Copyright © 2017 Fibria, all rights reserved

Challenges and Dilemmas in Product Innovations and Funding Mechanisms

in the Biobased Industry

FIBRIA - CASE OF A BRAZILIAN MARKET PULP PRODUCER

PAULO CÉSAR PAVAN

The information contained in this presentation may include statements which constitute

forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of

1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended.

Such forward-looking statements involve a certain degree of risk and uncertainty with respect

to business, financial, trend, strategy and other forecasts, and are based on assumptions, data

or methods that, although considered reasonable by the company at the time, may turn out to

be incorrect or imprecise, or may not be possible to realize. The company gives no assurance

that expectations disclosed in this presentation will be confirmed. Prospective investors are

cautioned that any such forward-looking statements are not guarantees of future performance

and involve risks and uncertainties, and that actual results may differ materially from those in

the forward-looking statements, due to a variety of factors, including, but not limited to, the

risks of international business and other risks referred to in the company's filings with the CVM

and SEC. The company does not undertake, and specifically disclaims any obligation to update

any forward-looking statements, which speak only for the date on which they are made.

Disclaimer

Agenda

• Corporate Figures

• Bio-Products Role in Fibria’s Strategy

• Premises Involved

• Case: From a Challenge to a Strategy

• Actual Status of Some Initiatives

• Takeaways

Shareholder Structure and Governance

Operations & Numbers

Mills & CapacitiesTrês Lagoas – Mato Grosso do Sul – 1,300 thousand t/y

Horizon 2 – Mato Grosso do sul – 1,950 thounsand t/y

Veracel – Bahia – 560 thousand t/yAracruz – Espirito Santo – 2,340 thousand t/y

Jacareí – São Paulo – 1,100 thousand t/y

Global Positioning in Hardwood Market Pulp

Source: RISI, Hawkings Wright, PPPC and Fibria (Nov 2016)

PROFITABILITY

GROWTH

DIVERSIFICATION

Operational Excellence

Financial Discipline

Solid Governance

Sustainability

Transparency

High Performance Culture

Organizational Climate

Options

IMMEDIATE SHORT TERM MEDIUM TERM LONG TERMS

Bio-Products Role in Fibria’s Strategy

Operational Excellence

Modernization

Biotechnology

Forest Base Formation

Organic Growth

Consolidation

Bio Strategy

Logistics

Real Estate

Actively and preferably pursue consolidation aiming at a healthier industry.

Continuous the promotion of growth through expansions and partnerships in a disciplined way.

Maintain active forest formation to be ready for growth opportunities.

Consolidate our position in the 10% lowest cash cost players in the industry by:

• Achieving MAICEL of15,0 tons/ha/year of pulp by 2025 for new planted forests.

• Pursuing a minimum of 10% of differentiated pulp volume priced with a premium.

Diversify its cash flow

through focused

investments in non pulp

businesses, leveraging

key Fibria´s assets and

competencies.

Achieve a sizable free

cash flow from new

businesses in comparison

with pulp business.

PROFITABILITY GROWTH DIVERSIFICATION

Bio-Products Role in Fibria’s Strategy

Premises Involved in the Diversification Process

AMBITIOUSLONG TERM VIEW

PRUDENT, FOCUSED AND DISCIPLINED ACTION

PLAN UNDER EXECUTION

Complementaryto our

value chain

Leverage on ourcompetencies

Partneringwith winnertechnologyproviders

Appliedinnovation as ultimate goal

“Stage & Gate”

Process

Creation ofStrategicFlexibility

FOCUSED DIVERSIFICATION

OK but… Where should we go??

Path attractiveness for Fibria

Pat

h m

atu

rity

Market Sizeby 2020

Gasification

Pyrolysis

Hydrolysis

Catal. Depol.

Pellets

Lignin

Biocomposites

Nanocellulose

Opportunities change with Tech & Mkt Context

PYROLISIS

LIGNIN

NANOCELLULOSE

BIOCOMPOSITES

Prioritized Paths

Specific Assessments for Certain Scopes

• Best combination for any given mill

• New routes (that could be) introduced to the Portfolio

• Survey on new markets, potential partners, value proposition

• ....

Specific Assessments - ExamplePrioritization Panel - MCDM

2012 2013 2014 2015 2016 2017

Lignina:

Produção Piloto

Pirólise

Lignina:

Actual Demonstration of Corp. Engagement

Development Status of some Tech Paths

Identification of potential

technological partners

Strategic relationships

in place

Pilot investments

Identification of promising technologies

Negotiationwith selectedtechnological

partners

Commercial Investments

PYROLISIS

LIGNIN

NANOCELLULOSE

BIOCOMPOSITES

DEV

ELO

PM

ENT

STA

GE

Severalpartners already

collaborating

Severalpartners already

collaborating

Ongoinginvestigation

Ongoingnegotiations

• Support from the board;

• Basic assumptions, aligned with companie’s culture, support recommendations and

facilitate decisions; eg positioning in new value streams;

• A structured and prioritized master plan introduces efficiency to a process that can get

lost amid so many alternatives. Resources will always be limited in relation to emerging

alternatives;

• RD&I is expected to lead to commercial investiments, risks, and generate turnover;

• World is under exponential transformation, anything apparently not (volume)

representative may represent a disruption to other businesses in the future.

BTW, the same is true towards P&P businesses.

• Think bold.

Takeaways … for product (business) innovation

pcpavan@fibria.com.br