Forest from the Trees
A Global Pulp Company Transformed a Massive Production Mill to Ensure Long-Term Growth
From left, Mauricio Miranda, Júlio César Rodrigues da Cunha and Tomás Balistiero
BY SARAH FISTER GALE PORTRAITS BY CLAUS LEHMANN
Fibria's Horizonte 2 project in Três Lagoas, Brazil. Below, a nearby forest of eucalyptus trees
Chasing growth at a time of uncertainty takes a daring vision. Amid Brazil's worst recession and a tumultuous political landscape, Fibria Celulose in 2015 launched the largest private project in the country—a BRL7.35 billion expansion of its Três Lagoas hardwood pulp production facility. With global demand for wood pulp on the rise, Fibria saw an opportunity to secure its position as the world's top producer of eucalyptus pulp—the key material in paper products ranging from diapers to bank notes.
“The startup of the new production line in Três Lagoas allowed Fibria to increase its competitiveness and strengthen its long-term strategic position,” says Júlio César Rodrigues da Cunha, project director, Fibria, Jacareí, Brazil.
—Júlio César Rodrigues da Cunha, Fibria, Jacareí, Brazil
The Horizonte 2 project delivered the industry's first forest-to-port pulp operation. Using state-of-the-art technology and sustainable practices, the new production line increased the forest company's capacity from 4.8 million metric tons to 6.58 million metric tons per year. The project also reduced the plant's operating costs and environmental footprint through the use of more efficient equipment and processes. And it added new revenue through the sale of clean power to the national grid.
Keeping everything on track required detailed coordination among suppliers, business partners and forestry managers. That meant leaders across the company had to work together in a new way. Fibria created a project management office (PMO) to keep everyone aligned and to provide centralized documentation and big-picture analysis. This helped project leaders anticipate and mitigate risks before they caused delays.
“It was a big, big project, which was a challenge,” says Tomás Balistiero, general manager, forest operations, Fibria, Três Lagoas. “When you discuss leadership, integration, communication, risk management and everything else included in this type of project, having strong project management support helped us deliver better results and gain a rich competitive advantage.”
—Tomás Balistiero, Fibria, Três Lagoas, Brazil
The PMO kept forestry, industrial and logistic teams on the same page by creating a portal for team leaders and outside stakeholders overseeing communication, sustainability, compliance and environment. The PMO ensured all teams used standardized documents and schedules and provided project managers guidance on how to manage deliverables and communicate results. Monthly meetings with all project managers helped align activities and evaluate risks to determine if scope or schedules needed to change. The result of all this coordination: a constant flow of reliable data about progress and the opportunity to capture lessons learned that were shared with the teams and stakeholders, Mr. Cunha says.
“We had information down to the micro level for all areas of the project so we could analyze what actions needed to be taken in different phases of the project. It was marvelous.”
—Júlio César Rodrigues da Cunha
The project plan had to align with the company's sustainable vision. Fibria follows strict forestry activities based on renewable plantation goals. Of the nearly 1.1 million hectares (2.7 million acres) of forests controlled by Fibria in Brazil, 656,000 hectares (1.62 million acres) are planted forests, and 374,000 hectares (924,174 acres) are environmental preservation and conservation areas.
“Sustainability and the environment are our core business,” Mr. Balistiero says. “When we plant forests, we capture carbon, and that has positive impact in the fight against global warming.”
Fibria leveraged innovation to make an immediate impact. The company built a connected eucalyptus seedling nursery so it could speed up the planting process, which helped ensure the facility had enough raw materials to support the expanded operation. “The nursery is a game-changer,” Mr. Balistiero says.
Using big data analytics, automated cameras and robots, the team was able to triple the number of seedlings one person could produce in a nursery to 300,000 per year, while reducing costs 25 percent. Sensors provide greater control in tracking and monitoring seedlings cloned from Fibria stock, which resulted in better forest productivity for all of its projects, Mr. Balistiero says. “It will generate better results for all of our forest efforts, which is very important for us.”
Sustainability and conservation drove mill design decisions, too, he says. For all the water the mill draws from the Paraná River, the mill's water treatment plan returns an equal quantity of water to the river. To boost energy efficiency, the designers followed European Union standards for environmental control equipment. And the new plant's energy is generated at a biomass facility fueled from the mill's eucalyptus bark. Surplus energy is sold to Brazil's electricity grid. “Even in logistics, we try to reduce our energy consumption,” Mr. Balistiero says.
The PMO helped foster a proactive risk management process. Risk analysts reviewed the risk register bimonthly to determine what potential problems needed to be addressed throughout the project. “To guarantee risks were avoided, we needed to be well-planned and have discipline to implement mitigation strategies,” Mr. Cunha says.
No risk was more obvious—and potentially disruptive to the schedule—than logistics. For one, the project site was located in the middle of the country—1,000 kilometers (621 miles) from the nearest port. On top of that, infrastructure hurdles such as narrow, poorly kept local roads and low bridges made transporting equipment and materials to the site difficult, Mr. Cunha says. The team worked closely with equipment suppliers during early planning to identify the most efficient and obstacle-free routes that gave delivery trucks enough time in the schedule. In one scenario, a truck had to wind through 3,000 kilometers (1,864 miles) to pass roads and bridges that could accommodate the loaded equipment's size and weight. By planning ahead, the team made sure the slow journey did not delay the schedule, Mr. Cunha says.
The project's job creation was a vital boost to the local economy. But with labor strikes common on large projects in Brazil, the team couldn't afford to take its resources for granted, Mr. Cunha says. Any work stoppage would have wreaked havoc on the schedule.
Júlio César Rodrigues da Cunha, project director, Fibria Celulose
Location: São Paulo, Brazil
Experience: 32 years
Why did this project have special meaning to you?
I had the opportunity to be responsible for the whole enterprise, including the forest, logistics and the pulp mill. We also implemented several social action projects in the surrounding communities that will support a continued legacy.
How do you relieve project stress?
I regularly invite my friends to have lunch and drink in my house. It's a chance to have fun, plan trips together and talk about subjects not related to work. Spending time with family and friends makes you feel stronger.
What career lesson did you learn on this project?
To develop a big project, it is fundamental to know in detail all of the phases and be well organized and planned. The difference comes when you have team members who are skilled and committed to the work.
Workers at the Horizonte 2 project in Três Lagoas, Brazil
Project leaders mitigated the risk by making sure the budget could provide the workforce with fair pay, training and at-home comforts. “Strikes happen because the workers are not happy,” Mr. Cunha says. So the team prioritized a high quality of life for the workforce and required suppliers to do the same.
For instance, the company secured comfortable lodgings for workers and made sure canteens delivered quality meals with fast service. The team also designated one person on the project site with whom workers could share concerns so any problems could be escalated to leadership. In the end, there were no strikes or work stoppages.
“We recognized that if we take action quickly on these issues, we can avoid a small problem becoming a big problem,” Mr. Cunha says. “That is how you avoid strikes.”
Keeping workers happy also meant keeping them safe. The PMO created a safety management plan and team, says Mauricio Miranda, project and engineering general manager, Fibria, Trés Lagoas. The plan ensured that the work of all suppliers, contractors and subcontractors aligned with project safety goals. The team conducted monthly safety audits and inspections, and shared all safety risks it identified across the project. Project managers also addressed safety in each daily meeting, Mr. Miranda says. “We spent many hours in trainings and creating campaigns and events to discuss the importance of safety.”
—Mauricio Miranda, Fibria, Três Lagoas, Brazil
The PMO even incentivized safety with monthly prizes, including laptops, motorcycles and cars, to workers who excelled in meeting safety goals. The elaborate gifts raised awareness and helped ensure the project was completed with no serious accidents among workers. “It guaranteed the safety index was under control,” Mr. Cunha says.
The Horizonte 2 project was completed in August 2017, two months early and nearly US$500 million under budget. Along the way, the project helped transform a region during a time of economic uncertainty. It created more than 40,000 temporary jobs across the production chain and 3,000 long-term jobs at the new mill. During the project, Fibria also provided vocational training to more than 2,000 professionals and invested nearly BRL20 million in social programs.
These initiatives supported the development of small businesses, improved local sanitation and provided resources to the region's hospitals, schools and emergency responders. The project team also launched a program to combat substance abuse, child abuse, violence and prostitution. Such community improvements played a critical role in keeping local stakeholders on board with such a massively disruptive project, Mr. Balistiero says.
“I'm proud about everything we accomplished on this project,” he says. “We came in under the budget, under the schedule and with high quality. But more than anything, people could see how these efforts bring value not only for Fibria but for the entire community.” PM
May 2015: Horizonte 2 project approved and launched
October 2015: Piling work begins
March 2016: Team begins to assemble recovery boiler structure
February 2017: Startup of water treatment plant
July 2017: Test run of pulp drying machine and gas boiler is started
August 2017: Project completed and expansion mill begins operation
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