The Ibovespa Index fell below 128,800 Monday, ending its ten-day ascending streak amid global geopolitical uncertainty triggered by the recent assassination of US presidential candidate Donald Trump.
This shift in sentiment coincided the revelations of the latest Focus Bulletin which highlighted evolving expectations about Brazil’s central banks monetary policies for 2020.
The report showed a significant decrease in inflation forecasts after nine weeks of consecutive increases, along with modest gains in GDP numbers, prompting investors to be more cautious about future monetary policies.
Sector performance analysis
The consumer discretionary industry was the hardest hit by the downturn. Companies such as American and Hypermarcas, both American companies, experienced significant declines.
Localiza, which had a 0.9% decline, was followed by Vale with a loss of 0.5%.
Suzano’s strategic moves
In the midst of this market turmoil, Suzano stands out with a 2% rise in its share price. This was fueled by its recent purchase of two Pactiv Evergreen plants in the United States, for $110 millions.
The transaction includes two mills located in Pine Bluff, Arkansas and Waynesville, North Carolina that manufacture liquid packaging board and cups.
Suzano will be able to produce approximately 420,000 metric tonnes of integrated paperboard per year once the final regulatory approval is granted, which is expected to happen later this year.
Suzano also signed a long-term agreement with Pactiv Evergreen for the supply of a liquid packaging board to its converting business.
The acquired assets are able to benefit from the abundant wood supply and low energy costs as well as good access to railways and ports. Suzano will use its expertise, as the largest hardwood market pulp supplier in North America, to increase the competitiveness and profitability for the new assets.
Fabio Almeida is Suzano’s executive Vice President of Paper and Packaging.
“We enter the North American market in a competitive paperboard producer, acquiring quality assets strategically located and creating new growth opportunities.”
The completion of the transaction depends on customary conditions as well as approval by an antitrust authority abroad.
Suzano wants to increase revenue streams, expand its customer base and reduce its dependence on a single region by expanding its geographical footprint.
This acquisition not only supports Suzano’s growth ambitions, but also reinforces the company’s commitment to innovation and sustainable packaging.
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