Irani bets on operational efficiency to grow and prepares new expansion
Irani, a manufacturer of packaging paper and corrugated cardboard, advances in a new cycle of investments focused on operational efficiency, increased production capacity and geographic expansion. After approving the Gaia XII project, aimed at modernizing one of its paper machines, the company is already preparing a plan to more than double its size in the coming years.
According to the company's Director of Administration, Finance and Investor Relations, André Camargo de Carvalho, the main criterion for approving investments is the generation of value for shareholders. The project foresees investments of R$514 million in gross Capex (capital expenditure) and R$453 million in net Capex.
"Even with interest rates at high levels, the project presents a return above the company's cost of capital. This is a fundamental condition for any investment approved by Irani," he told CNN Brasil.
The Gaia XII project foresees the modernization of the MP#7 paper machine, increasing its production capacity from 60 thousand tons to 96 thousand tons per year, an increase of 60%.
In addition to gains in scale, the company expects advances in operational efficiency, product quality and sustainability.
According to Carvalho, the initiative will allow the production of paper with a lower weight and better performance, in addition to reducing carbon emissions per ton produced. "The project does not just increase capacity. It improves paper quality, reduces resource consumption and makes the entire production process more efficient", he highlighted.
One of the factors that supported the approval of the investment was precisely the profile of the project. Unlike expansions dependent on new sales or favorable market conditions, modernization is focused on internal productivity gains.
All additional volume produced will be used to supply the company's own conversion operations, where paper is transformed into corrugated cardboard packaging.
"Value capture is much more internal than dependent on external factors. This makes investment safer in an environment of macroeconomic uncertainty", explained the executive.
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Domestic market supports strategy
Irani currently has less than 20% of its revenue linked to the foreign market. The majority of business is concentrated in Brazil, especially in segments linked to food consumption.
For the company, the food sector will continue to be one of the main avenues of growth in the coming years. "The food market is extremely resilient. People can change consumption habits, but they continue to consume food. This gives stability to the demand for packaging", said Carvalho.
The company's assessment is that Brazil will continue to expand its relevance as a global food producer and exporter, which should support the expansion of demand for industrial packaging.
Historically, the Brazilian corrugated cardboard market grows around 2.5% per year in volume, a pace that the company uses as a reference in its long-term projections. With a share of approximately 4% in this market, Irani believes there is significant room for expansion.
Plan foresees growth
In addition to Gaia XII, the company presented during its Investor Day a long-term strategic vision that foresees the construction of two new packaging factories and a new paper production unit.
The plan, internally called the Neos Platform, still requires formal approval from the board of directors, but already has defined guidelines.
The first planned unit will have the capacity to produce 120 thousand tons of corrugated cardboard per year, a volume close to 70% of the company's current capacity, estimated at around 170 thousand tons per year. The administration's expectation is to submit the project for approval in 2026.
The region considered a priority to receive the investment is located between the south of Minas Gerais and the interior of São Paulo, an area seen by the company as strategic due to the high concentration of industrial customers.
According to Carvalho, proximity to consumers is a decisive factor for the competitiveness of the sector. "Corrugated cardboard is a lightweight product, but it takes up a lot of space during transportation. Therefore, being close to customers is essential to reduce logistics costs and increase competitiveness."
If the two planned plants are built, the company's installed capacity could more than double over the next decade.
Although the company has not yet disclosed investment values or financial projections for the new expansion phase, management reinforces that all projects must follow the same financial discipline.
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Source: CNN