Strategy and Competitive Advantages

Estratégia e Vantagens Competitivas

Furniture Industry

In the furniture industry, Eucatex operates on an integrated basis with its clients, in accordance with the scenario in Brazil’s furniture and wood reselling industry.

The relationship between Eucatex and its clients is marked by a continuous production process, given that its clients in this segment are furniture retailers or manufacturers to which Eucatex supplies the raw materials to be transformed into furniture.

In addition to locating clients close to its facilities, Eucatex also supports them in the process of designing new products for consumers and by providing services to complement the MDP/T-HDF/MDF products it makes.

The special treatment given by Eucatex to furniture makers is considered a significant competitive advantage in this segment, where there are fewer than 500 manufacturers of significant scale and direct relations with clients is often a determinant factor in closing sales.

Construction Industry

The main products sold by Eucatex in the construction segment are: architectural paints, wall partitions, laminate flooring and doors. Its flagship products are laminate flooring and architectural paints.

Eucatex believes that its operations in the construction industry enjoy competitive advantages, which include its large sales team, with some 200 professionals providing nationwide coverage, who are supervised by regional managers strategically located in the country’s major cities.

Export Market

Eucatex has been exporting products for over 60 years, among which wood fiberboards, its main export product. Fiberboard surfaces are treated for application of high-quality paintbased or resin-based paper finishing, allowing them to be used in the construction and furniture industries.

Eucatex’s fiberboards are produced from a wet lap process using eucalyptus wood only. This type of raw material production provides panels with distinguished features in terms of resistance and surface quality, which, combined with the Company’s tradition in the international market, allows great penetration in developed countries, such as the United States, Germany, Austria, France, as well as in some regions in Africa, Middle East, South and Central America and Australia. In order to meet the demand of the Unites States, its main market, Eucatex has a subsidiary in Atlanta, Eucatex North America (ENA).

In recent years, the Company has invested to reduce costs, improve quality and tailor its products to the market’s requirements, making them even more competitive abroad. Eucatex also has partnerships with large foreign companies, among which Home Depot, to supply its products, such as tile boards, which simulate tiles and are largely used in the U.S., as well as perforated boards and the traditionally exported products (door covers and standard boards).

Production Units

Production units, main products, capacity, utilization rate and markets served

Unit Location Products Annual Capacity Utilization Finishing Rate* Annual Finishing Capacity Markets
Hardboard Salto, SP and Botucatu, SP Hardboard 370,000 m3 81% Paint 101 million m²

Paper Printer

96 million m²

Furniture and Construction Industry and Export Markets
Panels and Doors 4.8 million units 70% Construction
T-HDF/MDF Panels Salto, SP T-HDF/MDF Panels 275,000 m3 93% Lacquer 16 million m² Furniture and Construction Industry and Export Markets
MDP Panels and Flooring Botucatu,SP MDP Panels 430,000 m3 80% Finish Foil, BP and Lacquer 50 million m² Furniture Industry
Laminate Flooring 12 million m² 51% Construction Industry
Paints and Varnishes Salto, SP Paints and Varnishes 36 million gallons 59% Construction Industry
Cabo Sto. Agostinho/PE 3,6 million gallonss
Seedling Nursery Bofete, SP Eucalyptus Seedlings 10 million units
The processes hold ISO 9001 certification
* Third quarter of 2019