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A new leaf: José Soares de Pina, CEO of Altri

As experts in pulp production, forest management and renewable energy, Altri is well prepared to do its part for a green future. José Soares de Pina, CEO of Altri, speaks with Acuris Capital Intelligence about the challenges and opportunities involved in building a better tomorrow.

Interview by Nelson Rodrigues

Q. What is your operational outlook for 2022?

We have confidence [things will remain stable] based on the strong demand that we continue to see in Europe, which is consistent with stock levels and the recovery of the economy. However, there are always challenges, namely energy and raw material prices, as well as uncertainty caused by the evolution of the pandemic.

The main risk is not related to the paper and pulp industry, but rather to demand as the pandemic evolves and to the impact that new variants could have on global economic behaviours.

On the supply side, risks linked to inflation could impact product availability, specifically high energy prices and supply chain disruptions, which are relevant and central to any sector, but particularly industrials.

Q. What strategic objectives have you set to capitalise on markets?

In the third quarter, Altri posted growth in its main indicators, with pulp and paper production hitting record highs. In the same period, Altri reduced net debt in the pulp and paper segment—our core business—by 20%. Our focus will continue to be on sustainable development, based on operational excellence and a focus on clients.

We are also moving ahead with value-added projects, in particular the development of an important project in Galicia, Spain. This new biofactory will produce dissolved pulp and sustainable fibre for the textile industry. This factory will be the most sustainable factory of its kind in the world.

Q. How does your capital position support these ambitions?

Altri has a very comfortable debt position, with a net debt-to-EBITDA ratio below 2x and a maturity profile that is quite broad and diverse. Together with our strong free cash flow growth, this will support our investments without significantly changing our risk profile.

We do not anticipate relevant refinancing needs in the short term. Our current debt conditions and maturity meet the needs of our business plan. We believe that if we move ahead with our new project in the north of Spain next year, we will need to close a new financing package specifically for this project. We have not yet decided on the specific type of financing, which could come from the banking sector, and we do not exclude issuing green bonds.

Q. What are your M&A objectives for the future?

Our expansion plans are currently focused on the organic growth of our productive capacity and on the Galicia project. We hope to meet all the requirements to make a decision by the third quarter of 2022 and quickly start the construction of the factory as well as the necessary infrastructure. We do not close the door on any M&A opportunity that might arise as long as it adds value, but we also are aware that these opportunities are becoming increasingly scarce in our sector in Europe, and in the Northern Hemisphere, which is where we operate.

A bit of background: Altri focuses on the production of eucalyptus pulp, sustainable forest management and renewable energy production. José Soares de Pina, CEO, holds a degree in civil engineering from the New Jersey Institute of Technology and attended a Masters’ degree in Construction Management at the Instituto Superior Técnico. Subsequently, he completed advanced business management programmes at Indiana University and INSEAD.

This interview has been edited for clarity and length.