EUCA4 Eucatex

Eucatex S.A. Indústria e Comércio, issuer of EUCA3 and EUCA4 shares traded on B3, is an industrial company with a long track record in the wood panel and coatings sector. Founded in 1951, it began operations producing ceiling tiles and insulation from eucalyptus wood fibers, consolidating its first plant in 1954 in the municipality of Salto (SP). Over the decades, the funds generated by the business were reinvested in production expansion, especially in the implementation of hardboard lines (high-density wood fiberboard), a product that remains one of the main items in its portfolio. Beginning in the 1980s, the company started a diversification and vertical integration process, with coated board lines, door assembly and partition panels, while also testing businesses in glass wool, rock wool, agricultural substrates, activated clays, metal products and terpenes, most of which were later discontinued or sold.

The change in control in 1996, when Paulo Maluf acquired the stake previously held by his brothers, marked a deep reorganization. Flavio Maluf took over as CEO of the Eucatex group and remains in charge to this day, leading a process of organizational downsizing and focus on core activities. The structure, which in 1995 had 23 executive boards and more than 5,600 employees, was gradually adjusted to around 3,000 employees. At the same time, the company expanded its industrial base with the opening, in the mid-1990s, of architectural paint units in Salto (SP) and an MDP (Medium Density Particleboard) production unit in Botucatu (SP), in addition to the laminate flooring plant, also in Botucatu, opened in 1998. These moves consolidated the group as an integrated producer of wood panels, flooring, doors and paints aimed mainly at the furniture industry, building materials retail and the construction sector.

From a financial and capital structure standpoint, Eucatex went through a critical period in the late 1990s and early 2000s, impacted by external crises and the scarcity of foreign currency credit. This situation led the company, in 2003, to resort to preventive bankruptcy protection and later to migrate to the judicial reorganization regime under the new legislation. The plan approved in 2007 included payment in kind using land and forests, partial cash payment and the conversion of part of the debt into shares. In 2009, the plan was ratified, and Eucatex began operating with what it described as an adequate, low-leverage capital structure, prepared for a new growth cycle, which would be supported by investments in industrial modernization, increased production capacity and energy efficiency, such as replacing 16 oil-fired boilers with two biomass boilers in Salto, as well as implementing a pioneering industrial-scale wood recycling project in South America.

Eucatex’s current business model, which underpins the revenues behind EUCA3 and EUCA4 shares on B3, is centered on the production and sale of wood fiberboards, MDP, MDF and T-HDF panels, laminate flooring, doors and partition panels, as well as paints and varnishes. These products are mainly grouped into the so-called Wood Segment (boards, panels and flooring) and into architectural paint and resin operations, part of which is used internally by the group. The company also operates with profiles, wood sales and other resale materials. In 2024, net revenue distribution shows diversified exposure across segments: 38% of revenue linked to construction, 37% to the furniture industry and resale segment, 23% to exports and 2% to other. There is no material concentration in a single customer, as the company states it has no customers accounting for more than 10% of total net revenue.

The corporate and operational structure is organized into different subsidiaries, with Eucatex S.A. acting as a holding company, concentrating interests in the operating companies. Eucatex Indústria e Comércio Ltda is responsible for the production and sale of fiberboards, T-HDF, MDF, doors, partition panels and architectural paints, including resins and inks for paper printing and board painting intended for internal consumption. ECTX Indústria e Comércio Ltda also produces and sells wood panels, including particleboard and fiberboard, MDP and HPP, as well as laminate flooring, reinforcing the vertical integration of the panel and coatings chain. In logistics and distribution, Eucatex Distribuição e Logística Ltda serves the construction segment with regional bases, while ENA – Eucatex North America, based in Atlanta (USA), coordinates exports and distributes products in the North American market. There are also companies focused on forestry, real estate and environmental management, including Novo Prisma Agro-Florestal Ltda, responsible for eucalyptus seedling production, planting and forest maintenance, and ECTX Ambiental, Logística e Transportes Ltda, which manages wood waste recycling.

In terms of markets served and geographical presence, Eucatex’s revenue is concentrated in the Brazilian market, which accounted for around 76.9% of net revenue in 2024, with the remainder coming from abroad. Exports represent 23.06% of net revenue and reach approximately 50 countries, with heavy dependence on the North American market: 84.88% of foreign revenue comes from the United States, which represents about 19.6% of total net revenue. Other relevant, but much smaller, destinations include Bolivia, Israel, England, Paraguay, Sweden, Peru, South Africa, Ecuador and Honduras. This export mix is based mainly on fiberboard sales, reinforcing the historical and current importance of this product in the company’s revenue composition. International presence occurs both through direct exports and via ENA’s structure, which also requires the company to comply with United States legislation due to its subsidiary established there.

State regulation is a key component of operations, especially due to the use of wood, chemicals, water and radioactive sources in industrial processes. Fiberboard production depends on authorizations from agencies such as the Civil and Federal Police for the use of chemicals, CNEN for radioactive sources, CETESB for installation and operating licenses – including effluent treatment ponds – DAEE for water abstraction from the Jundiaí River and artesian wells, and IBAMA for the use of wood from renewable forests. The T-HDF, MDF, MDP and HPP production lines also operate under CETESB licenses, covering both operation and expansion. The Paints and Varnishes unit is subject to a broader regulatory framework, which includes Health Surveillance, environmental licenses, registrations with the Federal Police, Civil Police, Army, ANP for controlled products, as well as the Fire Department Inspection Certificate (AVCB), IBAMA registration and Technical Responsibility Annotations. Paint operations are also subject to specific rules on processing, packaging, distribution, advertising and labeling.

On the environmental, social and governance front, Eucatex emphasizes the use of eucalyptus wood from reforested areas, with more than 48,000 hectares of its own forests, about one-third of which is set aside as nature reserves and permanent preservation areas of the Atlantic Forest and the Cerrado. The company holds ISO 14001 certification at its forestry unit and a green label granted by the Scientific Certification System (SCS), linked to the Forest Stewardship Council (FSC), reinforcing its forest management standards. Forestry activities follow the concept of sustainability, with cataloging of dozens of mammal species and hundreds of birds and insects, as well as investments in effluent treatment using aeration ponds and wood recycling for use as biomass. At the Paints and Varnishes unit, the company maintains ISO 9001:2000 certification, participates in ABRAFATI’s Sectorial Quality Program and in the international Coatings Care program, focused on environment, health and occupational safety. Although it does not yet publish an annual sustainability or integrated report, Eucatex states that it is structuring its ESG strategy based on the GRI methodology and the UN Sustainable Development Goals, with plans to prepare a greenhouse gas emissions inventory from 2025 onwards, using 2023 and 2024 as the baseline years.