Antonio Sergio Alfano, CFO and investor relations officer, Klabin S.A. has won Latin Trade’s CFO of the Year 2015 Award.
By Thierry Ogier
Antonio Sergio Alfano, CFO and investor relations officer, Klabin S.A. has won Latin Trade’s CFO of the Year 2015 Award.
Antonio Alfano’s career with Klabin, which started in 1974, will have reached a new high next year when a new $2.2 billion plant in Paraná is due to be completed.
Latin Trade interviewed Alfano during the Sao Paulo CFO Forum:
What do you consider being your greatest achievement?
The award marked the outcome of the completion of this new $2.2 billion plant in Paraná] project that we had been dreaming about since 2003 and that will become a reality by the end of March 2016. The planted area had to increase by 110,000 hectares to supply the plant in the state of Paraná. It was a project that required a lot of determination and discipline to be completed.
How was the funding process?
The project was approved only after the funding was secured. It was negotiated up until the first quarter of 2014. It includes a capital increase, with the support of BNDES, and support from Finland’s Finnvera for the imported components, as well as $300 million from the Inter-American Development Bank for other parts of the project.
The first thing we did was a mandatory convertible debenture of $469.5 million that will be transformed into equity in 2018 or in 2019, depending on certain criteria. We also negotiated with the BNDES a financing of $1.16 billion, $151 million from Finnvera and $82.8 million from the IDB.
How do you mitigate the impact of the current instability in Brazil and in the capital markets?
This project is closely linked to exports, so the current financial turmoil is not an issue. Eighty percent of the pulp production from this new plant will be exported. Total output will be 1.5 million tons.
At the moment, Klabin’s total capacity amounts to 2 million tons, and we will increase that to 3.5 million tons. Sales will increase from $1.65 billion to some $2.48 billion. This year, we will post growth of 16 percent.
Klabin currently exports 30percent of its output in volume. But there has been such a strong currency devaluation, that our real-denominated exports have increased a lot. Our EBITDA has increased 15 percent. And our output is already sold.
What is your main challenge as a CFO today?
We have a super structured company. We have a very large liquidity cushion to avoid market volatility. We currently have $1.65 billion in cash. We have a super long debt profile, we do not have any cash flow problems. I would say I do not have any problem getting some sleep.
We have a very flexible company, it is very resilient. It has access to a very large international market to sell its products, it has quality and the smallest costs on planet earth.