17 de agosto de 2016 / 2:52 / en un año

Family control stands in way of Brazil pulp M&A, executives say

SAO PAULO, Aug 16 (Reuters) - The family ownership structure of Brazilian pulp and paper firms stands in the way of a potential wave of sector consolidation, industry executives said, as owners resist sharing control, curbing Brazil’s chances to add to its global pricing muscle.

Speculation has mounted for years in the world’s most competitive producer of the commodity that the families controlling Brazil’s largest firms in the sector would use mergers and acquisitions to grow globally and boost their price-setting ability.

However, executives said at an industry event in São Paulo on Tuesday that the family-owned enterprise model on which the sector relies has hampered consolidation prospects - and may continue to do so pending generational change.

“The owners of these companies have a culture of maintaining full control of their business,” said Marcelo Castelli, chief executive officer of Fibria, the world’s largest producer of eucalyptus pulp. “This culture only stands to change with the new generations.”

Fibria itself was founded in 2009 after the families owning VCP SA and Aracruz Celulose SA had to combine their firms in the wake of failed currency bets that almost bankrupted them.

Family control also prevails among the very fragmented Brazilian paper industry, said Fabio Schvartsman, CEO of Klabin SA, the largest Latin American paper maker.

In his view, industry consolidation would be favorable for players “as long as conditions are there to guarantee that any M&A transaction create value,” he said. (Writing and additional reporting by Guillermo Parra-Bernal; Editing by Kenneth Maxwell)

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