On September 15th, 2020, Raimundo Varela was appointed as CEO of CMPC Celulosa. During the nearly 7 years that the executive has been with the company, among other things, he formed the Supply Chain area in the same subsidiary and served as Commercial Director of CMPC Celulosa.
In this, his first interview as CEO of CMPC Celulosa, Varela comments on how the company managed to overcome some of the worst years that humanity has faced as a result of the impact brought by the spread of Covid-19 and the commitments that CMPC has assumed in the matter of innovation, sustainability and work with the community.
- The last year was marked by the challenges posed by the pandemic and all the signs are indicating that 2021 will be the same, what are the projections for the pulp industry in the current environment?
2020 was an unprecedented year for any industry. We had to adapt quickly, facilitating almost 4,000 workers from CMPC to work from home. We realised that despite the difficulties, our company was ready to take on this accelerated digitalization. This was all possible thanks to the cooperation of our employees, suppliers, clients, and various other stakeholders.
In terms of our operations, the most important thing was to ensure the health and safety of our workers, which was a huge challenge due to the uncertainty that we were facing. I can safely say that we embraced the challenge, enabling us to keep all of our operations running and maintaining our excellent levels of customer service.
However, as with other commodities, our industry was not exempt from the economic consequences of this pandemic. The price of pulp was below the marginal cost for 12 consecutive months for some producers, although in our case, the cash cost reductions permitted CMPC to deal with this crisis more smoothly. Nevertheless, having such low prices for a prolonged period has its complexities.
Faced with the uncertainty that surrounded 2020, 2021 projects better market expectations. The vaccination process will mean the medium-term recovery of highly affected sectors of the economy. During the first quarter of 2021, we have already seen clear signs of recovery in the prices, and we hope that this will not be an exception for the rest of the year to come.
- In general, what are the business objectives for 2021?
A significant objective is to continue with the implementation of our Management System, named Best, which aims to install a culture of continuous improvement for all of our activities.
While we will continue to operate as usual, aiming the meet all of our goals and objectives for each business in terms of performance and accomplishment, a fundamental part of CMPC’s strategy and objectives for 2021 is to continue to advance and grow in compliance with the Sustainability Goals for 2025 and 2030.
In the case of the Environmental goals, these were set during 2019, and the Diversity and Inclusion, along with the Innovation goals, were all set in 2020. Likewise, the company’s Sustainability team has carried out an extensive analysis of the eight impact opportunities that we have cocreated with WBCSD and which are embodied on the forestry sector roadmap to SDG compliance. An interesting goal for the pulp sector is to continue to grow this alliance in order to contribute towards the meeting of the Agenda 2030.
At this point, we are working on our objectives for 2021, defining our actions and tendencies to comply with the Empresas CMPC Sustainability Goals. These have a deadline of 2025 when it comes to Zero Waste and the reduction of 25% of industrial water per tonne of product. By 2030 the aim is to decrease Greenhouse Gas Emissions by 50% for scopes 1 and 2 and increase protected and conserved land by 100,000 hectares.
During 2020, we established the following specific corporate objectives:
1) To not surpass the scope 1 and 2 emissions of 2018. This means, in the case of Pulp, not going over the 1,340.882 tCO2e emitted.
2) To reduce intensity to below 30 m3/t, which means for Pulp a maximum intensity of 33.1 m3/t.
3) To not surpass 500,000 tonnes of waste sent for final disposition (landfills). With pulp being able to send a maximum total of 92,400 tonnes.
4) To add 42,000 hectares of conserved and/or protected land.
The limits established for pulp are referential because they depend on the performance of other businesses, therefore the perspective should be set and consolidated in the corporate objective.
In terms of the results for 2020, these will be presented in the following Comprehensive Empresas CMPC Report. The indicators are currently being reviewed and will be verified by an independent third-party.
- One of the areas that CMPC is putting a lot into is innovation; how are you involving pulp in this?
We are diversifying our Innovation strategy, which is aligned with the three CMPC Innovation goals that aim to improve efficiency, to develop new products and new business models, as well as our commitments to sustainable development. This diversification is being carried out through meetings with the BUs to clarify the criteria that define innovation, governance, and KPIs. Additionally, the Innovation 2021 goals were defined, which are being integrated into the goals of the different BUs.
To manage compliance with these innovation goals, a CMPC Future and Innovation Committee will be created. It will comprise of the CMPC CEO and all of their assistants whose tasks will be to validate the advances of the approved project while also approving new focuses and strategies. A Pulp Innovation Committee was also set up, which meets monthly and has the primary objective of presenting the advances of the current and future projects, as well as removing any obstacles, reviewing KPIs, and approving budgets. This will also enable the important assurance of the collaborative work carried out by the BUs with the Innovation area.
- The production of pulp, paper, and cardboard are an essential part of the economic activity in the areas that you operate in, such as the Biobío region in Chile or Guaíba in Brazil. What measures have you undertaken, together with the local communities, that are being implemented?
In both Chile and Brazil, we have a Local Development and Relations Strategy, as well as specific instruments for relations with indigenous communities. This is all supported by – in the case of forestry operations – advanced and demanding certificates that are based on three pillars: Education/Culture, Business, and Outdoor Life. Likewise, through our different areas of Public Affairs, the environmental and social impacts related to pulp, timber, and bio-packaging are all monitored and managed with ease. Finally, the CMPC Corporate Affairs Area has put forward an interesting Corporate Citizenship initiative, through which significant social contributions can be made to local guilds and foundations who we hope to cooperate with on projects. We also hope to contribute to the universities we have agreements in place with, and to education in general.
In regard to the last point, since 2000, the Fundación CMPC has made significant contributions to the education and culture for the children of local families living in the areas that we operate in Chile, promoting an improvement in public education through a range of different programmes. One of the most noteworthy initiatives that we implement each year in the three countries that we have a forestry presence in (Chile, Argentina, and Brazil) is the prevention and control of forest fires. This initiative, which mainly comprises of preventative forest management and community environmental education, has recently led to Pacto Global Chile acknowledging us for our ability to effectively contribute towards the fight against climate change, for protecting ecosystems and biodiversity, and for promoting more sustainable cities and towns.
- What has been the social role of the company during the latest health emergency?
As a quick and significant response to the COVID-19 pandemic, CMPC launched its innovative solution of producing facemasks to help internal and external interested parties in the fight against the diseases in Brazil, Argentina, Peru, Chile, and Mexico. While the production of facemasks may be considered as an expansion of CMPC’s central business activities, it is a product that the company had never manufactured before, meaning that there were several innovation challenges in the process. The project was worth around US$ 3 million dollars in terms of social outreach as a result of the donation of 15 million facemasks each month.
Currently, through different research initiatives and global waste management solutions focused on disinfection and recycling, we are attempting to provide answers to various key issues related to the production and lifecycle of facemasks.
Together with Desafío Levantemos Chile, the company is part of the “Clínicas Móviles” [Mobile Clinics] project, an initiative that aims to relieve the public and private health networks in the Biobío and La Araucanía regions through vans that can provide medical assistance to people in their own homes, deliver medicine, give flu jabs, and even carry out coronavirus tests. Furthermore, CMPC has promised the Biobío Town Hall its old office building in the city of Los Angeles so that is can be used as a field hospital for the sick that do not require hospitalisation. This will help to relieve the health centres in the province and free up more spaces for those who need to be hospitalised. The premises will have 200 beds available. Likewise, the company also financed the contestable fund “COVID, Colaboración y Vida” [Covid, Collaboration, and Life] from the Fundación Chile, which aims to support businessowners with solutions to the issues posed by the coronavirus emergency.
On an internal level, in March 2020, CMPC put progressively managed protocols in place to ensure the full compliance with the global and local health authorities recommendations. These protocols have been regularly updated. The care and protection measures for the entire CMPC team, in every country that we operate, include the implementation of working from home for administrative personnel, a measure which has been in place since 16th March and which has had very good results, plus a series of suggested recreational and sporting activities to do at home. We have also implemented strict protocols in regard to factory access and carry out daily sanitation of facilities to ensure the best possible care for our workers.