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

I was tempted, but don't worry, I'm not going to sing. Welcome, everyone, to our Puente Alto mill. This is where everything started 104 years ago, La Papelera, the way CMPC is now, started here. Actually, at that time, CMPC was not a forestry company. The paper we produce here, as you could see in the videos on the entrance, were produced with straw. It was a completely different business in that sense. This was -- today, we see the -- you saw this plant in the middle of the city that brings a lot of complexity and challenges for the operation. But in the past, it was not that way. This was in the middle of the countryside. And the only way to get here was by train. We actually had to build a villa -- a sort of town where we can lodge the workers the same way you see today in the mining industry, for instance, in the north of Chile. So there's a lot of history here, a lot of historic buildings. This is a very important site for CMPC, and we are very happy that you can be here joining us today. As we have done it in the last couple of years, today, the stars are not going to be the finance team. You meet us all the time. The idea is you can meet today other executives of the company that can share with you what we have been doing during the year and where we are going forward. So with that, I would like to start thanking the people from the Puente Alto mill, Alfredo Gili, the Manager of the business; Javier Busch, that is around there, the Plant Manager; and all his team that has helped us to put this together. And now I will hand over to Francisco Ruiz-Tagle, our CEO, who will start the presentation. Thank you very much.

Well, good morning, everybody, for being this morning here today. It's a pleasure for us to have you -- all of you here. I just -- I want to start saying first that we have organized this Investor Day in a different way compared with last year. We will present the business of Softys in a separate way. As you know, we have been working since I would say, 6 years ago and making Softys more autonomous. Because of its nature, it's a different business. It's a consumer product business. It's a B2C business. So we have been in a way -- in some way, separating some things of the Softys business from CMPC. So we have a special presentation for Softys because we want you to understand or to know in much more detail the Softys business compared with the other years. It's important for you to know more about Softys. And so its CEO, Gonzalo Darraidou, is with us today, and he will present in much more detail compared with other years. And I will present in the first part, CMPC -- the other business of CMPC, basically Biopackaging, Pulp and other initiatives that we have. Also, will be here, Constanza Arjona. She is the P&O VP of the company. So she will present especially the chapter of talent. Also, will be here Bibiana Rubini and Bernardita Araya. They will present the growth and innovation chapter. And finally, our project Natureza will be presented by Jose Antonio Correa. I also -- I mean, I will mention about all of this in my presentation, but in more detail with them, okay? Well, first of all, I will start speaking a bit about the year 2024. Last time we met was in October '23. And of course, several things has happened in the company during these years -- during the year. An important issue for us this year was the initiation actually was at the end of the last year, but after our Investor Day of BioCMPC. BioCMPC is a real, I would say, important project for CMPC, not only because we are increasing our capacity in 350,000 tons. But because of a -- this is a project that is adjusting our -- especially our sustainable goals. I would say also, it was an impeccable execution in time and budget. So it's a very well, I would say, it's a good example about the way we are working in our project. We feel really comfortable with our project team. As you know, we have important challenges looking to the future in terms of project. And also I want to remark the resilience of CMPC. As you know, we had a big important situation with the climate in Rio Grande do Sul this year. And it was a really complex situation for -- first of all, for our people. The floods were extremely high. Sometimes we are far from that place, and you don't imagine the situation, how was there. And we never stopped basically the mill. We had to reduce for a couple of, I would say, 2, 3, 4 days, basically, the operations. But at the end, we did not lose basically production. And so this is a special -- a very important situation for us. And is a special recognition for our people there. And so I wanted to [ transmit ] you that because -- today, because of the climate change, we are facing many, many times unexpected situation connected with the climate. And so you have to solve that. Some important decisions. We decided this year to initiate an important, I would say, project. We are at a very initial -- at the very beginning of this project with the first studies of the project. And in this moment, we are -- we have presented -- starting the presentation of our environmental studies in Rio Grande do Sul. We will go in more detail with this project, but the idea with this project is to have this approved, hopefully, in the year 2026. It will take probably 10 more months in having the sense of the[indiscernible] on the project. And then -- so -- but we are very concentrated and working with our team and with the local authorities in having a good connection for all these studies to look into the future. I will start also speaking a little bit about the strategy, the 2030 strategy. We have continued with our strategy. As you know, our purpose is to make natural fiber for a better future, which is very important for us because we have aligned our initiatives around this main sentence. And going through the pillars, sorry, we have shown you this before to you, but the idea is to remember this. This is our strategy. And I would say it's a strong strategy. We go over 5 different pillars, which are sustainability, talent, customer, competitiveness and growth and innovation. And everything that we study, every project that we start the discussion, the way we organize the company, the way we organize our offices, the way we organize our people is really well connected with this strategy. And I will go a little bit over some of these pillars. And with my team, we will show you what is happening here. The first pillar I want to talk about is sustainability. And in this pillar is every time it's happening many things. This has been a very strong pillar for us. We put a lot of attention on this because we understand this industry as an industry that has a core business very much connected with what the world is needing today. So we believe that our products based on natural fibers, renewable, recyclable are very much connected with what the world needs to get these big goals about Net Zero or solving the climate change problem. And also, it is a very important pillar for us because of the social aspects. This industry is located in many different places because of the forest. We have -- we are in different countries. So again, in these aspects, we are also starting and defining important decisions. Just to mention some of them, this year or after the last Investor Day, we have inaugurated some parks. We call -- this initiative is called Bosque Vivo and we have opened parks in different part of the regions where we have our operations. The last one is the inauguration of -- not last one actually, but inauguration of Pumalal Park in Temuco, is an important place for the family, for sports, for visiting this place for everybody. But we also inaugurated recently a different park in Loncoche in a different area. And so very -- this initiative has a lot to do with opening the forest [indiscernible]. We also launched our strategy of nature, conservation and biodiversity. And this is very important because again, as I mentioned before, our industry, our activity is very much connected with the nature. And when I speak about the strategy, it has a lot to do with taking care of the nature. But not only taking care of our nature, but also with the initiative about influencing other places connected with us. An example of this, for instance, is we are working in something that is called Green Corridors where we are connecting different places of the forest. You do have an idea different places with corridors. And these corridors, we plan basically a native forest. And when you connect these corridors, biodiversity -- the biodiversity of those places start being much richer. And it is important for you to understand that the -- this is an initiative that is improving the nature in this country, in Brazil, where we are. Improving I say, because there were places that were disconnected and not -- and this is not because of the forest activity. They were disconnected because of the erosion of the past, because of many different things. So this is very well appreciated today for the climate change people. And so we are putting in a lot of attention on that, and we have a lot to do on that. Those corridors, when I mentioned corridors are long corridors, hundreds of kilometers of corridors where you can create a place for the flora and fauna to move between one place and another place. Another aspect of our sustainability, I mentioned social is the educational projects we inaugurated in Nacimiento. Now is operating normally, and we -- actually, we agreed an association between [ Universidad Catolica de Chile ] and CMPC for building an institute. And Nacimiento is a very important place for us where we have our main operations in Chile. And so those places are rural places where the people have not too many opportunities for their education. And in order to avoid separating families and moving people from those places to big cities in Chile, we agreed on this initiative for having this institute. I'm very well connected with activities of those places of that region. And this is what is -- we believe is very important in Chile because you need experts. In the past, we used to have -- bring experts from other countries for several activities in the forest industry, and we don't -- hopefully, we don't want to do this. I wouldn't say anymore because you're doing some expert but to reduce these needs looking to the future. So working a lot on that. Today, the institute has more -- close to 400 students, which is a lot for these kind of places. And we will continue with this initiative. CMPC was also -- in terms of sustainability was recognized as a company very sustainable in the world. For us, it's a really -- we feel real proud actually about being top -- #1 in sustainability in the paper and forest sector. This recognition was made by Dow Jones Sustainability Index. And we have been working very hard, I would say, not only doing as best as we can our operation, the things we do, but also being transparent, as we really are informing about many different -- all of our basically details in our operations, in our commercial operation, in our international operations and what the company is investing as transparent as we can. And so this also has been very welcome for this kind of institutes. This year, we improved our -- it's not still, I would say, the formal information about the Dow Jones Sustainability of the Year is not still informed, but that we noticed we increase in our -- we did better this year compared with the last year. Our score is better. We don't know where our position. So we -- I cannot talk about that. We don't know that. But I believe we continue working on this aspect. And so this is an important recognition from a third party, very well recognized around the world. Working on the nature, agenda, I mentioned before. Well, as I mentioned before, the agenda of sustainability continued very strong. And I will give you some examples that we are doing today. I mentioned Pitao already. I mentioned Bosque Vivo. And also, I didn't mention something that is very important. The forest industry is also one of the, I would say, good opportunity that we will have for capturing carbon, and we defined a place in the very south of Chile in Aysen for about 26,000 hectares where we used to have some plantations there of different species, but we decided to keep this place just for Carbon Sink. So this is a -- we say this is a Nature-based Solutions. So continue working -- so taking care of the nature in Carbon Sink. So all this is part of our strategy. In terms of our progress in sustainability, we have some goals. Some of them for the year 2025. Others for the year 2030. For the year '25, we have basically 2 goals. One is water, reduction of 25% of the water we use in our processes. And the other goal we have there is to go to 0 waste to final disposal. And I would say we are going basically really well, basically in the final disposal of waste. We still have some challenges in water because for reducing water, you need to improve your processes and also invest, and we are doing both. My impression is that we will get our goal, but still have some space there for improving. And the other important goals we have, one is emissions. In general, the industry around the world is very concentrated in reducing and mitigating emissions and we do the same. And we -- our promise is for the year 2030, reduce in 50% Scope #1 and 2 of our emissions. We are running, I would say, really well in that and with important accomplishments of our goals. In conservation and biodiversity, we announced that we will increase in 100,000 hectares in native forest -- in nature of forest. And we already have 90,000 hectares now. So we are very well on this. And probably, we will have to take -- to see again this goal because we probably -- we can do more on that. So -- and 90,000 hectares that we have today for you to have an idea is like the size of Chicago, twice of Philadelphia, 2x of Santiago. I mean it's an important area for you to have that idea. We also are advancing in our value chain in terms of sustainability from the sourcing. We're taking care of our human rights, labor practices. We have -- we produce -- everything we produce is with certified forest, FSC and PEFC. Those certification has to be with a sustainable management of the forest. We also have a decarbonization road map. This company is already committed for being net zero by the year 2040. 10 years in advance compared with the -- in general, with the call that United Nation made. So we -- this is our target, and we feel comfortable with that. And of course, client engagement, it means in terms of sustainability, I have to say you that we are very sensitive about what is happening with our customers. And so we want to be really a solution for them. And so this is not obvious. Sometimes you don't understand very well what is happening with your customers, and we have been working really hard in connecting with them and understanding their sustainability goals because most of the companies we have in Europe or in Asia or even in Latin America, they have important goals. And so we have to be with our product and solution for them. So a lot of connection in that aspect. Now we call Constanza. She will take -- look up the talent pillar, and I will be back here with you, okay?

Thank you, Francisco. Well, in this case, and as we were talking a little bit about our strategy, you can imagine that one of our key enablers of having a successful strategy and really achieving the goals that we have, is talent. So we have been actively working in terms of investing in talent management capability and also working to have a culture that supports empowerment and impact. Of course, this is a journey. This is something that will not happen from one day to another, but we need to pursue on that. So in this case, of course, having the talent management capability, and having the supporting culture that help us, of course, to accelerate leadership, foster development mindset and of course, connect the organization for growth and improvement. So we are prepared for the growth and the competitiveness that we need for our 2030 strategy. In this case, I want to tell you a little bit about how we measure and how we are working with our talent pool. The first part, of course, is mapping. So it's understanding who is who, where they are, in which position of our value chain are the critical roles. And of course, also identifying those people that are the HIPOs that we call, that it's the high potential people, that we have in the organization. And as you see, we have been growing this amount of people, especially in the HIPOs or the high potential people that we have. The reason behind that is not just developing our internal talent. It's also attracting new talent. So this is part, of course, of managing our talent to have and support our 2030 goals. In the other hand, also, it's important to really have a sustainable organization in terms of succession planning. So we need to take care of the organization, of our business today and also take care of what is coming in the future. So the first part, of course, is working in terms of improving our succession planning but also giving the opportunity to our high potentials to the people that are leading in terms of development, in terms of performance our high potential. So we need to ensure that those people have the opportunities to really grow in the organization. But of course, this is just measuring. And one of the key things that we have been working for almost 3 years, is how we really build a culture that supports this engagement. That supports the kind of organization that we need to have in terms of achieving the goals for our 2030 strategy. And we have been working in the engagement. In the engagement as a very important enabler to have engaged people, engaged teams to really be successful on the goals. So you will see here that we have the average that it's 3.8. But the most important thing is the engagement ratio. This is that we have 3.1 engaged employees for every actively disengaged employee. And this is very important because the last survey that we had in 2023, this ratio was 2.1. So it's important to have engaged people. It's necessary but not sufficient. You need to have people that it's engaged, that it's committed with the goals that the company has. But also, you need to have a management system, an organization that works and it's very well connected with business results. So that look for us and in the last graphic, you will see that when we go to teams, we have been also growing in the top quartile and that is very important because the amount of people that it's engaged in some of the team, it's growing and growing really fast. So that motivates. That is engagement. And that it needs to be, as I mentioned, really well connected with business results. People engage but without business results, it's not an achievement. So for this, also that is something I think it's important to mention is that to work on engagement, we really need to focus also in leadership. In a company that has such as -- the goals that we have and the growth that CMPC has for 2030, we need to really work on leaders. And leaders in this case, play a pivotal role for the cultural evolution, of course, are the shadows are the one leading, but also are the ones shaping the behaviors that we need to really have a sustainable organization in the future. So in this field, the leadership capabilities that we have been focusing on is, of course, based on our strategy. The kind of leaders that we need to, of course, with this -- with the strategy goals, connected and very well connected with the business results and also, of course, to have a management system that support this. So as I mentioned at the beginning, it's not just about having engaged people. It's also engaged people that are well connected with a management system that makes sense and gives us a sustainable organization for the growth. In this year, I wanted to mention that we have been really working very hard in 1 leadership program that it's focusing on these 5 strategic pillars in our competency model. This is what we look for in a leader. This -- and in the different levels of the organization, it's not just the executive level in our mills, in our support areas and so on. And we want to build capabilities that are really looking for a company that has and has big goals as the one that Francisco mentioned at the beginning. Of course, the capabilities need to be very well focused with systemic view, with accountability. With the learning agility nowadays, it's critical to have and to learn and change and adapt in a really fast way. So the idea is, of course, trying to -- through our leaders in the different levels of the organization, shaping the behaviors that we need for the growth that we are aiming for. So I will pass to Francisco back to let you learn a little bit more about customers. Thank you.

Well, now I will go over the customer pillar. And in connection with the customer pillar, I will mention that this is, of course, a very strategic part, central part of CMPC. Customer centricity is a clear definition as one of the 5 pillars I mentioned before. And it means to work across all the value chains. I mean, from the mills connected with the customers in some way, to our customer, even to the final customers. This is our interest here. And what is to improve the customer experience because we are looking to improve the customer experience here. And it's a -- this is something that is not easy to copy. I would say that it's a coordination. A coordination from the beginning of the supply chain to the end. It is a process that takes years to be adjusted. And also to have the organization's culture for supporting this customer centricity, especially being an industrial company, more a B2B company. We -- as I mentioned before, one of the goals we have defined very strongly in the company is to connect the sustainability goals of the customers with our sustainability goals. So be really in 1 line. And I'm really understanding very well, as I mentioned before. And the other thing we have done, and this is probably -- it's different when you compare this with other companies. We have been advancing and creating joint ventures with the companies that used to be distributors from CMPC in other continents now are our partners. And for instance, this year -- last year, we started in January operating this. We created a joint venture between International Forest Products, which is a very -- is a well-recognized distributor and operator and the paper -- pulp and paper industry in the United States. Now they are our partners. And why is this? Because we want to be closer to our customers, to the final customer. Same thing we created in Europe based in Hamburg in the year 2020, where we created a joint venture with GUSCO Schurfeld which was a -- used to be an agent for us. So this means that CMPC day by day and in different places, going closer and closer to our customer experiences. And this is not the same way for every -- this way -- not every company operating this way. The other thing we have been also working with our clients is in developing innovation. I mean, a variety of different kind of pulps because in this industry, you want to be in some way different -- you want to be differentiated. And so different kind of pulp. In the case of wood or boxboard, for instance, again the same thing, different kind of good innovations are very important. And speaking about some trends that are happening. For instance, in packaging, there are some macro trends. Most of you know about them by digital immediacy Sustainability is a critical requirement from our customers today so well-being as a priority. Adaptable boxes because of the e-commerce, the solvent packaging among other innovations. So basically, every day, day by day adjusting our production, our programs for our customers. And it means today for a company like this, a big heavy industrial company, be able really to adjust the way we operate to the real needs of the world we have today. Especially looking to the future, we always say that the company is looking in the next 100 years. And also, we are -- this is the reason why we are, in general, thinking really in the future. And wood products, for instance, is also a great opportunity for us. We understand that. We understand that we have an important demand for our wood product because of the replacement of the fossil fuels. So you see what is happening with the construction industry in general in the world, is very much interested and concentrated in including more materials based on wood. And we see an opportunity on that. We have plans on that in our strategy. This industry play a core role. I would say, in the case of Chile, for instance, in general, Latin America, no more than 20%, 25% at the most of the construction is based on wood compared with the northern hemisphere where you see in the United States, Canada or Scandinavia, even -- I mean, places with really extreme climate situations using wood in a very important percentage, probably more than 60%, 70%. So there is a lot of room for responding to that trend. If you see the long term in the case of pulp, what we are seeing is that the use of pulp for tissue products in general is increasing importantly. In our case, we estimate that probably 47% of our volume it means an important percentage of the pulp volume will go probably -- it's going to the tissue industry and probably going -- increasing. So this is important -- again -- and also Specialty and Packaging. Specialty paper that are used basically for construction, I mean, many different uses, in car construction and different industries and also packaging is also increasing. I mean those are the 3 main drivers for pulp producers today. Printing and writing is also a driver, and some are still a driver but declining. So you don't see the future of this industry in printing and writing. When you see -- speak about the long term, long term, not really long term, but looking to the year 2028, 3, 4, 5 years probably, we are expecting an increase in demand of about 5 million tons in this period. And the production -- and it means that it's basically in short fiber. It's around 11% of increase in short fiber. And when you see the market pulp at the year 2028, most of this, about 63% will be short fiber, not softwood. So we see more project, of course, in short fiber basically in Brazil. So by the year -- again, another figure, those are estimation by the year '28 since the demand will increase in a less proportion compared with the supply of pulp, probably we'll see some extra capacity in the market by this year. In the short term, what is happening with the prices. Well, you know during the last second -- at the end of the first semester, second quarter, prices basically declined importantly, mainly driving by China. China stopped buying pulp for some months -- some weeks. Now we see that probably -- we don't see further decrease -- considering basically that the cost of pulp even for China as more or less in the lower is not probably possible for reducing prices compared to what we have today because the cost that we have today is a bit high. So we don't see China. This is an expectation, but you never know. But basically prices, we don't see probably important price increases during this year because basically influenced by -- for the demand side more, I think, because we don't have extra capacity in the near next month that we have today. Actually, we have -- what we have actually -- we have an extra capacity, I say because we have Suzano, and we have Liansheng, 2 projects going into the market in the next month that will be affecting in some way prices probably for the next month. You see duration of production in short fiber. By the year '25, our calculation is probably the -- this ratio, the demand -- we will have an extra capacity during the 2025. Probably the ratio is 88% where probably the most healthy ratio is about 90% or 91%. We have 88% of the total production capacity use. And this is because of the extra capacity that is entering the market, basically because of Suzano, Liansheng in the next year. And then we don't see extra capacity for some years. In the case of softwood, what we see there is basically a more balanced demand supply, about 90% or 91%. And we don't see important projects for now. And so basically, what is -- what the movement of the prices [ wood ] would have a lot to do with the probably mill disclosures -- mill closures or disruptions in general. And this is what I have today in terms of customer. Now speak a little bit about the competitive pillar. It has a lot to do with cost. This is cost. And we have been working -- our definition here because we understand this future with an important competition. We understand that we have to really know state-of-the-art in terms of cost. And we have been working very focused on that. We define to be in the range of -- in the first 10% of better cost in the industry globally. And it means important efforts. It means alignment. And we have defined 10 different goals in terms of cost for getting these goals. We are working in 3 verticals. One is operational excellence, of course, leveraged by technology and innovation. Optimization, our procurement processes, purchases, contracts, working again with, I would say, a lot of definition on this. And agility and all of our administrative processes throughout the value chain. So I would say those are the main definitions we have. What does to be P10 truly mean? What does that mean? So as I said, we define concrete targets. 10 different challenge that we have to -- different areas that we have to unlock in the company. And we created a system that we call Competitiveness Contracts. And we have specific contracts for every goal, specific contracts. The contract is between the competitive division we have and in a specific area. That could be an aberration in the commercial side, but basically looking for being better in cost. And we are working on pulp, production, energy, chemicals, maintenance, basically, very concrete different cost dimensions. Raw materials, for instance, the wood we use in the processes. So in every of these dimensions, we have very concrete goals. And this kind of Competitive Contracts formally signed in different areas of the company. And at this moment, as of today, I wanted to transmit you what is happening with this initiative, but this is very important for our company. In the case of the pulp production cost, with all these contracts I mentioned, we have been -- if you see the chart of my left at the end, we take as a year base 2023 for this and what is happening this year, we are 93% of what we were in 2023. We understand according with our research that we have to reach to 82%. It means taking the figures of 2023, we should reduce our costs an 18%. What is happening today? We have reduced $87 million when you see all our reduction in costs, but it's still 7% down, and we are looking for more. What is happening with the -- with boxboard, for instance, which is another very important business for us. We started in '23 at 100%, we are now 95%, still room for improving. $7 million in savings when you see the last year. But this is just an example. Some example for you that we are measuring this with a lot of details. What is happening in -- for instance, in forestry. You see the cost of forestry, which is our base is crucial for our operation. We are 12% down compared with the year 2023. It means $38 million, still room for improving. We understand that this was an important correction, but we see still spaces for improving in different areas of silviculture or operations or transport. When you analyze all these aspects in detail, you find important spaces for improving. And now we're going -- what we're doing today, we have to close our gaps, as I mentioned before. And what is the way we close our gaps? It's with flawless operations. It means we created a Center of Organizational Excellence, COE, and we have a management system called Best, that are working -- spaces for working on improving. And what we're doing there, achieving, I mean, efficiency, innovation that's an important vertical. All of them aligned with our strategy. Driving organizational performance, foster a culture of continuous improvement, achieve sustainable success. I mean, different initiatives that we are working on today. On the production front, I would say that we have gone -- we have get, I would say, very good result in our Guaiba facility, for instance, was an important place where we have been advancing with all these initiatives, still place to improve in our Santa Fe mill. Santa Fe, we are putting a lot of attentions. And we are working, for instance, for you to understand our business, working in a better connection between the forest and the mill. This is not obvious at all. We need to supply the right wood and at the right moment without creating extra inventories. So the forest mill integration is fundamental here. Again, forestry operation and the fixed cost, as I mentioned before, is crucial on this. I'm working with initiatives in all of this. Maintenance. Working here in the Mill of the Future. We have a very concrete objectives here. Basically, including artificial intelligence, digital tools in general. And our, I would say, dream is to separate more the big maintenance period, one from the other. Especially the pulp mills stopped for a long maintenance period once a year. And of course, if you are able to include in these kind of tools, you're able to extend this period between one maintenance and the other one is good. We are putting a lot of effort in analyzing this with technical people and doing this in a very professional way. And well, finally, I want to mention that, of course, we are also working on reducing the SG&A. And we're very much concentrated in improving processes and continue doing that. I mean, making a company more agile and hopefully, a company more efficient, especially in this kind of processes. This is what I had to -- I was -- I prepared for you today. Now I will just pass -- I will pass the word for -- to Bibiana Rubini, Bernardita Araya for the chapter of growth and innovation. And after that we will have here the -- a special presentation for the Natureza project. And finally, on special space, as I mentioned at the beginning, for Softys. Thank you very much.

Okay. Francisco made our job very easy because we've been hearing about innovation all along his presentation. That's why we wanted to start our innovation talk going back to the strategy because we heard about innovation in sustainability goals, water, residues, emissions reductions. We've heard about innovation, decarbonization, new products. What else? Customer centricity in competitive and as we heard innovation in the middle of the future, integrated operation center, online forest operations, right? Innovation is a pillar itself, but it's one that integrates all of our goals, all of our operations, all of our strategy pillars. Innovation, inside this pillar, there are the initiatives that will help us grow closer to our customers and find innovative new business opportunities and most of all, help us grow beyond Latin America. Innovation for us is to maintain and improve what we already do best, our business as usual, but we will also generate optionalities for the future because it's very responsible not to do so, right?

Absolutely. And the thing is innovation can take many phases. Here on one hand, we have General Electric with his iconic CEO, Jack Welch, that's been the driving force behind Six Sigma, and this focus on process improvements. And another side, we have Microsoft, that is being focused on product functionality, innovate every single day and bringing new products out in the market every single year. How have the products evolved? There we have General Electric, where the products have evolved. They're broadly more efficient. They do better what they do best, but they look and feel roughly the same and solve the same problems. On the other side, with Microsoft and in general, the technology companies, they have changed the world and the way we live, new processing capabilities, new storage solutions, connectivity, immediateness. So what has this to do with CMPC? How do these companies [ drive ] what we do? These 2 companies were driven by innovation, one on the incremental approach and one on the disruptive innovation. The thing is, what's it from CMPC? We need successful companies today, need to find this balance between disruptive and incremental innovation. It's imperative to do so. And in our industry, that's been mostly focused on process improvements, which, well, as [ Bibi ] said, we have to do better what we already do best. But we have this opportunity here. The thing is it's not only about innovation. Our industry faces so many challenges that require this multisystemic approach. It's energy position, it's communities, it's forest, it's we're taking better care of the forest. It's the supply chain. It's talent. The thing is when you work with the forest, you are part of the forest. So we are part of these challenges as well. It's land use, water consumption, energy transition and new bio-based materials. And Francisco mentioned something a little while ago. What is the world demanding? New solutions, new products that can help reduce the use of fossil-based materials, for transport, construction, materials, packaging and many uses. And what does our industry produce? What does CMPC produces? Sustainable certified biomass, sustainable fiber that already travels all over the world. So this is not just only an opportunity for new products and new markets. It's just a responsibility because we are part of this forest, and we can bring more value out of this forest. There's a tricky issues here. Can we wait while a tree grows? Certainly not. The trees we need, the fiber we need for these future applications are being planted today. So we need to find this balance between incremental innovation and this disruptive approach. And this is the called ambidextrous innovation approach, exploration and exploitation. This is not new. With exploitation, we will focus on incremental improvements that will lead to efficiency and profitability. But on the other hand, with exploration, we will be venturing in uncovered territories, new. This is experimenting ideas, experimenting technology, business models, new products. By embracing both exploration and exploitation, we actually have improvements on the offerings we have today. We maximize the value of our portfolio, and we plant the seeds to potential new business. Understanding the complexity of ambidextrous innovation actually lead us to improve our innovation program. We are now 4 groups. We are now 4 groups, innovation at the core, R&D, digital and ventures, working aligned in the same direction, delivering a lot, as you can see by these numbers. First and most impressive to me, we have more than 250 people dedicated to innovation at CMPC. We have launched our venture client program this year already with 11 challenges and 1 adoption moving this year. We have restructured our R&D, transversal, working the same group all the way from the forest to new products, new businesses. We have collected more than 2,000 new sites in this company with our beyond project programming here. And the most impressive number probably is our innovation fund of $100 million, out of which $20 million already invested in 6 start-ups. Tell us about that. So here's our company's portfolio. We have Nordic Bioproducts Group in Finland that has developed a new technology to produce microcrystalline cellulose. We have Pulpex in the U.K. They produce water bottles based on pulp that can be used for several applications, and they develop these alongside leading brands from Europe. Woamy from Finland, a very young talented company, that has developed a substitute for polystyrene that can be used for packaging applications. This is edible. This is recyclable. This is repulpable. Boxia is a company-building initiative that is operating in Mexico as the marketplace. Strong By Form, a Chilean company that has developed this additive manufacturing approach for wood that can produce lightweight solutions for construction. And Modvion, which is in Sweden, that produces wind towers -- sorry, towers for wind turbines made out of wood. So are we stopping here? Absolutely not. And we have a clear and very structured view of where we want to go. This is our innovation road map. In this innovation road map, you can see that we continue investing in our horizon 1, which is business as usual, and even going a little bit further in horizon 2 in adjacent territories. This guarantees that we increase, improve and make always better our current business, but that's not all. Of course, and we're going to keep exploring these new markets, new solutions for smart forestry, packaging, construction and working together with R&D, with digital, with innovation, driving and pushing CMPC to go even further. Thank you.

Thank you. And now -- well, it's our pleasure to introduce Jose Antonio.

Good morning to everyone, and thank you to be here. I'm going to talk a little bit about our Natureza Project. Natureza, it says here, we are seeing to have an integral approach that combines industrial productivity, sustainable and associative forestry, conservation and cultural promotion. So for us, Natureza, it is not only a new pulp mill, it is a more comprehensive project. So looking at some numbers, the gross investment of these projects is around $4.5 billion. We will talk a little bit more about what includes. We are thinking to produce up to 2.5 million tonnes of BHKP or short fiber cellulose. We are looking for -- present this project to the Board of Directors by mid-2026. CMPC has a very strict process in order to approve a project. So we have to have all the engineering done at [ Plus 10 ]. So a lot of engineering, a lot of work to be done before presenting this type of projects to the Board. And hopefully, you have the start-up of the project by 2029. So what are we looking for this investment of $4.5 billion? When we talk about the Natureza Project, we not only talk about the industrial investment inside and outside the fence. But we are also talking about land and port infrastructure, forestry development value in terms of considered gross taxes, electric lines, road access. So we are talking about all the infrastructure that you need to produce this 2.5 million tonnes. Sometimes you see different numbers at different projects. And at the end of the day, the difference is what you consider in order to not only have the industrial investment, but also all the other investment necessary to produce this amount of pulp. So what are we looking for this project? We are looking to be a benchmark in cost and sustainability. And in order to do that, in terms of cost, we want to have a state-of-the-art mill at a very efficient scale, located at the best location. We are going to talk a little bit about the location. We will have, or we have high forest productivity and very, very efficient logistics, synergies with our Guaíba mill. We are going to be located around 25 minutes from Guaíba mill. So you can combine and you can have synergies in terms of chemical production, maintenance, spare parts and so on, process automation, integrated operations. We are thinking about having a central operation center to operate both Guaíba and Natureza mills at the same location. But as I mentioned, we are not only thinking about producing pulp. We want to be a global benchmark in terms of water use. We are thinking that this project will use less than 20 cubic meters of water per tonne that is going to be a world benchmark. We also want to decoupling our production with fossil fuels. So we are thinking, for example, in having a biomass gasifier in order to avoid burning fossil fuels for our operation. But we also want to support local communities. We have a special interest in working closely with communities such as Barra Do Ribeiro, which is where our mill will be located, Guaíba, the Rio Grande do Sul community, Rio Grande port, Pelotas and so on. In terms of job creation, this project should employ around 12,000 people during the construction phase and around 1,500 people direct jobs during the operation phase. So in terms of location, we chose a place that is called Barba Negra. Barba Negra is a farm owned by CMPC. It's a big farm. It's a 10,000 hectare farm that is called 25 minutes south of GuaÍba. And why we decide to locate the mill in this site for many reasons, but I will try to explain a little bit more the main reasons. First of all, low uncertainty in construction. The quality of the soil is very good, which allow you to invest less amount of money during the construction phase, but also have more sensitivity during also the construction. The mill will also be located in a kind of a hill, a small hill, which allow you to avoid any type of risk of floods. As you may know, during May, we had a very complicated situation in Rio Grande do Sul that affected many communities. So we took a deep look about how possible floods could affect the project in the future, and we locate the mill in area where it will not be affected. We also looked at environmental permit feasibility. We are working on that, and we think that we will obtain all the permits without major problems. Low impacts in neighbor communities. The mill is going to be located in the middle of a big farm of CMPC. It is going to be surrounded by forest of CMPC, which are a kind of green wall to avoid any type of problems with local communities like odor, noise, typical problems that you can face during not only during the construction, but also during the operation phase. Water availability. We are near the Lagoa dos Patos with a big amount of water. So that problem is solved. Favorable CapEx and OpEx. I'm going to talk a little bit more about that. Talent accessibility. We are very near Guaíba. Guaíba is a midsized city with over 100,000 people. And we are also in front of Porto Alegre, which is one of the largest cities in Brazil, and we will have water transportation from Porto Alegre to Barra do Ribeiro in order to be very near our possible employees. And also, as I mentioned, opportunities with synergy with Guaíba. Again, maintain spare parts, chemical production, head count, which allows you to have a very efficient operation. So this project is based in 4 pillars: sustainability silviculture at competitive cost, logistic infrastructure to be very competitive, environmental and cultural conservation and also advanced industrial operation. So in terms of silvicultural operation at competitive cost. As you may know, Rio Grande do Sul is an agriculture state, and we want to work together in partnership with local farmers. CMPC already have a forestry base there. We have been increasing our forestry base during the last 4 or 5 years, but we want to work very closely. So we developed a program around 2 years ago to work very close with local farmers. We want to be an alternative for them to diversify their income. So they can continue raising cattle or planting soy, but also having the opportunity to have eucalyptus plantations. This not only wants to strength the local [ Gaucho ] culture, but also in terms of return of investment assets make sense because you have to invest less amount of money in land. So I think it's a win-win for CMPC, but also for local communities. But what are plants that also have Rio Grande do Sul state is its forest productivity. Rio Grande do Sul is one of the most productive states in terms of forest we have our MIA or EMA of around 42 cubic meters per hectare per year, which is very productive when you compare with other states, for example, Mato Grosso do Sul that has like 32. So that allows you to produce wood at very competitive costs compared with other states. In terms of logistic infrastructure, we want to take advantage of all the infrastructure that we already developed for Guaíba. As you may know, we moved all the pulp from Guaíba mill to Rio Grande port in barge, which is very efficient. So even though you are around 300 kilometers from the port, transportation cost is very low. And this also gives us a competitive advantage when you compare with other states or other projects that they have to move their pulp around 100 -- or around 1,000 kilometers by truck or by train. And we use the barge, which is very cost efficient. And after the barge leaves the pulp or the port, the same barge moves to Pelotas, which -- it is a port very near, and we load the same barge with wood, and we transport all the wood from the south to the mill at very competitive cost. And this is not only competitive in terms of cost, but it's also very friendly with environment because one barge replace over 100 trucks. So this is not only efficient, but also reduce the amount of CO2 that you produce during the whole process. But as I mentioned, we want also to contribute to our local communities. The idea is to create a -- in Barba Negra an ecological park. We already have over 3,000 hectares of native forests. So we want to give access to the local communities to the whole site. We have a historic house, that is a historic heritage of the region. So we will open this house to the local community. We will open our nursery. We will also have an ecotrail in order the people to know better the native forests. So at the end of the day, we want to be very open to the local communities so they can visit our operations, look at what we do there and not only visit the industrial production, but also visit the native forest, this historic house and so on. And in terms of industrial production, we want to be, as I mentioned, a state-of-the-art mill with the most advanced technology. We want to be a benchmark in terms of use of water and decoupling our production from fossil fuels. So at the end of the day, we want to be one of the most modern and best mills in terms of technology. And I'm going to show you a small video right now in order to have a better idea of what this project is going to be. So this is the map of Brazil. We are located in the south in Rio Grande do Sul. As I told you, this is going to be located in Barba Negra, which is 25 minutes south of Guaíba. This is going to be located in the middle of the forest of CMPC. So we will have a kind of a green wall to isolate a little bit the mill and avoid any possible problem with local communities. Here, you can see a render of the mill, with its fiber line, the [ cooking ] and all the different areas of the mill. There we have a woodyard. And all of this design has been thinking to be very productive, but also, as I was telling you, to be very friendly with the environment. So we will have inbound -- wood inbounds by trucks, where we have in the northern part of the state, we will have to invest in improving a little bit the roads and the access to this specific side. We are working together with the state in order to improve the Port of Pelotas. Around 25% of our wood will be coming from Pelotas in barge, which allow us to be very efficient, as I mentioned, because 1 barge replace over 100 trucks. So the idea is to use the same truck, the same barge that comes with wood from south to know the pulp and move the pulp back to Rio Grande port. Moving all the part at very competitive cost to the port of Rio Grande. We are working in a new port there, an area that is now without any use. So our idea is to have our own private port that will not only use to move the part of Natureza, but also Guaíba. So it's going to be a huge port to move around 4.5 million tonnes in and cover all of our operations. So what is the status of the project right now? We already finished all conceptual engineering or front-ending load 2 Phase. We are moving into right now, the front-end loading Phase 3 or detailed engineering. Then we are also working to -- with the local government in order to obtain the license to operate and build this new port in Rio Grande. We already obtained the terms of reference from the FEPAM, which is the local authority, environmental authority to start working in the EIA or the environmental permits. So that is a little bit the status of the process right now. But we are also working as a whole company in terms of having a very robust financing plan. We are already preparing our balance sheet in order to be able to do this investment without affecting the credit ratings of the company. Fernando can talk a little bit more about that during the Q&A. So that was -- I was going to present about Natureza. And now Gonzalo Darraidou is going to talk a little bit about our Softys business.

Good morning. It's a pleasure to be with you today. And what we want to share with you is our Softys project. It is our Softys dreams. It is our Softys company. Our agenda for today, it's -- the first part is about the dream, what we think, what we believe or what we want to do. December -- around December, November 2017, our Board said to us, Gonzalo and all our team, what we want to do is to create a real consumer good company. What we want to create is a company that must lead in Latin America. We want to take the opportunities that we can see in Brazil and in Mexico, for example. And for that, at that moment, what we decided is we need to build our plan for the next year, our strategy for the 5 years, and that is what we are going to share today. Softys, today, after all of that, we can say that we are a leading consumer goods company in Latin America. We hold the #1 position in consumer tissue at professional hygiene as well as consumer tissue. But most important than that, that today, we can say that we have a solid second position in the Personal Care across our markets. And this market leadership, combined with a discipline to develop our strategy allow us to achieve about $500 million platform in terms of EBITDA. Our power is driven by some key pillars for us. The first one, it's about we need to develop high preference brand. Second, a future of excellence in a superior execution point of sale in a consumer goods company that is totally key when you want to be the #1. The bottle is in the supermarket. The bottle is in the little store close to your house. That is where we have to be the best in class in our categories. A unique regional footprint, and I will share with you in some slides, how we have been building this regional footprint with our last 5 acquisitions in different countries. A deep commitment to care all of our stakeholders, and we say all of our shareholders, and we are going to share with you our project like that we call Softys Contigo. And finally, a deep commitment to understand every day our consumer needs. What do our consumers are demanding to us every day? To do that, we create and we define a clear purpose. And that's it, develop brands to deliver the best care that people need in their day-to-day life and each stage of their lives. And that is because the type of product that we produce. We move from baby care to adult care. We serve our consumer in their whole life. Second, this commitment is reflected our divested portfolio, like I said, essential care, hygiene brands, which are present in everyday lives of consumer. We are a trusted partner from the earliest stage of lifehood, offering comfort and confidence every step of the way. But this purpose must be have ambition or support ambition to develop our project. And that is to be the best in delivering care and hygiene care and hygiene to people in Latin America. When we are talking about Latin America, we're talking about from Mexico to Chile, winning daily preference for our brands. The keywords is daily preference. Every day, we want to be present and have some relation with our consumer, growing with superior profitability by taking care of the future today. To develop this business plan, to develop this strategy, to develop this purpose, at that moment, we decided that we need to build a very strong people. We need a lot of knowledge from the top companies, consumer goods company. At that moment, we were more, I would say, a manufacturing company, and we need to move from there to be a consumer good company. For that, we invite people from the best companies in consumer goods category. I'm talking about from Unilever, I'm talking about Nestle, Johnson & Johnson, Proctor & Gamble, Coca-Cola Company, Heineken. And we invite a lot of people from there for those companies to come and develop the Softys dreams. And more than that, we decided that we need people with talent from different countries. We move -- we want to take out that Chile centric that we had at the moment. And today, we can say that at the top level, we have people from Mexico, from Brazil, from Argentina, from Colombia and obviously, from Chile. So we create a very, very strong people to develop our strategy. We have 3 categories. The first one is consumer tissue. Where we're talking? We're talking about tissue, napkins, paper towels. Second is Softys professional. This is our B2B segment, and it is about how we can serve hotels, how we can serve restaurants, airports, et cetera. And third, Personal Care. And today, we can say that in Personal Care, we hold the second position in this growing segment, in which Softys account for more than 38% of its sale. And I want to be focused on that because this is one of the most important changes that we have been developing in the last 5 years. We have been developing a track record on delivering sustainable growth and financial performance. And here, we can see some numbers. Today, we moved from the second position of consumer tissue to the #1. We can say that we are the leader in Latin America. Softys professional, we did exactly the same. We moved from the second position to the #1 in Latin America. And in Personal Care, we move from the #5 position to the #2 position today. In terms of sales, we are reaching around $3.7 million in the last 12 months. And in terms of EBITDA, you can see that in the last 12 months, we achieved a platform of $600 million of EBITDA. How we can do? We have been done all of this. We defined our business plan for the next 5 years. And in that moment, we define our 5-pillar strategies. The first one, strong brands. Every day, we wake up early morning to develop the most strong brand preference in our consumer. Second, go-to-market excellence. Like I already said, the battle is in the point of sale, and we must be the best one in terms of executing our brand presence in our channels. The third one, operational transformation, we are building a profitable, simple and efficient operating model to drive productivity and agility in our processes. For sustainability, we are committed with our environment and our social responsibility, and I want to show you some projects like Softys Contigo. Finally, like we all know, finally, it's all about to have the right people at the right place. And that is why we say that in Softys, we have a people-centric culture. We believe in empowering our employees. We believe to develop their leadership to take the right decision. In order to connect in a better way to our consumer, we have different type of brand. We have some regional brands like Elite, Elite Professional, Confort and Nova, but also we have some local brands that they are the leading in some markets. For example, we can say [ Eonal ] in Argentina. We can say in Sublime Brazil or Premier in Mexico. And what -- the mix of those regional brands and local brands reinforce our leadership in each country. The regional and local brands mix support us to take some strategic advantage in each country, in each channel and in the relation with our big customers. Now I want to invite to use some to see some video of our Elite brand commercial. [Presentation]

In terms of Personal Care, like I already said, Softys has achieved a strong #2 position in Latin America. And again, we have a very well-known brands. In this case, Babysec, Ladysoft, Cotidian, BioBaby and Affective, among others. And here, our brand equity is driven by create strong recognized proposal driven by brands; second, continuously innovation. In this type of category, Feminine Care, for example, innovation is the key element. And third, ensuring to go-to-market excellent to try to be the best one in every supermarket in every traditional store. I want to watch and -- to invite you to watch a TV commercial for our Babysec brand. [Presentation]

When you talk about go-to-market strategy focuses on winning at the point of sale, you have to define 3 initiatives. The first one is trade in, which means that you need to develop tailored solutions for each customer. The second one, initiative is trade more and across. That is how you increase your consumer base in a daily way, how you invite new consumers to your brand to your new portfolio. And the third one is about trade-up. How every time you try to increase the type of product, so you achieve a better price average. Those strategy is what we have been developing to try to be the best one in execution. We have a unique footprint in Latin America in comparison to all of our competitors. We are running business today in 8 countries, with more than 24 productivity sites, and we are serving more than 17 countries in the region. For example, in some countries, we don't have any paper mill production site, but we're serving. I'm talking about Paraguay. I'm talking about Bolivia. I'm talking about Central America. And if we go in terms of paper mills, today, we are running 36, we have 177 tissue conversion line, and we have 66 diaper machines, and that allows us to optimize all our logistics across all those countries. In terms of transformation, what we have been doing in the last 6, 8 years? First, transforming our end-to-end value change, which means channeling synergy across our supply chain, operations, logistics and sell functions. Looking -- what we're looking? Reducing our cost. Second, reducing our complexity. We have been simplifying our SKU portfolio in terms of products, how we can reduce the number of SKUs that we can offer to our consumer, and we can optimize our revenues in that process. And finally, designing to value, maximizing our design-to-value process, how we can produce the best product with the less cost that we can need. Sustainability. This is one of our main project and Francisco already mentioned, which we take exactly the same goals, and we're working for the CMPC goals. The first one is our 40% reduction in industrial water usage. We already achieved in May 2023. And because of that, we have now a new goal that is 50%. Second one, we are also on track to reach serial waste to landfill next year, ahead of our 2025 goal. Today, 72% of the target already met. Additionally, we aim to reduce Scope 1 and 2 greenhouse gas emission by 50% by 2030, and we have already achieved a 38% of reduction. At the same time, we are working on our sustainability strategic for 2024, 2028, which includes a goal to cut bridging fossil-based plastic used by 50% by 2030. And probably, this is one of our very favorite slides. This is talk about softest Contigo. Our commitment to create extend beyond our products and to the communities where we operate. Softys Contigo is our flagship social investment initiative, and we have 3 key pillars. The first one, water and sanitization, where with a partnership with [indiscernible], we are leading -- that is a leading nonprofit organization, we're investing more than $6 million over 5 years to provide water and sanitization solution. Today, we can say that we have already built over 750 solution, impacting close to 20,000 people, which are -- and on all of this project, we have been doing working with our collaborators and that is more than 2,600 Softys volunteers. The second pillar is hygiene education. And today, we have reached more than 1,800 people through 31 workshops across 8 countries. And finally, always we received some phone calls for timely assistance, and we have been funding more than $1.5 million to help people on those issues. Let me show you a video that, for us, reflect our Softys culture. [Presentation]

How fantastic is to help people to have a better life and that is part of our Softys dream. In terms of employee, today, we're more than 14,000 employees. And we have been working to increase female representation from 18% to 25%, leadership roles for women have risen from 27% to 33% and employees with disability has grown from 0.8% to 2.1%. Our team also reflects Latin America diversity. Today, we have more than 16 nationalities collaborating with us, and that gives us a multiculture environment and help to understand countries like Mexico, like Colombia, like Ecuador. Softys culture drives our success, and we strongly believe of that and I will share values, guide our actions in order to build pride in our company, and Softys program promotes belonging through 3 focus areas. The first one, more human, which means to emphasize a supported work environment. The second one is more agile that encourage flexibility and innovation. And the third one and more impact, which aims for extraordinary results that positively affect the world. This is our cup. You're saying, what you're talking about? Yes, this is our cup. In Softys, we believe that our people make the difference. And in order to retribute that, we established Softys Cup in 2018. Looking to reward the country that most inspire a culture of excellence. In highlights, a country that, through innovation, creative solution, take cares of its consumers, customers, employees, our environment, generate a really positive impact. It is awarded to a country that demonstrates outstanding results, improvements in productivity, profitability and sales growth becoming a reference for other Softys market. I want to invite you to a video about the Softys Cup. [Presentation]

Now that you understand a little bit about our culture, our project, our dream, I want to share to you the opportunities that we have and we see in the market. But finally, in terms of culture or dream, if you want to maintain one word, we want to be the best one in everything that we do. Let's go and talk about our opportunities. Softys operate in a very dynamic market, and we're talking about $18 billion market. If you add the 3 categories. And over the past 5 years, this market experienced a compound annual growth rate around 2.2% in consumer tissue, 4.2% in professionalizing and 5.1% in Personal Care. Rates that this is the key that are higher than the region overall GDP growth. If you want to understand our [ countries ], we always say that we have 3/3 that is Mexico 1/3, Brazil 1/3 and all the other countries together, another 1/3. In terms of category, tissue accounts of 67%. I'm talking about tissue and professional and personal care represent 43%. Why we strongly believe that we have a huge opportunity in this mix in Latin America. And that is because if you analyze, the tissue consumption is analyzed per capita. For example, in the Latin America, the average is 5.5 kilos per capita per year. And if you compare those 5.5 kilos to Spain or to a state, they're talking about 5.5 kilos in comparison with 11 kilos or in comparison of 16 kilos. So a huge opportunity in terms of per capita. And in terms of Personal Care that is about Baby Care penetration is only 70% in Latin America in comparison to 92% with all the other countries. And if we go deeply in the case of Mexico and Brazil, those numbers are more -- give more opportunity to us. So in terms of penetration and in consumer per capita, tremendous opportunity that we can capture. But in this type of business, the key element is to understand consumer needs, what the consumer are requiring, what consumers are looking for. And that is what we call in Softys consumer-centric company. And for that, we make a lot of research. And here, I can share you some of the results of those, what are the trends that the consumer are telling to us that it will come in the next 5 years. The first one, the pragmatism of results. The second value opening. The third searching for better well-being. Fourth, digital transformation. And finally, active sustainability. And this element, we -- every day, we're considering when we're developing our strategy. Here, we have our strategy and we define like a pyramid. And in the base, you can see consumer tissue where you can see that the big opportunities per capita consumption growth; second is Softys professional, that is a very profitable growth in tissue. And this first 2 part of the primary gives the scale of the business just like a huge volume. Then you go to baby and child care, and that is the margin expansion. And that's what we have been focused in the last 5 years. Then you have 2 very profitable business. Adult Care that is right, beginning to grow, and we believe that it will be the huge business in the next 5, 10, 15 years. And the last one, but not least, Feminine Care there's a very high profitable categories. These are our strategy. These are our 5 categories with more details so you can understand better our strategy. Now if you go and reopen our market share per countries and per categories, you can see that in almost all the countries, we are the #1 in the tissue business. Like I said, with regional brands or local brands that we have been buying in the last 5 years, then in Personal Care, we achieved the second position in Latin America. Why we always talk about to be the first one and the second one, because that reinforced the one-stop shopping when you have a relation with your customer. It's totally different, is -- we arrive supermarket chain like Cencosud, also Macau, Peruano, Atacadao, Brazil. When you have a relation with those customers, they want to run business with the leader, with the company who knows and who innovate every time. That is what we're -- every time we're talking about to be the #1 and the #2. And our dream is to achieve the #1 in the Personal Care too and that is to reinforce our one-stop shopping relation with our customers. Let's go with a more detail in the first category, Consumer Tissue. Our proposed -- we name it from Clear to Care. And we have 4 concepts to develop that. First, we have the leading brands like that we said, Elite, the #1 brand in Latin America. Second, it's about superior brands, that means that you have to develop brands for different segments according to consumer needs, such as softness, some consumers are looking for softness like the first priority, other one are looking absorption or obviously, convenience, it's about price. The third one is superior value proposition. And what it means that we measure and we compare our product with our competitor products to try to understand if our products in real terms give a superior value proposition to our consumer. Today, we can say to you that 70% of our product [ SKU ] that giving superior value proposition in comparison to our competitors. And finally, innovation, agility, we need to present new products every -- and with more frequency to our consumer. Today, 30% of our consumer tissue sales are coming for products that we already launched and developed in the last 12 months. Softys professional. Remember that this is our B2B business. And again, our purpose is to make away from home care an engine of success and well-being for companies and society; four, come back to our 4 concept, leading solution that every day, over 100 million moments of care across Latin America. That is what we are serving daily. We have superior brands and our brands here are Elite Professional, Maxwipe and Rendipel. Rendipel is a brand, a more affordable brand. Thanks to our superior value proposition, we are preferred in terms of partner over than 154,000 businesses in Latin America. And finally, in terms of agility and innovation represent 50% of our sales, new products developing in the last 12 months. Personal care. And here, the numbers are totally relevant for us. We see a business growing up to 5% in the next 5 years. Feminine and Adult Care still have a room for penetration increase. And obviously, in Baby Care, you can see you must be thinking that has been decreasing in birth rates, but penetration and premiumization is the key element to add value in this category. Our market share in LatAm reached 24%, like I said, being the #2 and we're dreaming to be the #1. Our brands, here, we have brands like Babysec, Ladysoft, leading in countries like Chile, Uruguay, Peru. We have another brand that we have been adding within our last transaction, and we are going to begin to develop those temporal brands, for example, brands like BioBaby from Mexico, Affective from Mexico among others, that we are going to develop in the next years. Digital transformation is key in this type of business, and we're investing more than $20 million to migrate all of our system to SAP S/4 HANA in the next 3, 4 years. In terms of our digital sales, we're achieving more than 20% of the total sales of the company, and that is a benchmark in terms if you compare in the consumer goods businesses. We are also investing heavily in automation, improving efficiency and optimizing asset utilization by 3 percentage points. And last but not least, we have been investing more than $12 million in automation in processes in our facilities. Let's talk about our journey that have been supporting us to say, we have established us a $500 million EBITDA platform. Our journey -- let's start with ambition. And like I said, to be the #1. First, we build a multinational platform by consolidated individual tissue company in a fully integrated multinational organization. And when we combine and we create only one company, we take a lot of advantage in different process like procurement, like to past experience between different operations, like how we can decide which product we have produced. We need to produce in different facilities. So all of those elements support us to improve our EBITDA. Another aspect in this, it is that with including more markets like Brazil, Mexico, Central America and Caribbean, we have increased our volume so much that we -- now we are taking advantage in all the procurement process. In light of that, we are excited to announce that we have reached an agreement to acquire Ontex Brazil for about $123 million. And again, this is a company that gives and reinforce our position in the Personal Care. You can see at the right that we are adding today, [ 21% ] market share points in Baby Care with Cremer, Turma Da Monica, Sapeka and PomPom, Brazilian brands, very strong local brands. And the most important is Bigfral. That is the #1 brand in the Brazilian market in adult category. This transaction includes our -- like I said, a very robust portfolio brands, but again, reinforce our position with our customers. This company is about 1,400 employees. This company has a site located in Senador Canedo, Goias with 16 conversion lines -- personal care lines to produce. We believe that we are going to take control in the first half of the next year, according to all the authorization the local government have to give to us. In summary, our investment thesis has prioritized Brazil, Mexico on Personal Care business to capture the high profitability of this segment and accelerate our leadership in the region. Our growth plan was complemented by the integration of Sepac and [ Softer Rio ] to strain our first position in the Brazilian tissue market. In Personal Care, our mission is clear. We acquired Ontex Mexico to increase our presence, provide a very strong one-stop shop for our clients, while expanding the synergy through the region that helped us to improve our marketing position in the second place. And with the recent acquisition of Ontex Brazil we continue with our goal to begin the #1 player in Latin America in this category. Now let me give you a quick summary on how we're in our integration plan of the company that we have been buying in the last years. In terms of Mexico, in Mexico, we're strongly identified from the procurement and logistics synergy enable us to secure better prices for the key supplier and lower shipping costs. We're improving our Personal Care operation with innovation strategy to optimize our footprint and establish a strong presence in the high-growth Central market and Caribbean market. On the other hand, in the case of Brazil, we are ahead in the Carta Fabril integration. The Carta Fabril acquisition is a dominant player in Rio de Janeiro, the #1 and has allowed us to increase our capacity in the country with very low per capita consumption. Now we are beginning to work with Ontex Brazil, and we expect that we are going to take a huge opportunity in terms of the relation with our customers. As I said before, Brazil and Mexico, our 2 priority markets growth and value creation. If we take all our numbers and we make -- we had all our sales. This country will represent more than 50% of our results. So that is the key element. And now you can understand better, I believe, why when we invite people to work with us. We look people from Mexico, we look people from Brazil. We look people from those countries and people who have worked in consumer goods of those countries to bring more local knowledge to can -- that help us to capture all the advantage and opportunities that we have on those countries. Our top priorities, key priorities. It's a balanced growth, implementing in the coming years. And the first one is implementing revenue growth management to capture prices selectively. Key element in the consumer business. Executing cost saving programs across our operations and taking advantage of integrate all the companies that we have been at [ concession ]. Transformation of our business by levering digital capabilities within process to reduce costs, logistics, for example. Four, strengthening our portfolio of brands. Every day, we have to work to develop very strong preference of our brands in our consumer minds, capturing signages to maximize value from M&A and finally, rebalance our portfolio towards higher margins personal care products. With all of that, we strongly believe that we can be over our $500 million EBITDA platform. How we can create value. And here is our framework. Organic growth in terms of how we can capture our consumer preference through our brands, margin expansion. And here, we have all the -- how we can integrate quickly all the new companies to take advantage or more volume, procurement, logistics, and finally, capital efficiency, so how we can work with less debt and how we can take opportunity in terms of financial point of view. Now let's see how this -- all this strategy has gone so far across our business unit. Here, you can see how much we have been increased our sales more than 50% in the last 12 months if you compare 2024. In terms of volume, 33%, that is in consumer tissue. If you go to Softys professional, look the numbers, 26% and we reduced volume because we reduce the type of the fiber and the type were designed to value in terms to reduce our cost. And in terms of personal care, because of that position, and we have been adding more production capacity, you can see the number that we can say that in terms of sales, we multiply for 2x. So very strong numbers in the last 5 years in terms of growth in sales and in volume. In terms of our numbers, you can see consolidate that we are achieving around [ $3.7 billion ]. And in the last 12 months, our compound annual growth around 11%. In EBITDA, a platform of [ $600 million ] coming from [ $153 million ] is a dramatically changed in the terms of the size of the business. And EBITDA margin, we were close around 8% and today, 16%. And the recent performance, you can see all the numbers that we maintain our performance, and we believe that we will continue on the track. In summary, what we want is to be the #1 in Latin America. We want to develop everyday stronger brands in consumer preference. Our focus is sales growth with profitable and very high segment, sustainability at the core and Softys is our main project, a strong financial position. And finally, probably the most important to have the right people at the right places and giving huge opportunities so they can develop their career in Softys for many, many, many years. Before I finish this presentation, I would like to highlight that Softys has a unique purpose that drive us to continually innovative for your care ensuring that we meet your needs at every stage of your life. We are strongly committed to develop this assumptional value and quality. And together, we look forward to building a bright future and creating long-term impact for our consumer and stakeholders. Let me show you a final video. [Presentation]

Thank you very much. And finally, I want to explain you our [indiscernible]. Here in our [indiscernible], you can see all of our consumer in every time of their life as well as you see all of our employees with their family, and that is our belief, our family, our people make the total difference to achieve our goals. Thank you very much.

Thank you very much, Gonzalo, and thank you all very much to all the speakers. Now we will have some time for Q&A. And after that, we'll have some food here, so you can grab food, and we will listen also to a small presentation about the plant and specifically about the site visit we will do after lunch. So if you give us 1 minute. And for the Q&A, we will have, again, Gonzalo, if you can join us from Softys also Felipe Arancibia, the CFO of Softys, will be here with us and Francisco Ruiz-Tagle and Guilherme Viesi, he's the VP of Sales for Pulp. So thank you very much. There are a couple of mics on the back, I don't know who want to make the first question. If you please can introduce yourself and where you work and...

Yes, of course. I'm Eugenia from Morgan Stanley. 2 questions first on the Natureza project. I wanted to ask what price you're seeing for Pulp in the future that would sustain the CapEx that you're planning to make for that investment? And the second one would more in general shareholder return. So with the Natureza project in the pipeline, what do you see as a dividend policy for the company so you finish the CapEx disbursement related to that?

Well, thank you for the questions. First of all, in our project for Natureza, actually, we are considering -- the only thing I want to tell you is that we are considering a long-term price for pulp, but this is not -- I wouldn't say -- I would not reveal that, but the -- it's a profitable project. But just to mention to you that we are really conservative and the price we're considering, it's really a long term, which is in the range of the [ 600 ]. And the Second question, yes, this is not public yet, but of course, as part of our financing for Natureza, we are considering also to reducing some percentage, the dividends were -- the dividend policy for -- during the period of the project. But I don't -- I cannot mention you now, I mean, what is the exact percentage we are considering for that.

But today, the last shareholder meeting approved a 30% dividend policy, which is the minimum recorded by law in Chile.

Yes.

Rodolfo here from JPMorgan. I have my 2 questions here. The first one is also around Natureza, we've been always discussing with companies and it seems that there's always a concern about having access to land and forest. So I just wanted to ask, in the case of Natureza, how is that the availability of forest, how is it in terms of -- is it already a nonissue? Or do you still need to work on it? And then my second question is more of a structural question. I was recently in China. And the one thing that I have concerns me when I look into the future is that we've seen a lot of capacity -- a lot but some capacity on the Pulp side in China appearing, which is something that we always consider to be unlikely high cost. I visited companies that produce alternative fibers not using pine or eucalyptus. So I wanted to know your thoughts when you look into the pulp business in the future, how comfortable you are with the fact that China will continue to be a high-cost producer? Or are you concerned about the growth in fiber production out of China? And that's it.

Okay. Thank you for your question. The first question connected with the forest. Actually, I would say that we are 100% under our plan. So now we are a little over 100,000 hectares for this project. The way we are growing is -- we are not, of course, controlling the land because the local law in Brazil, the reinterpretation of the acquisition of land for foreigners. So in that way, what we are doing is doing some agreements with some funds, they control the land, and we plan over these plans. Also, we are considering agreements with particular, the people that owns land and we can also rent land for some areas for growing. And so I don't see, honestly, a big issue. I mean it is a problem not to have the possibility of buying lands by ourselves but there is a way for growing -- and we are under the -- when I say we are under the plan we originally conceived for that. It's because we are growing in the amount of factors that we actually plan. So this is why [ knowledge we're ] considering before. We see totally -- let me correct the way we are growing for Natureza Project.

Let me also complement that, Ralph. In Rio Grande do Sul, different than in other states in Brazil, we are the only forest company there. So our competition there is actually the local farmers. So that's why what Jose Antonio mentioned that part of our strategy to get access to more good is to reach an agreement with local farmers so they can diversify their agricultural activity. And that's why we have a very comprehensive and very simple plan that is underway as Francisco mentioned.

I'll address your second question, Rodolfo. Thank you. I'll address it in 3 points. 15 years ago, the Chinese government in their 5-year long-term plan has determined that China will reduce its dependency of strategic commodities, iron ore, aluminum, pulp was within the range of those commodities. So they decided that they will plant and they will also import with chips and build their domestic capacity. They have done so in the last 10 years, they have grown massively their domestic Pulp capacity. Recently in their new 5-year strategy, they have taken out of this reduced capacity of strategic commodities, and they have focused on domestic consumption. So it's unlikely that China will put as many efforts and resources in developing further pulp capacity in the next 10 years as they have done in the past 10 years. That's the point number one. Point number two, the reliance on the wood chips of the Chinese Pulp capacity has been obviously outside China, from Vietnam, Australia, Laos and different countries in the Southeast Asia, obviously, from South Africa and Chile Brazil as well. That capacity is very limited at the moment. So they have consumed everything that was there to consume in terms of wood chips. But now they have to rely on domestic wood. And the yields in China, everybody knows, is not competitive compared to the rest of the world. So that they have somewhat of a ceiling in terms of cost and availability there as well. And thirdly, I would say that China will continue growing its domestic paper capacity. So it's obviously a concern for us. Their pulp production domestically. But it's not to the point where it will change the world's dynamics in terms of pulp and paper consumption, they will grow their pulp, but they will also grow their paper consumption. So in relative terms, the world will consume more and more pulp over the years.

This is Guilherme Rosito from Bank of America. So I have 2 questions. First one is on Natureza. I just wanted to understand with the recent developments technology in recent projects. Are you guys reconsidering the design of the mill, maybe considering what's the ideal size in terms of efficiency of scale as well what other players are doing? Or is everything said just depending Board approval? And my second one is on Softys. What is the target margin you guys expect long term as you move more into the downstream more into personal care product? What is the target revision in more long term? That's it.

Okay. Well, thank you for the third question. Yes. In terms of, I would say, for Natureza technology and advances, we are considering and in line with our strategy to be -- I mean, in terms of water usage, as Jose Antonio mentioned, to be really an state-of-the-art operator. Even if you consider what the uses of fossil fuels in the operation with [ lime kiln ], for instance, still we are using some fossil fuels. So this plan considers to change this. So in terms of impact and environment, I would say it will be as more than as we can, and we are considering to include all this technology, same thing when you speak about digital incorporation in our operations and also consider absolutely be as modest as we can. In terms of scale, what we have, I mean presented -- for us to represent a competitive case. In terms of layout, still in discussion, you saw a video there with what we have seen until now. But of course, this layout can suffer modifications. It's not -- we are now under the engineering studies and so it could change in some way, not the place where we are establishing the mill because this is already fine, because of many different things that are important for the project. But -- this is -- I mean, we built a line, as you know, [indiscernible] 5 years ago. And more than that, actually, we will -- we started 9 years ago. And I hope this mill will solve some problems we could see there and modern processes.

Regarding Softys, as you have seen in the first half of the year, we had a strong margin EBITDA in the range of 17% that was mainly driven by -- we have been able to increase price, I would say, ahead of volumes in order to offset the cost inflation, this is number one. The number 2 is the strong volumes in baby diapers in Brazil, the full price also was lower than the previous year and also on the other raw materials. But on top of that, we -- let's say, our recipe has been at a much lower cost than the previous year. Good performance in Argentina. And I would say that the consolidation of Puebla, our recent acquisition of P.I. Mabe in Mexico, partially offset from the headwind on FX, particularly in Chile and in Brazil. We also invested more in marketing quite significantly in our development of strong brands. And in some countries, such as Mexico and also in Colombia, we face more transportation costs. Having said that, we feel more comfortable in the range of 15%, 16% on a long-term margin EBITDA.

Good afternoon. I am Rodrigo from CrediCorp Capital. I have a couple of questions related to the Natureza project. And the first one is, have more color on what do you think will be the financing plan of the project considering that this is -- the CapEx is about 50% of the enterprise value of CMPC? So do you think it will be enough to reduce the -- or to maintain the dividend payout of 30%? Or do you see room for some sales of assets that you don't need now or it's not core for your business. This is the first one. And the other one related to the forestry development that you mentioned during the presentation regarding the CapEx of this project, you said that this considered the forest redevelopment? And what does it mean? It means that you already -- I mean, how much do you have of hectares now secured through third parties or that you own already? And how much do you think will be the total hectares that you need for secure the good supply for the project?

Thank you, Rodrigo, for the question. The first one, we are building a robust financing plan. We cannot disclose everything here. But as Jose Antonio mentioned, maintaining our ratings is -- it's must and therefore, we are going to be very conservative and that financial plan will have all the resilience, a project like this. So we are considering Pulp price flotation that, of course, will make our EBITDA or our cash flow generation in the coming years through to it as well. And we are going to be very, very conservative on that end. And we are analyzing different alternatives. Regarding the forest plantations, as Francisco mentioned, we already have secured over 50% of our wood needs. And we have a plan to plant and so we are 100% self-sufficient in the next couple of years. If you consider that in Brazil, the cost of planting is about $2,000 per hectare. And we will be needing about $200 million for establishing those plantations.

We have extra 4 ,5 years for finishing our plantation and so we're not under pressure.

Yes, the average life of -- the average age of our current plantations is over what is needed. So therefore, we have more wood per hectare today available. So we have several years to reach that area because we have even more wood than what we actually need today.

Around extra 80,000 hectares is the [indiscernible].

[indiscernible] I have 2 questions here. Probably the first one is a follow-up to the previous question. Do you have an idea how this idea -- the financing structured to Natureza Project. And the second one is considering the CapEx per ton when we made the comparison to [indiscernible], do you think that this level of [ $4.5 billion ] is fair price of investment to the project?

Well, in terms of financing, as Fernando said, we haven't -- we don't have the final decision yet, but we are -- of course, we are considering our own cash flow. This is considered, we have the time considering long-term Pulp prices for creating Pulp business our own cash and also that we haven't decided about any other alternative yet. Those are, I would say, the main sources by now. And you compare our project with the other project. We see that the cost per ton -- this is your question -- the cost per ton, we haven't -- we don't have a final negotiation. We are at the step -- we haven't closed any important equipment yet. So we are under study. So -- but we are seeing and considering all the different items that were presented here by Antonio, that the range of our cost will be for sure in a competitive range for operating, compare with [indiscernible] last project, even with the [indiscernible] of UPM in Uruguay. So we should be in the range of -- in a competitive range.

I'm [indiscernible] from Quest Capital, and I have 2 questions. The first one in relation with Natureza as you said before, you are not disclosure the numbers now. But could you clarify if you are considering that the prices of land have been increasing a lot since 2022. Are you going to seeing these prices in the budget? I have asked -- I'm sorry, I was asking before because -- could we see an important increase in the CapEx, for example, for the next year with the approval. And second one, in relation with Softys, as you mentioned before, about $500 million of EBITDA, this projection, it's above the basis or are you expecting remain in this range in the next period, considering that flotation in prices could damage the margin?

Regarding your first questions, yes, we have seen, of course, some inflation in the cost of land. That's a reality. But as I mentioned before, because there are no other pulp projects or big industrial projects in the region where we operate. We haven't suffered what you see or you have seen in other states in Brazil, where there is a lot of competition for securing the sourcing of wood, so the transactions that are public in other states in Parana, in Mato Grosso do Sul are at prices that are far beyond what we have seen in Rio Grande do Sul. So of course, we have our numbers and within those numbers, we are very confident and we have the conviction that our project is going to be very competitive, not only from a CapEx point of view, as Francisco mentioned, but especially from an OpEx point of view, from an operational point of view, which is very, very important.

Sorry, but even considering that; in our calculations, we have scenarios in our plan. So we have considered that as part of our analysis -- I mean prices at the end of the wood put in the mill could change because of different reasons. And so we consider that in our calculation, in our scenarios of our evaluation.

Thank you for your question related to Softys, as you well know, we don't make any forward-looking statement or outlook. Having said that -- or let me put it this way, the USD 500 million in terms of EBITDA is our new reality. No, it's all I would say -- I would like to say our platform, for the coming years, as you well know, it's pretty much related to what happened with the local currency and the raw materials. Having said that, we expect it to continue from this level.

Okay. Any other questions? No more questions?

There's one there, Claudia.

Back again. Just one question on the Softys division. So again, very clear presentation, clear focus where the opportunity is. And my question to you is if we look at the execution, there are -- you can grow through acquisitions like the one you discussed today and also organically. And you have a number of different areas such as tissues or personal care in different geographies. So when you look at the asset base today and the footprint of the Softys division, is there a particular area, region or product that you think are still behind or that you need eventually an acquisition or a region or a product that will require a bit more attention so that you can get to the dream of being the #1 in the market in the region.

Thank you very much. In terms of market or priority, it's all about Brazil and Mexico. In terms of -- to looking, analyzing other countries, Argentina, as all of us, we know, is Argentina, with all their changes every time. The last 12 months or 18 months in Argentina, we are performing very well, but it's difficult to project Argentina in the future. And I think that our market share in the other countries like [indiscernible], Chile and Peru, give us a more scalable business scenario for the next 5 years. So again, all of our focus is Brazil and Mexico. And we talk about Brazil, you are from Brazil. It's another country. It's a continent. So there are 5 countries. And that when we go and talk with more details region by region, obviously, there are a different situation for us, huge opportunity in the South. We strongly believe that in the South, we have an opportunity. And I believe that is our main market today in Brazil to go to the south.

I don't see any further questions today, I think...

So no more questions. Well, thank you very much. As I said...

Thank you for your time, your questions and taking all this time for knowing more of our company.

Thank you very much. So some logistics, there's some food on the back, you can grab, and we will have Javier Bush, the plant manager, who will present later about the plant, about the visit we will do. And of course, safety instruction will have to follow. We don't want to have any accident. So thank you very much.