For additional information, including the calculation of our
net indebtedness, see "Summary Financial and Operating Data."
Our joint-controlling shareholders are Votorantim S.A., and BNDES Participações S.A., or BNDESPar, which are also our largest shareholders and together
hold 58.5% of our total voting capital. Votorantim S.A. is a holding company for industrial assets of the Votorantim Group, one of the largest private
conglomerates in Brazil, and BNDESPar, an investment arm of the Brazilian National Bank for Economic and Social Development (Banco Nacional de
Desenvolvimento Econômico e Social), or BNDES, invests in various segments of the Brazilian economy. Votorantim S.A. and BNDESPar have entered into a
shareholders' agreement with respect to their interests in our company. For more information regarding this shareholders' agreement, see "Item 10. Additional
Information--C. Material Contracts--Shareholders' Agreement of Fibria" in our 2015 Annual Report. We believe that the support of our largest shareholders, in
conjunction with our differentiated practices and transparent corporate governance, will continue to contribute to our good reputation and consolidate our position
as a global business leader in the pulp market.
Our Strengths
Global Leadership in Market Pulp
We are the world's largest producer of market pulp in terms of production capacity, according to Hawkins Wright and the PPPC, with an annual aggregate
pulp production capacity as of September 30, 2016 of 5.3 million tons and a focus on international markets. Based on information from the PPPC, we estimate that
during 2015 we supplied 22% of the world demand for BEKP, 17% of the world demand for bleached hardwood kraft market pulp and 9% of the world demand
for chemical market pulp.
We believe that our market leadership is based on the sustainability of our forest operations (reinforced by the shorter harvest cycle in Brazil as compared to
other relevant countries), state-of-the-art technology (including modern facilities and advanced cloning methods), high productivity, strong customer base and
long-term relationships with our customers.
Low Production Costs
Our efficiently structured operations in Brazil result in relatively low cash production costs. We believe that we are one of the lowest-cost producers of BEKP
in the world. Our low production costs relative to many of our competitors are due to a number of factors, including:
·
significant economies of scale;
·
advanced forestry techniques in managing the planting, maintenance and harvesting of our forests;
·
modern industrial plants using state-of-the-art technology;
·
comparatively short harvest cycle of our trees; and
·
relatively low-cost raw materials, including electricity and chemicals.
Climate and soil conditions in Brazil enable us to harvest our eucalyptus trees in an average of approximately six years after planting, while harvesting cycles
of other forest species in the southern United States, Canada and Scandinavia can last from 25 to 70 years. Harvesting cycles of our primary non-Brazilian
competitors in the BEKP market located in Spain, Portugal and Chile are 8 to 10 years.
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Modern Production Facilities
We have made significant investments in the adoption of modern designs, technologies and production processes available in our industry. The advanced
technology and production processes utilized by our pulp mills allow us to utilize a relatively small amount of raw materials, especially chemical substances,
which consequently reduces our production costs. In addition, our pulp mills have advantages over our competitors' older mills, principally in terms of reduced
emissions and solid wastes, resulting in production processes that are more optimized, efficient and environmentally viable. The Três Lagoas and Veracel pulp
mills, two of the largest single-line pulp production facilities in the world, also have per-ton pulp production costs that are among the lowest in the world as a
result of their state-of-the-art technology, including modern processes and equipment associated with forestry efficiency, as well as their close proximity to our
forests.
The Horizonte 2 Project, consisting of the construction of a new line of pulp production in Três Lagoas, in the State of Mato Grosso do Sul, is expected to
start up in the beginning of the fourth quarter of 2017 and is also designed to have modern and efficient process technologies for both pulp production and
pollution control.
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State-of-the-Art Research and Technology
We began planting eucalyptus at the end of the 1960s, using seeds from the Rio Claro Forest Nursery, in the State of São Paulo. At that time, four species
were considered: Eucalyptus grandis, Eucalyptus saligna, Eucalyptus urophylla and Eucalyptus alba. During the 1970s, specific varieties of E. grandis and E.
urophylla proved to be the most suited to our environmental conditions and to the pulping process. However, since then, many trees of superior quality have been
developed as a result of our breeding program and commercial cloning, confirming that cloned forests result in significant gains in productivity, uniformity and
quality of wood.
We use a group of select clones in our forests. These clones are frequently substituted to ensure greater genetic variety. We use state-of-the-art breeding
technologies in the development of advanced generations of eucalyptus clones. These techniques involve selecting the best performing plants and the crossing
among them for successive generations. Furthermore, we are continually working on alternative silviculture methods to increase productivity in our forests.
The combination of silviculture and genetic improvement is essential for maintaining sustainable production and the long-term health of these ecosystems,
particularly in light of the challenges arising from climactic and economic uncertainties. The development of appropriate genotypes together with improvements
arising from our silviculture practices for the efficient use of resources in these forests, are necessary for sustaining the environmental services of these forests for
future generations. As a result of our continuous progress, the current planted area that we use to supply our pulp mills is half the area that would have been
necessary 40 years ago, when forest productivity levels were much lower.
Product development has also provided important advances by both designing new functionalities and testing an innovative process setup on an industrial
scale to meet the demands of the paper industry. These demands include not only improvements in the paper-making process and products, but also the
replacement of more expensive fibers. The progress we have made allows us to offer exclusive products to our customers, despite operating in a commodity
market. Biorefinery is also an important item in our project portfolio. Our updated roadmap on biorefinery, along with the establishment of strategic alliances, is
paving the way for faster research and development of bioproducts and/or biofuels. Our ongoing projects and alliances envision different and more promising
alternatives, not only making use of forest biomass in nature, but also from the circling streams of the kraft process, such as those from lignin.
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Integrated Operations
Our operations are vertically integrated, from production of eucalyptus seedlings in nurseries for our extensive forests, through plantation and forestry
management (including harvesting, logging and wood transportation) to our production facilities, from which our products are transported to port terminals we
operate for distribution to our clients.
We believe that our transportation and logistics activities are efficient and diversified. The strategic location of our facilities and their proximity to our forests
allows us to have low transportation costs for wood delivered to our production facilities and for finished products delivered to port terminals for export. The
average distance from our forests to our mills is less than that of many of our domestic and international competitors, resulting in logistical efficiencies (for
example, certain of our competitors in China meet their raw material needs with wood they import from Russia).
Portocel, the port terminal we operate in the State of Espírito Santo, is located approximately three kilometers from our Aracruz pulp mill. This allows us to
efficiently export pulp produced at our Aracruz pulp mill and to receive and export pulp from the Veracel facility. In addition, we export pulp and paper products
from a terminal and warehouse that we operate at the port of Santos, in the State of São Paulo.
Strong Customer Base
We have long-term relationships with leading global paper manufacturers, particularly in the tissue segment. As of September 30, 2016 and December 31,
2015, most of our sales were made under contracts, some of which contain exclusivity provisions. We have traditionally focused on tissue and specialty paper
producers that value the high-quality pulp we produce and the reliability of supply that we provide. Some of those producers have been our customers since our
inception.
Conducting Our Operations in a Sustainable Way
We are committed to operating our businesses and resources in a sustainable manner in accordance with world-class sustainability standards. In 2016, we
were included in the 2016/2017 portfolios of the Dow Jones Sustainability Indices, or DJSI, for global and emerging markets, which include a selection of
companies with the best corporate sustainability practices in the world (DJSI World) and in the emerging markets (DJSI Emerging Markets). We have been
recognized by both DJSI World and DJSI Emerging Markets as a leading forestry and pulp producer company. Since 2005, we have also been listed in the
Corporate Sustainability Index (ISE)--a list of companies whose shares are traded on the Brazilian Stock Exchange (BM&FBOVESPA S.A.--Bolsa de Valores,
Mercadorias e Futuros), or the BM&FBOVESPA, that maintain an elevated commitment to improved practices in the areas of sustainability and corporate
governance.
We believe sustainability is an essential component of our corporate strategy and have implemented corporate governance practices and a sustainability
policy, which seek to align and implement our sustainability strategy into our business model. We have a sustainability committee that advises our board of
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