MSPA4: quote, dividends and indicators for Companhia Melhoramentos de São Paulo

Companhia Melhoramentos de São Paulo is one of the oldest companies in continuous operation in the country, with origins in the 19th century. Its roots go back to 1877, in the region that would come to be known as Caieiras, when Antônio Proost Rodovalho installed lime kilns on his farm on the banks of the Juqueri-Guaçu River, while also taking part in sanitation works in São Paulo through Companhia Cantareira e Esgotos. The shift to paper took place in 1887 with the start of construction of the mill, and in 1890 the first machine began production. On September 12 of that same year, Companhia Melhoramentos de São Paulo was formally founded in the Grand Hall of Banco do Brasil, in Rio de Janeiro. In the following decades, the company went through industrial expansion, installation of its own railway line, construction of a dam and hydroelectric plant, and development of eucalyptus plantations, consolidating a trajectory strongly linked to the paper, pulp and reforestation industry.

Throughout the early 20th century, the company expanded its integration with the publishing sector. In 1915, Weiszflog Editora published “O patinho feio” (“The Ugly Duckling”), considered the first book printed in Brazil, at a time when Melhoramentos was increasing paper production and expanding its properties in Caieiras. In 1920, the paper and publishing businesses were definitively combined with the incorporation of Weiszflog by Melhoramentos, and in the following years products such as Sul América toilet paper and Volga paper towels were launched, in addition to the construction of a new printing facility in Lapa, São Paulo. The publishing operation grew in catalog and volume, culminating, in 1938, in the Edições Melhoramentos brand. In the 1940s, the company began producing pulp at Fazenda Levantina in Camanducaia (MG), reaching, in 1946, production of pulp from eucalyptus, an event with international repercussion. From the 1960s onward, it expanded forest assets and innovated in paper products, such as decorated toilet paper, as well as advancing in high-yield pulp technology, including CTMP pulp from eucalyptus.

In its current structure, Companhia Melhoramentos de São Paulo is a holding company of non-financial institutions, with shares traded on B3 under the tickers MSPA3 and MSPA4. Its corporate purpose is focused on holding interests in other companies and managing real estate assets, composed of three farms – in Caieiras and Bragança Paulista, in the state of São Paulo, and in Camanducaia, in Minas Gerais – in addition to its head-office property in the state capital, a listed and refurbished building that now houses offices and leasable spaces for events, exhibitions and workstations. The company is organized into three major business fronts through its subsidiaries: high-yield fibers and forest management, publishing and educational activities, and real estate development focused mainly on logistics operations and project development.

In the high-yield fiber segment, subsidiary Melhoramentos Florestal Ltda. concentrates industrial and forestry operations. The company operates in silviculture, afforestation and reforestation on its own and third-party land, using mainly pine and eucalyptus wood. Production consists of defibring reforested wood to obtain high-yield fibers, an input destined for industrial customers, with distribution logistics based on road transportation. In addition, it provides forest management services. The main inputs in the process are wood, electricity and chemical products. The subsidiary holds a significant share in its market, with around 32% in the high-yield fiber segment, in an environment influenced by international pulp prices and the entry of new local competitors from 2018 onward. Relationships with suppliers are generally not subject to direct government control, except for electricity supply, which is subject to sector regulation.

In the publishing and content area, the group maintains the Melhoramentos brand’s tradition through several subsidiaries, including Editora Melhoramentos Ltda., Melhoramentos Livros Ltda., Cora Livros Ltda., Jaguari Livros Ltda., Melhoramentos Livrarias Ltda., Melhoramentos Melius Ltda., Melhoramentos Manguinhos Ltda. and Terras Bonsucesso Ltda. These companies operate in publishing across multiple formats, in the production of texts and illustrations, and in the trade of books, paper goods and educational and cultural materials. Editora Melhoramentos’ estimated market share in the Brazilian publishing market is around 1%, in a highly fragmented environment impacted by challenges in book retail and competition from other forms of entertainment and content consumption, such as streaming and digital games. Book distribution is carried out by third-party logistics operators, distributors and sales representatives, with paper as the main input, partially regulated by the rules governing the so‑called “papel imune” (tax-exempt paper). In this publishing ecosystem, the company also leverages licenses, copyright agreements and trademarks related to its main titles.

Companhia Melhoramentos de São Paulo has also developed a branch focused on digital education and technology through subsidiary Athena Edtech Ltda., dedicated to internet-based access services for educational and entertainment content, online content distribution and operation of educational apps. This component adds a digitization vector to the traditional publishing business, connecting the group’s content portfolio to new consumption formats based on platforms and apps. In real estate, several subsidiaries, such as Altea Empreendimentos Ltda., PLD Cajamar V Empreendimentos Imobiliários S.A., Engelote Incorporações e Urbanismo S.A. and Setor K Empreendimento Imobiliário SPE Ltda., operate in the purchase and sale of properties, project development, land subdivision, real estate development, construction, management and leasing of own assets, with a special focus on projects aimed at logistics operations. The company also maintains a Silent Partnership (Sociedade em Conta de Participação) with Swiss Park Caieiras Incorporadora SPE Ltda. for the development of a land subdivision project on its own land in the municipality of Caieiras.

From a consolidated operating standpoint, Companhia Melhoramentos de São Paulo’s revenue is distributed among three main segments: high-yield fibers, publishing and real estate. In the recent historical period, most of the net operating revenue comes from high-yield fibers, with a share that has fluctuated around 75% to 85% over the years presented, while the publishing segment accounts for a relevant but smaller share, and real estate represents a still limited fraction of total revenue. The company does not calculate segmented profit or loss, as it uses a shared operating structure among the different businesses. In terms of customer concentration, Melhoramentos Florestal is heavily dependent on a few industrial buyers, with three customers accounting for about 93% of its sales revenue, while Editora Melhoramentos concentrates approximately 44% of sales in three customers, a characteristic that impacts commercial and credit risk management.

Regarding regulation and environmental and social issues, only subsidiary Melhoramentos Florestal depends directly on formal licenses to carry out its activities, involving agencies such as the State Institute of Forests (IEF), the Regional Superintendence of Environment (SUPRAM) and the National Health Surveillance Agency (ANVISA), in the case of molded pulp packaging. The company holds FSC 100% certification and states that it follows a Forest Management Plan aligned with sustainable development principles, emphasizing the protection of natural ecosystems, conservation of soil and water resources, maintenance of flora and fauna areas, prevention of environmental impacts and compliance with legislation. It also declares policies focused on occupational health and safety and on training forestry professionals. The other subsidiaries, including publishing, edtech and real estate companies, follow the social and environmental guidelines defined by the parent company, which maintains permanent preservation areas and legal reserves on its properties.

In the field of governance and ESG practices, Companhia Melhoramentos de São Paulo publishes an annual sustainability report, prepared based on international standards such as GRI and SASB. The greenhouse gas emissions inventory has been audited by an independent firm since fiscal year 2022, and the company prepared an ESG materiality matrix in 2023. Among the Sustainable Development Goals considered priorities in its strategy are SDGs related to education, water, energy, decent work, innovation, responsible production and consumption, climate action and life on land. The company is preparing to adopt the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in its report for fiscal year 2025. The MSPA3 and MSPA4 shares, traded on B3, represent an ownership interest in a group with a centuries-long track record in the paper and content industry, a current portfolio diversified across forestry, publishing, digital and real estate, and operations concentrated in the Brazilian domestic market, with no material revenue from abroad.