RANI3

Irani Papel e Embalagem S.A. is a company with a long track record in the paper and packaging sector in Brazil. Founded in 1941, originally to build a paper mill in Joaçaba, in western Santa Catarina (currently the municipality of Vargem Bonita), the company is headquartered in Porto Alegre (RS). In 1977, it obtained registration as a publicly held company and had its shares listed on the then Bovespa, now B3, where it is currently traded under the ticker RANI3. Over the decades, it has gone through expansion cycles, corporate restructurings and acquisitions, including the entry of Grupo Habitasul as controlling shareholder in 1994 and the acquisition, in 1997, of corrugated board industrial assets in Santana de Parnaíba (SP), a move that marked the beginning of the business verticalization.

From the late 1990s and early 2000s onward, Irani intensified investments in paper for sustainable packaging and corrugated cardboard packaging, installing a new recycled-based paper machine and expanding the production capacity of this segment in Vargem Bonita (SC). In 2005, it inaugurated a cogeneration power plant at its packaging paper mill in Santa Catarina, replacing a significant portion of fossil fuels with renewable biomass and generating carbon credits under the Kyoto Protocol. In the following years, it advanced in chemical recovery and capacity expansion projects, consolidating its integrated operations from the forest base to the final product. Starting in 2013, with the lease and subsequent merger of Indústria de Papel e Papelão São Roberto S.A., it expanded its geographic presence and established itself as one of the relevant corrugated board players in the country.

Irani’s corporate and market structure underwent significant changes in the 2010s and early 2020s. There was a streamlining of subsidiaries, such as the merger of Irani Trading S.A., and the discontinuation of non-core businesses, such as the furniture segment, which was fully discontinued in 2012. In 2020, the company changed its corporate name from Celulose Irani S.A. to Irani Papel e Embalagem S.A., more accurately reflecting its focus on sustainable paper and packaging. In the same year, it carried out a Re-IPO on B3, with a primary share offering that increased the free float and strengthened the capital structure, enabling the portfolio of growth projects known as Plataforma Gaia. Also in 2020, it migrated to B3’s Novo Mercado segment, with conversion of preferred shares into common shares, reinforcing governance practices required by the main listing segment of the Brazilian stock exchange.

Irani’s business model is highly integrated and, as of December 31, 2024, is organized into three operating segments: Sustainable Packaging (corrugated cardboard), Paper for Sustainable Packaging (paper) and Sustainable Resins (rosin and turpentine). Corrugated cardboard packaging accounted for 58% of net revenue in 2024, packaging paper accounted for 37% and the forestry and resins segment made up the remaining 5%. The company operates from the cultivation of pine forests, production of long-fiber pulp and kraft and recycled papers to conversion into corrugated sheets and boxes. The pulp produced is fully consumed in the manufacture of papers for flexible packaging, while recycled papers produced from scrap are used in the production of rigid packaging. This vertical integration aims to ensure supply security, operational efficiency and cost competitiveness.

In the Sustainable Packaging segment (corrugated cardboard), Irani produces regular slotted containers, die-cut packaging and sheets in different compositions, with customized designs according to the final product and the customer’s logistics chain. In 2024, this segment accounted for 58% of net revenue, with strong exposure to the food and consumer sectors. By volume, 2024 sales of corrugated cardboard packaging were mainly destined to meatpackers (36%), other foods such as pasta, cookies and fast food (27%), dairy products (4%), fruit and vegetables (2%), beverages (4%) and various industrial and consumer segments (27%), including plastics, cosmetics, chemicals, glass and paper and board. Products are sold mainly in the domestic market, focused on the South, Southeast and Center-West regions, with the state of São Paulo as the main market, followed by Paraná, Santa Catarina, Rio Grande do Sul, Minas Gerais and other states.

The Paper for Sustainable Packaging segment, responsible for 37% of net revenue in 2024, comprises the production of low- and high-grammage kraft papers in natural, white and colored versions, from virgin pine fiber and recycled papers produced with scrap. The product line includes specialized papers such as Fine Kraft, Flash Kraft, Flat Kraft, Flexi Kraft, Fancy Kraft, Bag Kraft, specialty papers and papers intended for the production of rigid packaging, such as kraftliner, testliner and fluting. A significant portion of paper production (around 60% in 2024) is transferred internally to the corrugated cardboard packaging segment, while approximately 30% is sold to the domestic market and 10% to the foreign market, serving countries such as South Africa, Saudi Arabia, Argentina, Chile, China, Kuwait, Paraguay and Pakistan. In Brazil, the main markets for paper are Bahia, Goiás, Minas Gerais, Paraná, Rio de Janeiro, Rio Grande do Sul, Santa Catarina and São Paulo.

Until the end of 2024, the Sustainable Resins segment, associated with forestry operations in Rio Grande do Sul, produced rosin and turpentine from the extraction of natural pine resin, focused on exports to varnish, paint, soap, glue, adhesive, enamel, disinfectant, insulation and perfume industries. The resins unit in Balneário Pinhal (RS) and the forestry base in the state generated products targeted mainly at the foreign market, with some volumes destined for Rio Grande do Sul. In a material fact disclosed later, the company reported the shutdown of these activities in the first quarter of 2025, reinforcing its positioning as a company focused on sustainable packaging on B3. However, the 2024 Reference Form still treats the resins segment as a continuing operation, in accordance with prevailing accounting standards.

Irani has five industrial units located in economically relevant states: two in Santa Catarina (production of long-fiber pulp, paper for sustainable packaging and corrugated cardboard packaging in Vargem Bonita), one in São Paulo (corrugated cardboard packaging in Indaiatuba), one in Minas Gerais (packaging paper in Santa Luzia) and one in Rio Grande do Sul (gum rosin distillation, operating until 2024). In addition, it maintains offices in Porto Alegre (RS) and Joaçaba (SC). In 2024, 87% of net revenue came from the Brazilian market, with 13% from exports to the Americas, Europe, Asia and Africa. The company operates with approximately 33.8 thousand hectares of owned land and 1.9 thousand hectares of leased land, with 16.3 thousand hectares of planted forests, as well as extensive areas of native vegetation, legal reserves and permanent preservation areas.

From a sustainability, energy and governance standpoint, the company highlights a significant base of self-generated electricity: in 2024, 63.5% of energy consumption was supplied internally, mainly by two biomass cogeneration plants and three small hydroelectric plants. All industrial units hold FSC Chain of Custody certification and Forest Stewardship certification for owned forests, and the packaging units hold ISO 14001 certifications, in addition to recognition in solid waste management, with more than 90% of waste not sent to landfills in certain units. In the governance arena, in addition to migrating to Novo Mercado and implementing management systems such as SAP S/4HANA ERP, Irani structured compliance, internal controls and internal audit areas. These elements, combined with the investment track record of Plataforma Gaia and the strategy of operating in renewable forest-based products, form the context in which RANI3 shares are analyzed by investors on B3.

Irani’s activities are subject to a set of regulations, especially in the environmental and energy fields. To operate, the company needs not only the licenses common to any business, such as CNPJ, location permits and fire department authorizations, but also specific environmental licenses and authorizations for its industrial processes, forest management and electricity generation. Operations involve compliance with the National Environmental Policy and the requirements of environmental agencies, in addition to regulations applicable to power generation, which demands continuous compliance management and relations with public authorities to obtain and maintain these licenses. In this regulatory and operational context, Irani Papel e Embalagem S.A. positions itself as an integrated company in paper, long-fiber pulp and sustainable packaging, with shares traded on B3 under the ticker RANI3, with revenue generation mainly tied to supplying packaging and paper to the Brazilian food and consumer goods industries.