Empresas CMPC S.A. (CMPC) Earnings Call Transcript & Summary

Good afternoon, everyone. For the ones that are here. Thank you again for joining us in our beautiful plant of Guaíba. It's been a long morning. We have learned about the project. And now the idea is to have a presentation of our strategy, what we have been doing in the last year. And for that, Francisco Ruiz-Tagle, CEO of the company is joining us; also Raimundo Varela, who is the CEO of the Pulp division is here. Nicolas Gordon, he is responsible for the sustainable activities for the company. Also, Jorge Valdivieso here, he is Chief of Development of the Softys division and myself will be presenting. For the ones that are joining us from the webcast, welcome all, and thank you for joining us as well. So with that, I will leave the word to Francisco. And we'll have a almost 2 hour presentation, okay? It's a long and heavy presentation. And at the end, there is to have 30 minutes for Q&A. Because the presentation is long and has a lot of information, we rather have all the questions at the end because otherwise, we will not get there with all the material and the news we have for you. So thank you and Francisco?

It's a pleasure for me to have all of you here today. Thank you very much. I believe this is a great opportunity for you to have a nice view about what is doing in CMPC, about this mill. I would say that Brazil has been a very important target for us. So it's a very nice -- it is very nice to meet all of you here today. My idea is to have a presentation of about 20 minutes. And I'd like to explain a little bit about our strategy. And then I will not go deeply in my presentation about the businesses. You will have a presentation then with my team to speak a little bit about in a deeply way about our businesses. But let us start first with the -- okay. The first slide I wanted to show you how to be with the economic value of the company. And just to mention you, for you to have an idea -- what was the place we were in the year 2018. We decided to -- in terms of economic value of the company -- start to creating value. And we -- the other dots, green dots as to -- are really a competitor of CMPC around the world. And I'm not mentioning them here. But just to show you where we were in the fifth quintile at that time. And it has a lot to be with the startup of the Guaíba mill that it was a great investment for CMPC. That it created some not very good return on the investment we had at that time. But our target is going to the other -- and just to show you that what has been happening with CMPC and now we are in the third quintile and it has a lot to be with operational excellence that we have been working on and also the result of our projects, operational continuity and of course, also with the situation that we are having now with the businesses. We have good prices in general with volumes in every of our businesses. So we are now, I would say, being successful in some way, advancing through this curve. Some achievements. Well, actually, we decided to be, as I said there, world-class in operational excellence. We started really a very strong work on the year 2017, trying to improve the OEE in every of our mill. Those are -- we have really an important amount of money invested in capital expenditure here. So it means that we need to get very good returns on that. And so we have been working really and very high standards in operational excellence. We do benchmarks every time. So we -- this is the way we are working today, closer and closer to our customers. Again, here, we have been strengthening our international offices. We have been creating some international offices. I will mention then that, this is a very important thing. Inorganic and organic growth and to be really perfect -- to get really perfect execution in our projects in this kind of industry since you have -- the investments are really important when you don't have a very good project, we don't have a very good start-up, it affected you a lot in terms of profitability. So it's very important, the execution of the project. We created a P&L division. This is corporative for all the countries. And then we have been working in placing people at the center in talent. I will mention a little bit about that at the end of the presentation. Also sustainability has been a center for us. I mean, it's a priority -- absolute priority for CMPC. We have a lot of challenges. We created goals, very concrete goals. We established years when we should be meeting those goals. So very clear on that. Innovation also, we created, again, a dedicated team and special VP of Innovation that is reporting to me, it was in year 2019. So we have been really focusing a lot of effort again in innovation. What -- some of the results of the operational excellence. Basically, here, I wanted to remark 2 things. One, the OEE and different operations, be it packaging, pulp, cellulose, Softys. And you can see that the OEE has improved in all of them, and this is something we've been working very, very hard on that. And the other thing, we want to be -- a state-of-the-art is an accident. So you see the frequency of rating accident, again, improving in any of our operations. All of our operations are improving on that. And just wanted to mention that. Some organic and inorganic growth to mention, well, that something that is very important today is here. We are adding 350,000 tons of extra pulp. It means that this mill will be close to 2.4 million tons a year -- 2.35 million tons a year. And then we also -- in this project, and this is part of -- is an essential part of the decision when we decided to go ahead with this project is the sustainability improvements we have here. We are eliminating coal boiler that is crucial for -- in the reduction of emission of CO2 from this mill. And so very well connected with the goal that we defined for the year 2030, that is to reducing 50% of our emissions of scale 1 and 2. So this is a very important advance in that and reducing -- and also the decrease in the water use of the mill. This is another very important topic for us. The water usage has been really reduced during the last year, and we will continue with that. On Niuform joint venture, we are here adding CLT, which is a special product build -- made by wood. And we decided also as a strategic definition for the company to be really involved and deeply involved in the construction -- wood construction in the future. Sack Kraft expansion, we acquired Iguaçu Celulose Papel here in Brazil. And we have mills in the state of Parana and Santa Catarina. And this is very important because we are adding capacity in pulp, paper and paper and of course, in conversion of paper sacks and so this is a very important step in the strategy of CMPC in terms of being more important in the core business, and one of them is the packaging. In M&A, Softys also has done important acquisition during the last 3 years, very important acquisitions. One is Sepac in the state of Parana, tissue mill in the town called Mallet. With that acquisition, our market share go to 20% in the year 2019. And then with the acquisition of Carta Fabril this year, probably we will be close to 28% of market share in the tissue business in Brazil. So we -- this is also very important. We decided to be an important player here. And we are now the biggest player in this industry. We also have personal care, and so now the definition here is to continue consolidating what we have done here. And again, we see some opportunities still interesting for us, but mainly concentrated in consolidation of what we have done. And in Mexico, Mabe; Mabe is a company that used to be owned by -- it is own actually by Ontex, and we defined the acquisition. We have a great acquisition with them, in a process of acquiring it with the local authorities, et cetera. But this is very important because we are a player in the tissue business in Mexico, and we do not have until now an important position in personal care and baby diapers, adult diapers, et cetera. And so with this acquisition, we are entering this market. So we now -- we have a very nice portfolio in Brazil and Mexico, where we are participating with 30% of market share in personal care, which is really important. And then we have also the tissue business. Some examples of international office. We have a very important office in Hamburg. We actually -- it was -- we acquired actually a participation of a trader that used to work for us, and we acquired this company in Hamburg. It was 2 years ago. We inaugurated that a couple of weeks ago in Europe. Because of the pandemic, we couldn't do it before. And then just to transmit you, what is important here, we have an office there really professional with more than 20 people, many -- all of the Europeans from different countries, mainly from Germany. But from there, we -- our goal is to be really much closer compared with where we have done in the past with the customers, especially with the end consumers. So in Shanghai, same thing. We have a commercial office there. And so just mentioning this because we are really in a very strong way to be closer to our markets and to better understand our markets. And I mentioned of Fiberplace, which is a digital place for trading, in this case, biopackaging. So we also have an initiative on that. So digital, closer to customers is also really part of our next steps. And what we have done now really. Innovation also, we created, as I said before, in the Innovation division in 2019, we established formally an office in Finland in Helsinki now. This is an office we are really excited about that because the office is in the Aalto University Helsinki, we have a place there. And it's a place just to create innovations, to create great new things. We have a joint venture with a company called Nordic Bioproducts that is basically concentrated in creating textile based on natural fibers. So we are now working closely with them in that sense, trying to find -- trying to actually find different uses for the pulp. Well, sustainable construction, plastic replacement, zero-waste sack, we have different, different really concrete initiatives in place. The zero-waste sacks, for instance, is already in the market, and for you to understand what is this. This is a paper sack that you -- where you put some construction material or cement, for instance. And you don't need to take out the bag when you use it. Just the bag and the cement mix and are part of the construction process and you don't need to take out the paper. So this is very interesting, especially for some buyers that don't have -- it's always hard to dispose the paper bags. And so this is very interesting. Just as an example. And with ventures, we created our CMPC ventures with a lot of initiatives. They are strong by form, biocomposites, Nordic Bioproducts, I already mentioned textile fiber. Boxia, as I said kind of digital place, partnership with several universities, some examples, with Aalto University, Universidad de Concepción, Universidad Católica in Chile and with BTT, KTH in Sweden. So we have a lot of different connections because we are really convinced about the connection with the academy here and also with the initiatives that the government has -- the government have in any of the countries where we are participating now. Digital analytics very important for us. Well, creation of our P&L, we have been working also advancing in diversity and inclusion. Yes, we have very concrete target for women in CMPC, 25% by the year 2025. We are coming from 15% around that. We have a big challenge, I would say, mainly on the operational side. We see a lot of room for doing that. No problem at all for women here. It's a more a cultural thing, probably in Brazil, we are better compared to Chile. You see more women here, but still room for that. And we are going in a very successful way. Same thing for leadership position for women. We are trying to find 30% target for the year 2025. Probably we are -- today, we're close to 20%, bit low than 20%. But you see what is happening with women in the company. And how many -- when you see the people that is entering the company now, starting with the company now, the percentage of women have been increasing dramatically in the last years. So this is also good. And I would say also the women are much more open to work in some -- work in part of the company that's mainly connected with the mills. But today, everything is really -- automation is everywhere, machine is everywhere. So it's a very good opportunity for everybody. Women or men is good. In talent, we're mapping. We are developing plans for the leaders of the company, very concrete when open learning ecosystem. So in general, a very important definition for us. In terms of sustainability, again, we have a special area of sustainability. You will see a presentation. I will not go deeply in this because we'll see a very complete presentation on that, but a very -- my message here is we are focusing especially in that area. We are absolutely convinced that the sustainability is crucial for the life of this company. We already lead 102 years in the past. We want to live 100 more years. But -- so we see this company being a leader in terms of sustainability. This is the definition of the Board. We have a sustainable committee, where some members of the Board are participating, the main managers of the company participate there. So we're following really closely -- in a very close way, all the goals we have defined for the company in terms of conservation, emission, water, waste, so advancing a lot on that. They said now -- sorry, sorry. A video, we are seeing now. [Presentation]

So, we actually work during the last year and in our strategy for the year 2030. We spent, I would say, several months. And we -- this trends that you have seen today here and the screen were really, I would say, studied. We spend a lot of time with different customers trying to understand in a better way the future. Some of them seems like they're obvious, but believe not everything is obvious here. And so we defined these clear 5 trends for finally writing our strategy and the definition that we want for the company and we presented that to the Board and so it has been a topic of a really deep discussion. Just to summarize that, sustainability and different aspects. The digital transformation -- we are working a lot of specialized people in that. Society is increasingly demanding. We are really -- we want to be a factor of development of the community and the society, responding also to more demanding aspects they have been doing on us. Also, high standards for our services; delivery, we see an interesting opportunity for our Packaging division there. We already have been increasing our development in that. In the case of hygienic, hygienic, in general, Softys has done a great job on that. And I would say that, again, we see a lot of opportunity, the change and the behavior of the people. We probably behave differently today. We have been adding in our own operations, many different changes, and we are seeing that in many users in our markets. Well, the connection with the nature is also important here, we have forest not only here, but in Chile and Argentina, and we also are opening them for the society and trying to create a closer contact with the people through our forests. And finally, customers have already talked about that. And so being trying to be really closer with them. So finally, just to comment that we have the opportunity -- sustainable products, strengthening part due to greater demand, especially in tissue and packaging. We see the -- we see that like -- with the tissue in our markets in Asia and Europe, how tissue continue growing. It's a very important business for everybody because already I mentioned the hygienic interest of the people, packaging, well, sustainable construction, summarizing packaging and personal care and tissue products, minimizing the use of plastic innovation also crucial for us. And I also want to very quickly mention to you that we have been working in the culture of the company. We understand perfectly that we have to change the way we are doing things. So we started this year in March, a deep analysis -- actually was a year ago with the first diagnosis and review of what we -- about who we are in the company, what the people want with the company -- is our people being feeling okay and represented by our values. So we have been working with the -- first, with a group of 50 leaders of the company in revisiting the values of the company, what we want for the future. We work on the purpose. We created a new manifesto. We defined the main values look, the values of the company, where we are strong, where we are weak, et cetera. So we have been doing a very nice work on that. And now working on transmitting this to the whole organization. Sometimes, we also visited some very good companies in the world, in Europe and the U.S., in Latin America foreseeing modern ways of working. So in terms of seeing them, the way we -- they are reorganized their operations, all companies have been changing. So we are more or less doing the same thing. And it's some time to transmit what you feel with all this initiative, but it has been really a nice job for the company. I see many people very enthusiastic about this. While the purpose of our essence, we are nature -- come from nature. This is very important in this industry, natural fiber. In general, this is -- and we create a natural fiber for a better future. And this is very important because the natural fiber is just not for now. We are really concentrated in the future. We are putting a lot of efforts in definitions for the company looking to the year 2050, some of them, some other initiatives, some in 2040. This is a kind of activity where you have to plant trees, you cut them between the 10 years and 22 years depending on what the species is. But -- so it is very important to define very well what you want for your next at least 20 years. Summarizing my last slide here, this is our map for the future. This is the way for the future. Here are our pillars and sustainability, growth and innovation, customer competitiveness, I didn't mention that, but we also defined to be really a competitive company working on that. And we started some years ago, and we have some results, but we want to be P10. We defined to be in the percentage 10 as a leader company in terms of cost, in terms of -- integral speaking. So we are doing benchmark with the best practices in the world. And so this is a very crucial definition for the company. We do not want to have only the advantages being Latin American with the fiber here that grows quickly, so it's good, eucalyptus in Brazil is the best and pine is good in Chile, I don't know. So what we want to be the best in what we can improve and what we can really compare with our competitors. It's not just the fiber. It's the way we make our products, it's the way we form people here. The way we organize our teams is the way we sell our products. So there are several things that we are trying to -- we started measuring them. And then talent is also the other pillar of CMPC. Well, this is I wanted to transmit you now with quick, but will you have the presentation, but this is more or less a big picture. Now Nicolas Gordon will speak a little bit with you about sustainability. So I will...

Thank you, Francisco, and good afternoon, everybody. So I will speak to you very briefly about in more detail, into what we're doing as a company in our sustainability strategy. As Francisco mentioned, it's one of the pillars of our strategy. I think overall, in the last decade and the last few years, we see companies move from CSR programs and these marketing sort of targeted sustainability initiatives to really having -- this is a core of the business and particularly in our business, because of where our resources come from and where our products end up in pretty much every continent in the world, these aspects are increasingly more and more relevant for companies. In the revised strategy, we have committed to maintaining some of the leading positions that we have globally in terms of sustainability. We have been named for 2 years in a row as the top 3 company in the world when it comes to ESG matters by the Dow Jones Sustainability Index. Today, we are listed in 3 of the 4 indexes of the family of indices from S&P. The formerly known Carbon Disclosure Project, CDP, we've been listed in their A list for a number of years now, which is really a small group of companies globally in our climate change, in our water efficiency and deforestation practices. But we really want to drive all other reporting agencies and indices such as MSCI, Sustainalytics, both of those strong in the U.S., and other that are very strong in Europe, such as FTSE4Good, the indices in the U.K. and the Moody's Vigeo Eiris, ESG index. We really want to make sure that across different indices, we are really coming out strong as one of the leading companies in our sector. When it comes to environmental indicators, we've enhanced, I think, our climate change commitments with a net zero emissions by 2040. This really positions us as one of a handful of companies in our sector, at least that are committing by 2040 to net zero emissions. And I'll speak a little bit more to that in one of the next slides. We want to really track our products and how circular they are and make sure that we're contributing not only through our operations, but also through our products. With Water and Waste, we have goals for 2025. These are very ambitious goals that are really around the corner, but we want to make sure that we deliver by 2025. And we will be, of course, announcing probably that same year of what our plan is for the following 5 years or the following 10 years in those senses. And we also mentioned that we have in one of the videos we have a conservation of biodiversity strategy will be launched very soon, hopefully, in the next month or so. And that really will I think, establish our view on nature on how conservation areas and biodiversity are really promoters of healthy working forests and importance for communities and the importance for our future as a company, whether it's in our forest in Argentina, Chile or Brazil for our operations, the health of the forest and how we can become nature-positive company and deliver positive impact to our activities. When it comes to the communities that surround us, we're very recently established an alliance with a center in a university in Chile to develop this indices, the human well-being Territorial Human Well-being Indexes, which will allow us to really map not only the impact of individual projects that we do with communities, but the overall effect of a number of social projects that are happening within a territory. Okay, so we really want to move from that idea of measuring number of beneficiaries or amount that we have invested in social projects to actually measure impact. And I believe we will be one of the first companies in our sector to do so. But in parallel, we will continue with the survey that we have been doing for the last 4, 5 years, which is perception survey. We really want to make sure that the people in our communities feel that those impacts that we're measuring through the tool are things that they're living and they're perceiving in their daily lives and vice versa. Perception with no impact at the end of the day, is not good as well. So we want to make sure that these 2 elements are working in conjunction. Now I mentioned briefly about our emissions goal. I think it was in one of the slides that Francisco showed, but we were just last week granted the official validation of our emissions targets by SBTI, Science-based Targets Initiative. This is really the gold standard when it comes to corporate goals around climate action. And we have been validated for our Scope 1 and Scope 2 emissions. These are direct and indirect emissions by 2030, this is a 50% reduction, and this is aligned with 1.5 degrees celsius. So we are aligned with the highest standard of the parties of the UN climate counsel and the conversations that we've heard in the media over the last couple of weeks at COP27 in Egypt really strengthened our position, I think that we are really aiming at that level that even as states and parties, they haven't yet come to an agreement. And when it comes to Scope 3 emissions, this is something new, we've just announced -- and this is actually a 37.5% reduction of our Scope 3 emissions. This is of 2/3 of our Scope 3 emissions. And this is a 2035 goal for Scope 3 emissions. Just to give you an idea, there's a few companies in the world, really, that are reporting entirely their Scope 3 emissions. And I think what's interesting here is that we will have to start working with suppliers and clients and the value chain up and downstream to really understand better the source of those emissions and really take in partnership with these groups, those actions that will deliver lower emissions across the value chain. We want to make sure that our products -- and not only the products that exist today, but the products that we will deliver in the next decade are either recyclable or reusable or compostable or zero waste, such as the zero-waste sack that we were showing for cement industry by 2030. So there's a challenge here in not only harnessing the power of natural fibers, but those solutions that will come to replace those perhaps fossil fuel-based solutions also we'll have to have these components, and we want to make sure that everything that we put in the market is circular as well. Our water goal is a reduction of 25% of industrial water uses an intensity goal and the BioCMPC and the Guaíba project that we have visited today will be a strong contributor to that goal which is a very, again, ambitious goal that's around the corner by 2025. The BioCMPC project will deliver a strong contribution to that reduction within our company. And I would say here, we have a number of other initiatives such as the development of a shadow price, an internal shadow price that we use for decision-making within the company. And also making sure that projects are not only implemented where it's, let's say, most economically feasible, but also where the climate data in those future scenarios on drought are showing us that we should put a priority. We want to be a zero industrial waste company by 2025. And the best example of that is our partnership with Vida here in Guaíba where we are pretty much reusing everything that comes out of the mill. And as I mentioned before, conservation by diversity strategy that will really expand on what is happening in these areas of conservation and protection. We are aiming to have something around 430,000 hectares between Chile, Argentina and Chile. By 2030, that RB are going to be targeting those objectives, yes. We want to connect with third parties. So we don't live within a disconnected environment. So by diversity corridors and everything that's going around us is also important is coming within the goal. So just a quick graphic of what we're talking to about when we talk about net zero. We do have our Scope 1 and Scope 2 goal by 2030. These are the emissions that you see in yellow. And it's interesting to see that in green, we have those emissions that have to do with Scope 3. So our value chain emissions actually respond to 80% of the global footprint of the company. We are not including any of the carbon removals from the forest or any of the carbon storage within our products that should be on the negative side of the curve. That is because the protocols today do not exist yet to measure this and be reported by companies, but they are in development, and they will have them in the next couple of years. But visually, what we're trying to say is that we will reduce along with those goals that we've established, our emissions by 2040 and our potential of capture and removals through our forest will be at least as great as those residual emissions that we will have by that year, which will allow us to become a net zero by the company by that year. I also mentioned this earlier. It has to do with our products. So not everything is our operations. In our products today within the family of wood, pulp, in our Packaging division, sack kraft, boxboard and corrugated today, we do have a high circularity index with 100% within pulp, 100% within our wood-based products. In sack kraft we have a challenge with those barriers that have to do with moisture, particularly where today, there's still the solutions have some fraction of plastic, and we are working with innovation to really get rid of those -- find the new products that will deliver those solutions. But again, these are the products that we see today. So the challenge here is not only getting to 100% but we want to make sure also that the new products that come into the market are delivering these attributes as well. When it comes to water, this is a sample of what's been going on in our company. I think we were challenged in 2018, '19 and '20 to really do all the studies and understand where we could find the best opportunities to deliver those reductions in our water intensity. Now those projects are coming live -- now those projects are being implemented. So we will find the initiatives and hopefully, what we need to reach our goal by 2025 in the next year. So '23, '24 and '25 will be absolutely key within operations, closing open circuits and using innovation, best operational practices as well. So best is absolutely a crucial program within our company to deliver those water efficiencies that we're looking for. And this means that we are able to grow, this means that we're able to produce more tons of products put it into the market, but that's decoupled from the need of new water sources. So we want to decouple growth from the need of new water. As I mentioned, when it comes to sort of social development in the communities that surround us, which are quite large when we combine our Forestry base and our industrial presence, but we want to make sure that this is a long-term commitment with the communities that surround us that when we talk about impact, we're actually measuring impact and again, not just how much has been invested or how many beneficiaries we have of our projects. And we want to make sure that at a territorial level is produced in the perception of a sector in a company that really delivers shared value and where people can engage with our sector or within other sectors and share territories that really are improving in the quality of life of people. This is an example of a program that Softys, our tissue business unit has developed over the last year, and it has to do with bringing water access really to people in need, benefiting something like 1,600 people so far through almost 100 projects of water where it has to do with bringing really water solutions and to bring sanitary solutions to people that do not have them within different places in Latin America and with help of the NGO -- tissue. And lastly, I want to finish with just a number of different milestones in the last year. As I mentioned earlier, we had really, really strong ratings with CDP. We are hoping to get our results in the next 2 weeks for this year's disclosure around. We were already A-listed in climate change and A-listed in forest. Just to give you an example, there's typically 2,000, 3,000 companies responding and disclosing to forests and only a handful less than 20 companies get an A-list. So it's a really, really small percentage of companies that actually meet that A-listing in CDP. I just read this morning that binding administration is going to make every supplier of the government mandatory to report through CDP to the government that they want to be suppliers of the government. So this is really interesting to see how not only companies are increasingly expected to disclose on the performance, but this is going to start being part of the regulation as well. I mentioned also our rating in the Dow Jones Sustainability Indices. We were also listed within their year book last year, and we were listed as the global industry mover for the Forest and Paper sector for 2021. Just a few weeks ago, Francisco was named Board member in the WBCSD, the World Business Council for Sustainable Development. It's a milestone for us, and he is the first Latin American CEO to sit on the Board of WBCSD. And this is a group of 230 leading companies, global companies within all sectors in the world that are trying to push sustainability as a smart way of doing business and has a responsibility of global businesses today. I mentioned science-based targets and that validation that really puts us, again, as the first pulp and paper company in Latin America to receive validation for Scope 3 emissions and also goals that are aligned with 1.5-degree Celsius and only a handful of companies that have been validated in the world in our sector. In a couple of weeks, we will have the Procurement Day back in Santiago. In a month, the things that we will be talking to strategic suppliers of our company, global suppliers of our company is really start engaging in that conversation around, first and foremost, GHG emissions, but very likely that in the next couple of years, we're going to expand this into water use and to other practices within the value chain that allow our company but also those relationships, those business relationships and the performance of our suppliers, in some cases, companies that are even bigger than our company to really work jointly and improving the footprint of the value chain, yes. When we talk to clients and end consumers really, it's the entire footprints upstream of products that they care, and that means that we have a responsibility as value chain members to really drive that conversation. So we will begin the conversation with our key suppliers and disclosing the carbon emissions and then working together to see how we can figure out through electromobility and through a number of other things, how we can really reduce those footprints. And a lot of what we do gets disclosed through our integrated reports. And this year, very proudly, we can say we received a number of different awards around the globe for the, I think, the quality of our disclosures and also the balance and the information. So we're typically talking about those things where we're -- we think we're doing well, but we're also very open about those things where we still have challenges, and we like to tell the story about how we are going to meet those challenges and what we're going to do in the next couple of years to close those gaps. I will end my presentation with another good news, which was the issuance of our eighth instrument of green debt. We issued for the second time in Chile green bond for roughly $250,000 million -- $250 million, I'm sorry. And so this totals $2,200 million in green financing for our company. And we had great, great response from the markets, huge demand, excellent rates. So I think that's a sign that our company is really a trusted partner when it comes to sustainable financing in our sector and in our region. So I'll leave it with that. And I think it's Fernando.

Thank you, Nicolas. Well, thanks. These are the roots of our competitive advantage. And of course, everything starts with the fiber. And one of the discussions we had during this strategic 2030 construction was the best way of taking advantage of that fiber. And the idea is to tell you why we are growing on each of the businesses where we are participating. So in Biopackaging, and I'm speaking here on behalf of Jorge Navarrete, the CEO of this division. He's in Europe right now, visiting some customers. Specifically in the sack kraft business, where we want to grow here. When we're thinking long fiber, we believe this is one of the best way of taking advantage of the long fiber -- of the pulp long fiber. Why is that? This is a $7 billion business. Today, less than 30% of the paper sacks -- of the global sacks are paper-based. So more than 70% of the paper -- of the sacks are made with plastic. So we do see a great opportunity for growth here. We have seen a strong growth in the past years. We believe this growth will continue. As part of that, we -- as part of this strategy, we acquired Iguazú in April. We took control of that company. We are integrating Iguazú as part of our Biopackaging division, and we are very happy with what we have found. Of course, when you buy a company, do a due diligence and all that. But when you take control, you learn the reality. And we are very happy. We found great people, a great team and a passionate team about this business. Today, with this business, we became the second largest paper sack producer in the world. Today, we have operations in Brazil, in Argentina, in Chile, in Peru and Mexico, and we are serving different industries. As Nicolas mentioned, we have big challenges here. If we want to grow -- if we want to replace other packaging solutions, we need to solve some issues. One of the issues is barriers. We need barriers in order to protect the packaging from the product, if you have moisture on the product or if you have a fat on the product like in a pet food packaging, you need to protect the packaging from the product, but you also need barriers from the outside to protect their product from the environment. And we are working on natural barriers, and we are investing money in order to develop that technology. When that technology comes, will have a great opportunity for growth. In this business, specifically, it's very important to be integrated. And when you are integrated, you can start developing products together with our customers from the forest to the final product, the packaging. That's why we believe, and Iguazú was such an opportunity from the forest, the pulp, the paper and the paper conversion into paper sacks. In general, this is a business that has a very interesting return on investment. We have seen an average in CMPC when you look at it on an integrated basis of about 12% which -- with long-term prices is very good as it is aligned with our strategy. In boxboard, this is an opportunity for short fiber. We believe this is a great way of taking advantage of our competitiveness in the short fiber business. This is also packaging that is growing, is growing above 4% when you look long periods. But in the last couple of years, the growth has been much more than this. Today, there's a lack of this folding boxboard product, and there's no capacity even though there are projects that have been announced in different parts of the world. Those projects cannot attend the demand that is coming, that is foreseen. So we see a great opportunity for this business. Again, return on investment on this business is about 12%, and it's a great hedge for pulp. Prices in boxboard are much more stable because you build long-term relationship with your customers. And therefore, when you have high pulp prices, the margins are reduced but on the other hand, when you have low pulp prices and our Pulp division is hit by lower margins, in this business, we have better margins. Corrugated boxes. We saw the trends. And of course, delivery has been a big issue during the pandemic. And we saw that in all countries, today, more in developed economies, but also in developing countries, we see that delivery is very important. And corrugated business is very important there. We have a strong operation in Chile. We have today about 37% of market share there. And we have a strong plan to be more profitable in that business to recover some of the market share, we lose with the fire we had at our paper plant in Chile in March. So that plant is back in operation again since September. But we have a very strong plan in order to continue to improve our results of this business in Chile. So far, we don't have plans to grow outside of Chile with this business. Corrugated boxes don't travel very well. You are transporting basically air. So you have to be local. So today, we are basically focused on the Chilean market, where there's a lot of demand for this kind of boxes because of our -- important Chilean exports, fruit exports, wine exports, salmon exports. And with our operations, we can serve very well all those industries. Raimundo?

Thank you, Fernando. So we'll talk to you a little bit about the growth in our Wood Products business as well as in Pulp. So in Wood Products, we want to grow, see it's a very large market. As Francisco mentioned, there is a trend -- a relevant trend for sustainable construction and wood is a key solution for that, wood captures carbon and keep it a store for many, many years. And in these days, with technologies like the engineering wood products, within that, you have CLT and LDL now within those, you can build high-rise buildings made out of wood, something that was very difficult to do a few years ago. The timber market is huge, it's $140 billion in the world and 360 million cubic meters. So it's extremely relevant. The estimated growth for the wood construction or construction in wood is 14% per year. So it's a huge growth. In that particular segment, the construction market grows much, much lower, but the sustainable construction much higher. We have been quite profitable in our Wood Products business in the last few years. Not only because of the prices, I mean, the prices, of course, help. But even in 2020, when prices were not that good, we have improved our profitability, and we are more or less with a ROIC of about 14%. And as I said, wood or construction in wood can replace materials that are non-renewables, like steel and cement. Our fiber -- another reason why we want to grow in wood is because our fiber is a very high quality and is very competitive in cost. We also have a diversified customer base with global presence, long-term relationship and also a presence in the retail sector in different countries and continents, including Chile, the U.S., Europe, Australia and the U.K. Moving to Pulp. We want to grow in pulp because it's a very relevant market. And also with pulp, we can replace plastic, both directly in our Biopackaging business but also indirectly through all our customers worldwide. It's a very large market. The market pulp was 68 million tons. The market is a mature market, but it's healthy. It grows at about 1.4% a year, which is good growth for a mature market. We have been profitable in the last 2 years with an average ROIC of about almost 19%. In the last 2 years because of prices, but I think in 2020, where prices were lower, we were also relatively profitable. As we have been improving in our operational excellence and also in our customers interaction. And as I said, pulp is very important for plastic substitution. We aim to keep growing alongside our customers. We don't grow just for the sake of it. We don't plan to be the largest one, but we do want to be the best pulp supplier worldwide. As you visit today, we have been growing here in this mill with this BioCMPC project that besides additional tonnage, brings us advantages in efficiencies in terms of cost and also in our sustainability efforts, we ready to reduce water usage and CO2 emissions. Now for all of these, we need fiber. We need forest, yes. And in forest, we have a few challenges. One is to maintain all of our operational continuity by supervising our industrial plans. We have also been working with operational excellence in forests to reduce or control our costs and gain competitiveness in this -- with this aim to be what we call P10 or percentile 10 in competitiveness. We have also been, in the last few years, making a big and will deepen that effort to connect better our forest with our mills in terms of the specification that we need from our wood chips and how is that to connect it with our mill. In this particular mix year, we can make big improvements on that particular connection, and we are sure that we can do that the same in all our mills. And of course, we want to grow, and we are growing our forest base and we plan to keep growing our forest base, particularly in Brazil, in Rio Grande do Sul to plan our future industrial growth. Now to accelerate internal capacity, we will build a technology and innovation center that takes apply innovation from seed to paper. So we have recently hired one very senior person that will lead this effort. And for the first time, we will connect our innovation efforts from the seed to the paper to our customers. This will strengthen our R&D capabilities. We will -- we are already becoming but we will become even a better partner for our customers for their developments. As you know, for -- to replacing plastic, there are many efforts all the barriers for the paper to be used for food applications for flexible packaging, et cetera. And we also want to strengthen our disruptive innovation with products such as tall oil lignin. Francisco mentioned about CMPC ventures, that's also very relevant for us. So we plan to run our Scandinavian office and look for opportunities as well in other countries. This make us part of an ecosystem that we were not part before. And so we're very excited about this, and we believe that will bring us good opportunities. And within this, we have also built a more agile government for our innovations. Now I will pass to Jorge, who will explain the growth in Softys.

Thank you, Raimundo. Hello to everyone. In Softys, we -- next one. In Softys, we believe that the Hygiene & Personal Care business has a very strong -- has very strong fundamentals, which we can see here in this chart. When we analyze the potential growth of the Hygiene & Personal Care products in Latin America, where Softys operates, we immediately contrasted with more mature and developed markets such as the U.S. or Europe, and what we can observe here is that there is plenty of room to reach the levels of penetration and usage of products present in those markets. For example, when we compare the average consumption of tissue in Latin America of 5.6 kilograms per person a year, we kind of said there still -- we're still 1/3 of what is currently consumed in the U.S. Baby diapers is no different. Since although less babies are born every year, the low levels of penetration in LATAM are still way behind mature markets. Furthermore, and the most iconic example of low penetration for Softys categories is incontinence or adult care since these types of products have not entered as strong as in other geographies yet, since there is an age range that has not started to use this product as strong as in other geographies because incontinence is at go or recognizing that the condition is more frequent situation than thought. And some subcategories of incontinence, which are like the lighting continents or more comfortable adult pants are getting more and more traction. But besides volumes, there are strong fundamentals to think that prices via premiumization that was one of the trends that we saw on this video of the products will leverage even further the top line of the companies in the sector. Well, then given the favorable fundamentals of the business shown in the previous slide, Softys has committed very significant resources in expanding its capacity where needed. In that regard, we have invested more than $380 million over the past 5 years, not only in tissue, but also in personal care, in Peru, Brazil, Argentina and Mexico. As a result of this continuous deployment of capital, we have been able, for example, to reach more than 10% market share organically in baby diapers in Brazil. Besides this commitment towards growth, we are cautiously disciplined and focused in delivering our projects in time, cost and scope to meet the economic return of the business cases we recommend. Currently, we have announced a new paper mill in Mexico to continue strengthening our position in the tissue market. Not only organic growth has been a part of Softys' agenda, but also M&A has played a key role in Softys' evolution this year. In 2018, we set up and publicly announced a clear goal to grow in 2 countries that represent almost 2/3 of the Hygiene & Personal Care market in Latin America. And where Softys did not have a strong presence yet, Brazil and Mexico. In 2019, we closed the acquisition of Sepac, a leading tissue paper player in Brazil that turn Softys into market leader in the country. Sepac has not only a very attractive business model, but also best industry practices, which have been exported around Softys from Mexico to Chile. In 2021, we continued our path towards consolidating our leadership in Brazil with the acquisition of Carta Fabril, one of the industry leaders in Rio de Janeiro with its cotton brand. Combining a strong consumer tissue business with an emerging personal care business in baby, feminine, adult and wet wipes. Most recently, we announced an agreement with the Belgian group Ontex to acquire part of its Mexican business, which will allow us to create a new company, complementing our presence in the tissue space with a 30% market share in baby and adult care. We feel pleased of having delivered this relevant piece or part of the Softys strategy, which will allow us to play with a more robust and strong position in Brazil and Mexico. Well, now after all this inorganic growth, we are totally focused on integrating these companies to the ones we had before, this M&A wave in Brazil and in Mexico. Why are these integration processes so important? We need to capture the strong synergies we evaluated in each of the acquisitions and deliver the investment thesis behind them. In Brazil, we have almost 30% market share in tissue and a growing position in diapers. We have found very important synergies in go-to-market production footprint, procurement and commercial aspects that we have already delivered with Sepac and that will continue to be captured with the integration of Carta Fabril. We have found great talent and know-how in Sepac and Carta Fabril, and we are leveraging this to strengthen our leadership in the country. Carta Fabril has 2 very well-positioned sites, which will improve our cost position to serve the Brazilian regions. Well, the story in Mexico is different. We -- Softys has been building a strong presence in the tissue space since 2006 when we entered the market, but growing our presence in personal care in Mexico and Latin America as well has always been a strategic goal for Softys. Then therefore, we started pursuing this transaction with Ontex a long time ago, especially for the very relevant and important shares. They have not only in baby diapers, but also incontinence or adult care with 33% of the Mexican market. This transaction will allow us to break the threshold of $1 billion sales in Latin America in Personal Care positioning Softys as the second largest player in Latin America and #1 in tissue from Mexico to Chile on aggregate. From a Mexican point of view, this transaction is a transformational one since we will combine 2 large-scale businesses, one in tissue and the other one in Personal Care. And we will be able to unlock a lot of value in go-to-market, the channel and brand portfolio synergies of these 2 categories or business unit operating together. We will become a one-stop shop to our clients across the country, improving our offer and relationship with them. At the same time, Softys Mexico will become one of the most important subsidiaries for Softys with more than $800 million in sales. The Puebla plant which is within the perimeter of this transaction, is very close to where the highest consumption of the country is concentrated, allowing us to minimize our distance to serve our clients. Thank you.

I'll explain a little bit about our customers' pillars. All pillars are very important, but there's no doubt that without customers, all of this effort will not be worthy. So to meet our customer needs, we have defined 5 strategic priorities. I will explain 4 of them that apply very much to pulp wood products and via packaging and Jorge will explain the last one that is mainly focused on focus. So the first one is customer proximity and support capabilities to streamline our processes related to customers. And here, the metrics is what we call the NPS, it's well-known metric, the net promoting scores and we have put ourselves an ambitious goal of being above 85 points. And here, we have to do this. We are developing and we're strengthening our commercial offices in the main markets to boost proximity to customers. And when I said proximity. I mean we see that the customers today are demanding. They want to connect not only on the commercial side and the logistics side, which is quite obvious, but also in the sustainability aspect to connect their sustainability goals with our efforts in innovation aspects also that's extremely important. So we have also deepened the technical expert role to develop products together with our customers, and we have been succeeding on that lately. And in that sense as well, the second metric is to -- our ambition is to have 10% of our sales coming from innovation products. And those have to be very aligned with our customers' needs. So for that, we have -- we are using our international presence and our technical expertise to codevelop products with our customers, and we already have several examples in Biopackaging, for example, the cement sack that distorts itself, in wood products, we have developed several plywood applications that are able to be used outside and in pulp, also, we have -- we are developing different grades with different brightness, with different strengths for different market segments. Another extremely important aspect of our customers is, of course, the deliveries on time and in full, and we are putting ourselves a goal of being above 90% on the OTIF index. For this, we are also promoting digital I would say, transformation of using digital tools in order to facilitate this task. And we have developed -- we are developing a platform called Fiberplace which is going to work for all our businesses and where a customer will be able to track their shipments and also track all their orders with the different qualities. And also, they can track also our commitment with this -- with the OTIF index. And another very important metric is, of course, the margin, and we are putting ourselves a goal of improving our margin by between 3 to 4 points by diversifying geographically, customer segmentation and also by growing in developed markets in those niche segments where we can obtain better margins. So this is very much applicable to our Biopackaging business, our Wood Products business and to some extent also in Pulp. So now Jorge will explain the pillar, the fifth pillar for customers.

Thank you, Raimundo. Well, we have this goal of 17% of total net sales for e-commerce. In recent years, we have been able to see how the world is changing at a surprising speed, especially in the fields related with the digital world due to COVID-19 pandemic and its lockdowns, consumption through these digital channels grew very, very fast all around the world, also in Latin America. And besides, we have been able to capture some of this growth we want to promote it even more. That being said, one of our objectives is this for 17% of net sales for 2025. As of today, our teams have done an amazing job carrying out projects in both business-to-business and business-to-consumer channels. For the first case, we have solid platforms, which have allowed us to reduce friction in coordination with our customers. While B2C side, we have digital stores in practically all countries where we have presence during the pandemic, we launched our D2C platforms in Chile, in Brazil and different parts in Latin America. We are strongly committed to this objective as we believe that is the way to get to know better our clients and find those behavior patterns. And thus, to be able to reach them with better products and solutions.

Thank you, Jorge. Okay. Let's talk a little bit about the pulp market. During this year, the pulp prices have reached high levels, historical levels. But many other commodities have done the same. The commodities tend to be somehow correlated because they depend to some extent in macroeconomic situations or performance. The contract that we have lived during this year, a lot has to do with supply disruption because of problems at mills, unexpected downtime, but also because of logistics situations. The chart here on the left shows the global scale reliability. And you can see that in the years '18 and '19, the blue and the orange lines, the reliability was 80% more or less. And then during the last 2 years, 2020, '21, we went down to about 40% -- 35%, 40% so the reliability has been really a disaster, not bad because been terrible. This is global reliability. And as a consequence of this, we are paying the price in terms of inflation in many products, but also some of the products are somehow delayed in ports, either or imports or in transshipment locations or destination ports. The second chart is the average delays for vessels arrivals to load. And as you can see also, the blue and orange line in the right is the -- it used to be only 4 days of delay and then we reach levels of about 8 days of delay. So it's double. That's a disaster for ports. This has improved marginally. We are down to 6 days, but still far from the normal levels. So in both reliability and in delays in both cases, things are starting to normalize, but still they're far from what we would call normal levels, pre-pandemia, levels. In terms of the unplanned downturns, this is just only talking about pulp -- market pulp. 2022 has seen a huge amount of downturn. The normal level is about 1.4 million tons. And this year, we have set about 2 million tons of unplanned downturn. That's very high. Now with all things happening around the world, it's very difficult to predict what will happen next year. But it's no doubt that 2 million tons has been a big number. Talking a little bit about China. This is the Chinese prices for eucalyptus -- for hardwood on orange and for softwood on blue, the prices have increased quite a lot during this year. And more or less, they have been stable in the last few months. Softwood has dropped about $30 to $40 and hardwood has not dropped yet. We are seeing some concerns in the Chinese economy, as you all know, related in many cases related to the internal demand because of COVID restrictions. So a big question mark for all of us is when the Chinese economy will open, when they will normalize. And to be honest, we don't know. We wish to know. But I think that's a big question for everyone. This second page shows the Chinese paper prices for the different grades on the top. And as you can see, some grades like tissue have been able to pass the price increases into the market without major problems. Some other grades have also been able to pass but without -- with some more difficulties here. I think some of the relevant part has been that the Chinese were for quite a long time, they were unable to export. They couldn't export because the freight was absolutely not affordable. They couldn't actually pay the freight to bring the products in the world. That lately has been coming to normalize. So now they're starting to export. But still, their mills are running at about maybe 65 -- the paper mills, about 65% or 70% capacity. So if China do open or when China do open an economy, people is able to consume normally get out of their houses, we believe there could be a positive surprise. Because as I said, the mills are running at 65%, 70% capacity they do have capacity to run much, much higher. In the other side of the world in Europe, price demand has been very positive throughout the whole year, paper demand and you will see in the next one, when we talk about the shipments. And as a consequence of that, prices for both fibers have been much higher than in China throughout the year, is in particular in the last few months. In the last weeks, we have seen some weakness. I think there are some segments as paper is one of them that are seeing a very different context. And there are some concerns. I think energy prices, gas prices, in particular, has been extremely high and it's a big concern. So still, I think European prices are high, but the economy is seeing clearly strong cloud. Talking about shipments. The chart on the left shows the global shipments for pulp in this year. And as you can see, China, which is the first one on the left, has import 2.3 million tons less than last year. In the other hand, Western Europe, has import 6.5 million tons more than last year. So there's a huge swing between China and Europe. Many of that has to do with the fact that the Chinese couldn't export for what I explained. So therefore, the Europeans have all their mills running at full. I mean I think everybody sold more pulp into Europe than what they thought and higher prices and has to do with that. That, of course, now is getting more normal. Chinese have been exporting paper lately. The Europeans have now have competition again and they are losing business to the Chinese somehow. So this is more or less starting to get normalized. And the other chart on the right is the stock of wood pulp in European port. This is a very relevant indicator. And as you can see, the stocks has been quite low. So one of the reason why prices of pulp have not dropped is because the stocks are still relatively low in the port. So availability is tight. The market still feels very tight. Now what do we expect in the next few years? Talking about growth, we think that the market for pulp will grow in the next -- between 2021 and 2030 is going to grow about 12 million tons. 12 million tons of growth. So the market which is about 62 million tons -- was 62 million in 2021 will reach about 74 million tons in 2030. Out of this growth, 9.3 million tons will be hardwood, that represent about 78% of the growth and 2.6 million will be softwood. Out of that 2.6 million tons of softwood is about 1 million and 1.2 million tons, which is flat, which is also a market that grows -- a smaller market, but it's growing rapidly. In terms of the segments and how that will behave. Those 12 million tons will grow mainly in tissue. As you can see, the Tissue segment will move from 41% of the share of the market in 2021 to about 49% in 2030, so relevant growth in tissue. Relevant growth also in specialties, there's a 1% growth, but a market is growing, 12 million tons is relevant. Boxboard is also growing because of the trends that we saw and what Fernando displayed on our Biopackaging business and strategy. And in the other hand, printing and writing continued to decline. That segment that represents 21% of the market in 2021, we believe will represent 11% in 2030, okay? So that's, of course, overall for the market, there's less demand. But on the other hand, it's less raw materials for the paper making because tissue papers in the U.S. and in Europe, also in Latin America they use in their mix, a relevant amount of recovered fiber. Every day, they have less fiber -- less recovered fiber availability because of the printing and writing decline. So that means that the tissue producers are, and we have to buy more building fiber in the next years. So the key takeaways from the market, short-term uncertainty, as we talk, we talk about China, we talk about the -- what we haven't talked about the world without a doubt is a big concept that's creating some clouds in the economy. Unplanned downtime is also a big doubt what will happen with that. There's some positive trends in the post-COVID areas. We talk about e-commerce with affect possibly the Board segment. We talk about print and writing and the availability of recovered fiber. We talked about the growth of the margin as a whole -- of the market as a whole. And another relevant takeaway is that the marginal cost for producing pulp has gone up rapidly. I think for all of us, pulp producers, the costs have gone up because of chemicals, because of wood. That's quite a relevant fiber war around the world. And this, in part, is because of the mills integrated pulp and paper built -- have been built in Asia. And these people, they build these big mills and then they have to find the wood chips to import. So every day, every year, they have to import huge amounts of wood chips increases amount of wood chips and then availability of wood chip in the world has declined. The Vietnam is exported less wood chips, Australia exported less wood chips, Chiles exported less wood chips because of the MAPA project. So the marginal cost for producing pulp, but then maybe 2 years ago, was about $450 CNS China for hardwood is now about $600 to $620 CNS China. So there is a big change in the marginal cost. Okay. That's for my part. And now I pass to Fernando to talk about competitiveness.

Thank you very much, Raimundo and Jorge. In 2018, actually late 2017, we started implementing lean manufacturing in our operations, specifically in the Pulp division. And that program has evolved. Today, we have a purpose. We have a strategy under this umbrella. We have worked in a new way of working. We have organized ourselves in a different way, and we have worked, as Francisco mentioned, on the evolution of our culture. Everything put together is what we call Best 4.0. Best was the original program of implementing lean. Best 4.0 puts together all these and it's the new way of working for CMPC. With this, we have set a goal that as Francisco mentioned, to be P10. What we mean by being P10, we want to be in the first 10 percentile in terms of competitiveness, okay? But this has a catch. We not just want to be in the 10% of more efficient. We already are there if we consider our competitive advantage in the forest. And also if we consider our competitive advantage for having state-of-the-art operations. We want to be in the 10% more efficient operations, leaving outside the forest. So considering then everyone is buying the wood at the same price but also that we have all the same technology. So Guaíba II, which is 1 of the most efficient mills will not compare with all the mills in the world. Now it will compare with the newest mills in the world, and we want to be the top on that class. On the other hand, Guaíba I, a mill that was built in the '70s, we'll have to compare with older mills and plants. So we want to be -- the catch is want to be very aggressive on being excellent from end to end and not only take advantage of our forest competitive advantage. Trees grow faster in the Southern Hemisphere. We don't want to subsidize our industrial operations with that, let's say, cheap fiber. How are we going to do this? We have 3 main pillars. The first 1 is operational excellence. The second one is optimizing our purchases. And the third one is building a more agile administrative processes through all the operation and the company. In -- I'm sorry, in -- we have a specific metrics for this in operational excellence. We want to have an OEI above 55%. This is a way of measuring how we have implemented lean. In purchases, we want to have a GP of 3 points. This is global procurement excellence. It's a global known indicator that shows the maturity of your purchases program. And finally, in administrative processes, we want to have SLA, so a Service Level Agreement, thank you very much. Service Level Agreement with our operations. So we make sure that we are agile and we allow the excellence and the procurement and all the operations from end to end to be efficient. So today, we have a sample of this. We visited our innovation room in pulp in order to be efficient in our operation, we need to bring data. We are working on the middle of the future. We want to leverage our operations on digitalization. We are -- we manage in these facilities thousands and thousands of data, and we don't put artificial intelligence, advanced analytics, we cannot take advantage of that. We want to bring the information to the operators to the maintenance crew that is in the ground. So they have all the information on their hand on a tablet, so they can perform their work in a better way. They have more information on their hand to do their job in a better way to make more efficient decisions. Sometimes this big companies are very theoretical. We want to delegate -- we want to transfer the responsibility to operators, the one that really knows what is going on in the ground. But for that, they need data and with data and the information and experience, the training, they can be accountable for what they're doing. In lower procurement excellence, we have been working. We have been measuring where we are today. In general, when you think in a car-making company, they are the top in the world in procurement. We want to reach that kind of level, and we are working heavily with our team in training, but also with our operations because this is a work that has to be done for hands. It's not just the procurement team doing better purchases. We need to work with the operations to improve the results. In the administrative processes, we want to be agile. We want to be close to the operations. We have been working on what we call one company, one team. So we have a unique team that operate through all the company in all the countries where we can leverage digitalization, best practices, and we can serve better operations, so the operation can perform at their best. Finally, in Softys, and as you know, you have been following CMPC's result, Softys has been hit heavily in the last year because of high raw materials, pulp prices, but also other important raw materials in the Personal Care business. So Softys has been working also on their own efficiencies. They built this Softys mass program with 10 very strong and concrete initiatives where more than 150 people is directly involved on this with important initiatives as regional sourcing using different mix of fibers, revenue management, digitalization, transformation and supply chain, improving logistics. So we have a very concrete plan in order to improve the returns on the tissue business and not only waiting for pulp prices to decline. So we are very committed to be very competitive. And as I said before, to be P10 without considering our forest and fiber competitive advantage and the technology of our operations. Now, Francisco? Last but not least, it was hard to talk about talent without knowing everything else.

Yes, we have mentioned a lot of different things that we are working on. I believe that we have a very demanding strategy for the next 7 years. Every business has a lot to do several things to change. We have to modernize several way of operating ways of operating. And so what we are really sure that we had -- we need to -- nothing is possible without the right talent here. So just finishing commenting to you that we have mentioned operational excellence. We have mentioned leadership and talent, we have mentioned different asset with the collaborators, and I want to be really concrete mentioning you what we have done until now what is in progress. For instance, in operational excellence, we already trained in -- this is in the best universities. We have a lot of things to do with Universidad de Concepción, which is a great university in the South of Chile. And it's in the area where we have our operations. But we prepare 367 employees. This is an example, Best is our -- the problem we have in CMPC for improving our way of doing things. We have prepared more than 2,000 people in management. We also sent some people really will define for being prepared in data scientists, so data science and so we have already 75 people working on that. And so they -- all the -- our program of advanced analytics, it is now in progress. Then we also defined 2 years ago, to the creation of actually of an education institute where we concrete a partnership with Universidad Católica. And then we already built. Actually, it started the operation Duoc is an institute, a very well-known institute in Chile. And it will be located in Nacimiento, which is a place -- is a good place for being arrived from different point of areas. And it will give the people in this area, the opportunity to be educated in different careers without leaving their cities. This is one of the problems we have in Chile. They have to move to Concepción or to Santiago or to other big cities. It is expensive for those families. So now we have practically kind of a university there. It's a professional institute, where we will practice dual education. So it means also that we want to be involved in that process. And this is -- it will impact a lot in that area. Well, in Brazil, technical talent and leadership, we map 100% of leadership roles. And this is crucial because when you start being more professional being here in different countries, more than 2,000 employers has been really, the role has been really well defined. So key positions and succession plans also in progress. And this is also really some priority for us. And I mentioned -- already mentioned the cultural evolution that we are working on with -- we started with 50 leaders and we will continue with the rest of the organization. In terms of collaborators, we have a program called Beyond. Beyond is a product that we created in the middle of the pandemic, what probably was more at the beginning of the pandemic, where we wanted to invite the people to really to see the future, not to be confusing what was happening in that time with the pandemic and everybody was really concerned about the pandemic every movement connected with the pandemic. So we see -- we said -- now we want to put our attention in the future. And so we created this program Beyond and we invited many people to be part of this and there is a position they're called ambassadors. And actually, it is really impressive how the people was interested in the future in innovation, looking to the future, how we can take the company to the future, and we have received several sorting ideas about that. Of course, climate survey we have and the ecosystem connected with the people also we are participating in Linkedin, Coursera, et cetera. So KPIs in our program and excellence and operational excellence base. We have many leaders today prepared for running the company through the best standards in the way that we compare many of our standards with the -- really with the best practices like Scandinavian practices, some of the very good Brazilian practices in this country is very -- it's also a very impressive country in some of the assets we are working on. Lean management also, I mean many people prepare on that. We -- nobody wasn't prepared -- formally prepared. Now we have more 2,000 people, diversity coming where we have decided to go. Ambassador, already mentioned, in general, you see there, there are many things that we are working and we have -- we will see the very good results in the near future. We already have seen some, but I'm very convinced about the future of this company really is really nice. And finally, to finish -- is just a summary to develop the talent, keep people at the center, prepared talent to grow. I already mentioned. And this definition that will be that will allow us to transform the company in terms of agility and or centrality. Some mentioned Fernando before. This is an old company in a very traditional company in some way, very theoretical company in the past, today is changing. But it was, for instance, the hierarchy of this company has been observed. And when we did this cultural discussion with the specialists and of course, we want to move to a very -- to a much more horizontal company and it means agility. And of course, we -- it will impact the organization in some aspects. So this is the reason why I want to mention that. I see CMPC really moving very well to the future and changing it in an open minded, I would say, attitude. So again, this is a process and probably some of the people that have been with that for many, many years as some problems in changing some aspects. But I would say, in general, working very well. And just to close, again, those are our pillars. This is what -- for us, very important for you to keep this in your mind. This is a result of really a deep work. And behind those titles, there are many ideas, activities, proposals, projects, et cetera. We are measuring them -- so growth and innovation, growth, meaning organic, inorganic innovation, meaning we are really conscious about that innovation is crucial for getting our strategy for changing for getting our sustainable goals, et cetera. So we are really strengthening innovation area. We will invest money on that. We're going to have in the future, hopefully, we have an institute for innovation in the company. This is what we want. Customers, again, we have talked about customers really in the center, but measuring that competitiveness, again, P10, percentile 10 is something that we -- this is probably one of the biggest challenge we have because when we talk about P10, it's not cost. Just cost is not just volume. It's a -- we have to measure some other aspects that are connected with our operation in general. So this is again, we are building this and I'm very convinced about our success in that. Talent already mentioned and sustainability. We have talked a lot about sustainability. So this is what we wanted to present you today. We will have 30 minutes for questions, more or less, if you want to have some with our team and my team here, we can answer that. Thank you very much for taking the time for seeing the presentation and, of course, open for answering or clarifying or receiving your comments or suggestions, whatever you want. Thank you very much.

We will have sharp 5 minutes break, and we will continue with the Q&A. So if someone want to go to the washroom get a coffee, water, in 5 minutes, we'll start with the Q&A. Thanks. [Break]

So thank you very much. Hopefully, during the day, the visit, you could learn more about our operations. Now with the presentation to learn about our strategy, but also and probably more important to see how proud and how happy we are with this project, with the company and with the future of the company. So now we would like to open the floor for questions. You can direct your question to anyone, and we're happy to answer that.

Please raise your hand if you have any questions. I'll hand over the microphone.

We need the mic so people that is on the streaming can hear us.

All right. Thank you so much for the presentation and all of the great detail that you shared. I'm Isabella from Bradesco. I have a couple of questions on my end. So first, on thinking about CMPC 5, 10 years from now, you mentioned a lot of different initiatives that you're carrying out in terms of growth, in terms of different markets that you can expand to? And you highlighted in different parts of the presentation about wood-based construction and you have the JV with Niuform. I'm not sure if that, how is it you pronounced it on CLC. So I'm just wondering thinking about the different avenues for growth, where do you see the company and especially into the new business, you mentioned textiles as well. So do you see pulp decreasing the importance from the perspective of the overall company. So that's the first question. And the second question on tissue and also on growth. You mentioned that you want to focus right now on consolidating all of the M&A that you did recently. But if you could mention opportunities that you see in terms of expanding your footprint, both in Brazil and in Mexico, is that opportunities that you still see that could happen or even organic growth? Or for now, you don't -- you're just really focusing on consolidating and capturing all the synergies. So those are my questions.

I can take the first one. Thank you. I think we plan to grow in several of our businesses altogether. So I don't think that pulp will loss relevance with respect to the other ones, so that we will grow, but we want to grow in pulp. As we said, we are growing the forest space here in Brazil. I mean, pulp projects, of course, are huge and they are more long term, so they take a bit more time. But we are now right now expanding this mill. And then we see growth in the wood construction the relative size of that is still small. We are happy with the joint venture in Niuform, and we have plans to grow in that segment, potentially in other geographies like in the U.S. And in the Biopackaging world as well, I think as we mentioned, we see very good opportunities to grow in Sack Kraft and in Boxboard as well in developed countries and with more value-added products. And the second question, Jorge will take.

Yes. Regarding more inorganic growth for Softys, I would say that, as I mentioned during the presentation, our actual focuses totally on in the integration of the last acquisitions in Brazil and Mexico. We have plenty of work to do there to assure to capture the synergies and deliver the investment thesis. But nevertheless, obviously, we are always ready to evaluate new opportunities as they may appear. I would say, more on a reactive way rather than proactively yes, to focus on integration all now.

As far as Raimundo regarding what you mentioned about expecting the unplanned stoppages remaining high probably except for wood chip availability and maybe strike activity. What other factors do you think will drive those stoppages? And do you think the hardwood market or softwood market will be more affected going forward?

I think one factor that has been affecting and I don't think will disappear is climate change. And the effect that it has had on the -- one of the Spanish mills have to stop for several months because of lack of water. I think that situation could be repeated in other parts of the world. I think age of mills is also an issue. I think in -- especially in North America, I think the U.S. and Canada, but also somehow in Europe, mills are very old. And I think we have seen catastrophic failures in some of those mills, and I don't think that we can discard. So I think it still is part of the equation. Yes, I think, again, besides what we mentioned, I think climate change and catastrophic events related to age of the assets.

Any other questions?

Well, my first question has to do with the target that you mentioned during the presentation regarding the EBITDA margin expansion of 340 basis points by 2025. So I would like to understand what are the main sources of -- that explains that margin expansion. Are growth revenues or growth and innovation, what are the divisions that could explain that margin expansion in the future.

Well, I would say it's a combination. It has a lot to do with our operational -- excellence operational program. It means that we are taking much more advantage of our assets, using them in a much more efficient way. It has to do also with some projection that we have in Brazil where we have the possibility to have some better costs, especially on the forest side. I also have -- we are seeing possibilities in the Biopackaging business, we see an important room for growing there, especially in some of the products we have Boxboard, a very interesting business and it's growing importantly, even doing this some period where the demand in general, some products are going down, we have been seeing Boxboards stable. And even -- and also considering that we -- what the Softys is doing, Softys is growing in a very, I would say, a key market for CMPC. We defined years ago that Brazil is a strategic market for us in Mexico and I would say the plants are -- have been successful in terms of that we acquired interesting companies for growing in those countries, for investing. We are integrating them, as Jorge said before, but I see opportunities for improving those businesses with wood brand names and -- so in general terms, I would say that we have calculated that there is some room for improvement in terms of margins because of this combination of things.

If I made a follow-up question on pulp and the markets. You mentioned that there's a lot of uncertainty in terms of demand and particularly, while in Europe, there could be demand destruction eventually. But China, do you think there could be an offset due to easing zero COVID policies. Do you think that would be an offsetting factor? Or wouldn't it be enough if things really turn south in Europe in terms of demand?

Yes, I think the easing of the COVID restriction is relevant. I think. The base case, I think that most analysts are using and we are following that is that China will kind of ease starting Q2 next year. If that is delayed, then I would think the economy will be slower for longer time and then the demand will probably be affected. That's the base case that the analysts are using.

I have another question from the audience. As you're all thinking of more questions. What is going to be the commercial strategy for the incremental volumes of the BioCMPC project?

Yes. I think we'll have a good customer base, very diversified around the world. So for the moment, we don't have to be chasing new customers we're always open to new customers. But in general, we are seeing good demand. So I think we believe we can place that volume within our existing customer base following our strategy, which is follow very diversified between segments and also between geographies.

Any more questions? Everything very, very clear.

Well, thank you very much for your questions, for your comments, and we really appreciate the opportunity we had this time with you, we are really happy about duplicating this mill. Hopefully, you have the opportunity to visit the mill when -- with the project finished. Unfortunately, there's a lot of different movements around the mill today. It's not probably very clean in some areas in terms of having -- there are some operation of constructions and movements of machinery there. Just to mention to you that, for us, was really interesting this -- all this year because -- it's not easy. We talked a little bit yesterday about that, those projects are really spread it out of the mill. So it's not just in any particular place of the mill. So it's not easy to run them, to build, affecting many areas of the mill without affecting the normal production of the plant is a big challenge. So we have been really, I would say, successful in doing that. We still have a year ahead of us for finishing this. But probably this year, we could have a record here in terms of production for this mill without affecting people, without affecting the community, all these movements, more than 3,000 people have come here and for the construction process. So just to mention that. I'm sorry because we have a lot of movements and -- but it's important for us that you see also a construction. Thank you very much.

Just to finish, I would like to thank Mauricio and all the team of the plant for producing this, especially with all the work they have outside doing this is was not, is not that easy. But so Mauricio, I see shadow over there. So thank you very much for doing all this, for your help and for being so welcome. So thank you very much, and thank you all for joining us. It is great to share what we are doing and what we are doing specifically here at the plant. So thank you all. And hopefully, we have a good match later. Thank you.