Brazil pulpmaker Fibria sees 2015 capex up 5 pct on weaker real
By Lucas Iberico Lozada
NEW YORK Dec 3 (Reuters) - Fibria, the world's largest producer of eucalyptus pulp, said it expects capital expenditures to grow 5 percent in 2015 to 1.7 billion reais ($664 million) as the company aligns its plans with an outlook for higher inflation and a weaker currency.
Fibria's increase in investment is meant to "speed up innovation, to bring more competitiveness to the company," Chief Executive Officer Marcelo Castelli said on Wednesday at an event for investors in New York.
The weakening of the Brazilian real against the dollar and a severe drought in the southeast of the country also helped drive a 6 percent increase in 2014 capital expenditures to 1.6 million reais from a previously projected 1.5 million.
Improved cash flow driven by strong demand in 2014 allowed the company to replace more expensive debt in favor of cheaper bonds, placing it within international investor grade parameters, Chief Financial Officer Guilherme Cavalcanti said at the event.
A syndicated loan to be finalized by the end of the day is expected to bring in an additional $500 million in low-interest 5-year bonds, $100 million more than what the company had originally sought from investors, Cavalcanti added.
Fibria saw pulp inventories of 50 days at the end of the third quarter 2014, Chief Commercial Officer Henri Philippe Van Keer said, a "very tight" figure not previously seen this late in the year. Fibria announced on Monday its second increase of pulp prices in three months.
($1=2.56 reais) (Reporting By Lucas Iberico Lozada; Editing by Reese Ewing and Alan Crosby)
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