Profile of Klabin’s supply chain

In 2024, 97% of the raw materials used by Klabin in its production processes came from renewable sources (reforestation wood, pine chips, eucalyptus chips and pulp from the company’s own operations or third parties), while 3% came from non-renewable sources (chemicals used in production processes). 

Klabin’s main suppliers are divided into ten groups: 

1. Water, power and fuel; 

2. Packaging;  

3. Machines and equipment; 

4. Non-productive auxiliary materials; 

5. Raw materials;  

6. Industrial chemicals and gases;  

7. Administrative and support services; 

8. Auxiliary production services; 

9. Logistics services;  

10. Technology. 

Supplier screening program

*Klabin recognizes Tier-1 suppliers as those with whom it has a direct supply relationship. 

**Significant suppliers are those evaluated by the Corporate Social Responsibility in the Supply Chain Program. 

***Internal transfer orders between Klabin companies are excluded from total spend. 

As part of its strategic transformation journey, in 2025 Klabin revisited its analysis of the percentage spend on suppliers, adopting a broader approach that compares the Company’s total spend with that directed to Tier-1 suppliers. This review will provide a more complete understanding of the impact of these partners on total costs, offering opportunities for resource optimization and efficiency improvements. 

Number of active suppliers by region and total expenditures made

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Percentage of purchases from local suppliers

Local suppliers are those based in the same state as Klabin’s operations (head office and branches). The percentage of local purchases considers total spend on the processes negotiated by the Procurement Area (except in Argentina and intracompany orders).

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Percentage of new suppliers selected based on social and environmental criteria*

*The number of suppliers classified as critical that participated for the first time in the Corporate Social Responsibility in the Supply Chain Program. 

This program evaluates suppliers according to criteria related to the environment, ethics, human rights and sustainable purchasing.

The Procurement Area is responsible for Klabin’s relations with its suppliers. Its activities are geared toward developing new domestic and international partners, coordinating the purchasing process, encouraging small and medium-sized companies to participate in the Company’s supplier base and creating synergies with the Production, Sales and Logistics areas. For three years, the area has been undergoing a strategic transformation focused on process optimization and efficient supply chain management, in line with best practices. 

Among other initiatives, the Company is reviewing its criticality criteria to improve the supplier registration, approval and evaluation process, making management more effective and strategic, and prioritizing suppliers with the greatest impact on the business. 

Supplier management is segmented between industrial and forestry activities, each with its own specific characteristics and different Klabin Sustainable Development Goals. In addition to a goal applicable to critical suppliers, 100% of which are covered by the Sustainable Supply Chain Management Program (see the 2030 Agenda section), there is a specific target for each segment. 

For wood, supply management and performance are covered by the Forest Certification Klabin Sustainable Development Goal, which emphasizes the FSC® certification process, support for the development of producers to meet ESG parameters (via the Klabin Forest Compliance Program), monitoring and traceability activities, and the Plante com a Klabin business promotion initiative. Find out more in the Forest Certification section. 

For industrial activities, the Klabin Sustainable Development Goal is linked to the development of 10 circular economy benchmarking cases in partnership with stakeholders. For more information, see the Resource Use and Circularity section. 

Klabin’s performance in terms of supplier management, performance indicators and commitments to the respective Klabin Sustainable Development Goals is monitored continuously by the Executive Board and the Sustainability Committee – the latter composed of members of the Company’s Board of Directors. 

ESG criteria in supplier selection and screening 

During the procurement process, suppliers are instructed to confirm compliance with the general supply conditions, which include ESG aspects that must be fulfilled during the execution of contracted services. Non-compliance with these requirements is prohibitive for the continuation of service provision until the supplier regularizes its situation. 

Contracts with suppliers are established through a screening and approval process, which involves evaluating aspects such as occupational health and safety, legal, commercial, technical, environmental responsibility, and financial factors. These contracts also include specific clauses for protecting labor rights, such as the prohibition of child and forced labor, child sexual exploitation on the roads, and environmental protection, among others. 

Suppliers of products and services undergo procedures for submitting documents attesting to their compliance with labor legislation and payment of social contributions and labor obligations, which may include inspections (second-party audits). These inspections include an inspection of labor documentation and workplaces in order to audit possible non-conformities. The procedure seeks the effectiveness of the conditions established for those hired directly by the Company, with employees physically present at Klabin's units or at another location determined by the company. 

The documentation related to the labor area can be monitored at the supplier's own facilities to enable more detailed analysis. In the event of any irregularities, the contracting area and the Supply department are responsible for taking action, which includes written notification to the supplier regarding rectification, suspension of payment until rectification of the detected issue, and affirmation that recurrence will lead to disqualification as a Klabin supplier. The disqualified company can only be rehired after a period of two years has elapsed since the contract was terminated. In the event of further irregularities during the term of the new agreement, the supplier is definitively disqualified.

Risks considered in the supplier screening process 

The company acquires a portion of its wood needs from third-party suppliers and may be adversely affected by price increases or the unavailability of wood. Therefore, the company considers possible impacts associated with regional risks (including political factors, regulations, and stakeholder relations), sector-related risks, and risks related to the supply of inputs. The company uses a mixed supply approach, consisting of its own wood and third-party suppliers. To mitigate risks, the company seeks suppliers with whom it establishes contracts for the purchase and sale of standing wood or wood to be delivered to its industrial units, as well as spot purchases. 

The wood price conditions are subject to market forces and competition with other crops (such as soybeans, sugarcane, and others) in the different regions where the company operates, which may lead to price increases and impact wood availability, adversely affecting its factories' supply, production costs, and financial results. The company relies on the supply of inputs, raw materials, and services for its operation. Increases in input prices can raise production costs and reduce the company's profitability. Klabin's operational units are supplied by various national and foreign suppliers and service providers.  

Many factors influence the company's competitive position, including plant efficiency, operational rates, and the availability, quality, and cost of certain inputs, such as chemicals, raw materials, and services. The availability, quality, or cost of such inputs can negatively affect the company's operational and financial performance. Increases in input prices may result in reduced profitability for the company if they cannot be passed on to customers.  

Definition of Critical supplier 

The criteria defining a supplier as critical are: the value of sales to Klabin (spend), representation in business units (Forestry, Pulp and Paper, and Packaging), recurrence more than six times (in different months of the year). 

Assessment and development of significant suppliers 

The supply chain management is carried out using the EcoVadis methodology, which evaluates Environmental, Labor and Human Rights, Ethics, and Sustainable Purchasing criteria for critical suppliers.  

Within the methodology, which scores suppliers from 0 to 100, the following criteria are considered: company size, country context, type of the product and potential for positive or negative visibility through external assessments. Assessment levels demonstrate suppliers’ maturity, as follows: 

• 0 to 20 points: high risk. 
• 20 to 35 points: medium risk. 
• 36 to 55 points: engaged companies. 
• 56 to 75 points: advanced companies. 
• Over 75 points: reference companies. 

The effort in relationship-building with each level of suppliers is greater for those scoring below 35 points, through support and development of this group, based on follow-ups of their action plans by Klabin's Supply area, across the four pillars covered by the platform, thereby increasing their level of engagement. That way, it is possible to increase the evaluation criteria based on the performance of this supplier over a medium to long-term period. The selected suppliers participating in the evaluation are those considered critical. 

Critical suppliers that do not adhere to the evaluation process are analyzed by a committee that includes the areas of Technical Management, Purchasing Management directly related to the supplier, Sustainability Management, Excellence and Innovation Management in Supply Chain, Risk Management, and Integrity Management. The analysis considers aspects associated with non-substitution and productive impact (critical materials and services).  

Since 2019, critical suppliers have been evaluated using this methodology, beginning with the first wave, when 110 suppliers were invited and resulted in 86 being evaluated, with a participation rate of 78% at the end of the process. Klabin's goal is to cover 100% of them by 2030. 

In 2024, the 6th wave of supplier assessment and reassessment was carried out, with 85 invited and 82 assessed, resulting in a 96% participation rate.

• 32 suppliers participated in the assessment for the first time.
• 50 suppliers were re-evaluated from previous cycles, including:
• 9 suppliers classified as Medium Risk (25 to 34 points) in the 2022 assessment;
• 31 suppliers classified as Moderately Engaged (35 to 54 points) in the 2020 assessment;
• 10 suppliers classified as Advanced Engagement (55 to 84 points) in the 2019 assessment.

The topics assessed covered the areas of Environment, Labor Practices and Human Rights, Ethics, and Sustainable Procurement.

Internal training on ESG practices for suppliers 

Furthermore, as part of Klabin's Climate Transition Plan, the Company has begun to raise awareness in the supply chain by providing training and capacity-building for suppliers with lower maturity levels in carbon emissions management.