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Message
from the CEO

António Redondo
CEO, The Navigator Company

The year 2021 was very important for Navigator as we released our Corporate Purpose and our 2030 Responsible Management Agenda. Based on a wide-ranging stakeholder engagement exercise, this agenda was developed collaboratively and identifies the most relevant issues for the Company’s future. The commitment expressed in The Navigator Company’s purpose reveals how we position ourselves as a business venture. By asserting that ‘it is people, their quality of life and the future of the planet that inspire and motivate us’, we aspire to “Create Value Responsibly”, the core concept in our 2030 Agenda.

Although 2021 presented a series of challenges, not least in higher cost factors, such as raw materials, energy and logistics, breakdowns in supply chains and the continuing pandemic, Navigator and its people demonstrated great resilience and the ability to act collectively and with determination. I would therefore like to highlight the central thrust of our action in the three strategic areas of our 2030 Agenda, which are in line with the response to the top three risks classified as most severe by the World Economic Forum (“The Global Risks Report 2022”): climate action failure, extreme weather, and biodiversity loss.

Nature

Planted forests are fundamental to the transition from a linear, fossil economy, based on finite resources and hostile to the climate, for which there is no future, to a sustainable circular bioeconomy, based on renewable, recyclable and biodegradable forest products, beneficial to nature and climate-neutral. In view of this, Navigator has stepped up its efforts to work with others to promote sustainably managed and certified forests, helping to create forests that are more resilient and offer better yields. An example of this is the Premium Programme which, from 2018 to 2021, involved more than 250 landowners over an intervention area of more than 4,500 hectares. This provides real support for producers in several areas, ranging from the preparation of forestry plan and recommendations of technical silviculture options, to good practices in forestry operations, resulting in positive environmental and social impacts

Equally important was the work done to consolidate the knowledge sharing platform at Florestas.pt, a project coordinated by RAIZ, our forestry and paper research institute, as part of its efforts to disseminate technical and scientific expertise in the field of forestry. A total of 19 sessions were held in 2021 with academics, and 18 authored articles were published. Also, in the area of education and knowledge, RAIZ and The Navigator Company have joined forces with the Calouste Gulbenkian Foundation to launch the Floresta do Saber (Forest of Knowledge) project, with support from the UNESCO National Commission in Portugal. The aim is to educate, empower and raise public awareness of the importance of forests, sustainability, and the forest-based circular economy, with a special emphasis on reaching young people. These initiatives are in line with our Purpose of sharing our knowledge, experience, and resources with society in the search for a better future.

In its R&D activities, RAIZ has remained focused on efficient use of resources throughout the value chain, from the production of improved seeds, in the forestry sector, to optimising the use of wood and water in the production process. Work was completed in 2021 on setting up a new seed orchard, which will make it possible to increase production sixfold, as from 2024, and provide the Portuguese market with more than four million improved plants each year. An important aspect of Navigator’s management model has to do with biodiversity conservation. More than 800 species and sub-species of flora and 245 species of fauna have been identified in forests under the Company’s management; around 12% of this area comprises conservation interest zones and an area of 4,075 hectares is classified as protected habitat in the Natura 2000 Network. Progress was made in 2021 on several restoration projects designed to maintain or improve the state of conservation of natural and semi-natural habitats, over an area of around 53 hectares.

In line with our commitment to make responsible use of resources, a reduction of 6.7% was achieved in specific water use in industrial operations, in relation to 2019, the baseline year for the Programme for Reducing Water Use being implemented in the Company, and measures taken in 2021 under the Corporate Energy Efficiency Programme resulted in improved energy performance at the four industrial complexes. The fact that the Company recovers 88% of all waste generated also demonstrates our commitment to circularity.

Climate

We have adopted a pro-active approach to finding solutions to the climate challenge and maintained our focus on the Roadmap to Carbon Neutrality, which will enable us to make an 86% cut in direct CO2 emissions (scope 1) by 2035, in relation to 2018. In 2021 alone, emissions were slashed by 30.1%. This was achieved by implementing our plan for investment in technologies using renewable energy sources, such as forestry biomass and solar. A significant development was the start-up of the new biomass boiler at Figueira da Foz, making this the Group’s first integrated pulp and paper mill to generate power entirely from renewable sources. Another important step was our investment in solar power plants, which now have total rated capacity of approximately 7 MW. By way of illustration, we achieved an overall reduction of 57% in CO2 emissions at the Figueira da Foz Complex. Our clear commitment to contribute to a low carbon society, by reducing GHG emissions, on the basis of the latest climate science, also lay behind an ambitious project to analyse our carbon footprint, culminating in our decision to sign up to the Science Based Targets initiative (SBTi) at the end of the year.

At the same time, the Company waived the two-year period permitted for presenting its targets, submitting them immediately on signing up to the initiative. The science-based near term targets submitted for scopes 1 and 2 seek to respond to the plan established in the Paris Agreement for a temperature rise of not more than 1.5ºC, and in the case of scope 3 for an increase of well below 2°C, in relation to pre-industrial levels.

At the same time, the Company waived the two-year period permitted for presenting its targets, submitting them immediately on signing up to the initiative. The science-based near term targets submitted for scopes 1 and 2 seek to respond to the plan established in the Paris Agreement for a temperature rise of not more than 1.5ºC, and in the case of scope 3 for an increase of well below 2°C, in relation to pre-industrial levels.

Society

The most crucial capital investment of an organisation is in its human capital, its people, in their skills and professional development. This is what lies at the heart of Navigator’s Purpose and strategy and can be seen in the action plans we have been developing and implementing. An important development here was the new careers plan for technical operatives, applying to 1,958 Employees and providing for pay at more than 40% above the industry average. Also, under this package, more than 500 training initiatives were organised in different areas over the course of 2021, with total investment of 1.24 million euros in the Training Plan.

At this very demanding time for all of us, as a result of the pandemic situation, we also focused on improving Employee benefits, including contributions to education expenses, health and life insurance, as well as extending sick pay cover. These benefits are equivalent to 1.25 average salaries.

Several programmes have been designed to support local communities, in the fields of education and rural development, with a special emphasis on educating people about the value of sustainable forest management and certification, contributing to better forests. By way of example, the “Dá a Mão à Floresta” (Give the Forest a Hand) roadshows reached 8,000 children in 2021, some 10,000 forestry producers experienced the impact of the Forestry Producers project and more than 5.5 million euros has been invested to date in the Social Development Programme in Mozambique.

All this progress in developing a sustainable business has been underpinned by substantial investment in R&D and innovation. Navigator and other companies in the sector are involved in promising R&D projects to generate a wider range of tree-based bioproducts, some of them substituting products currently obtained from petrochemicals.

In the near future we will have biofuels for road vehicles, ships and aircraft, as well as food supplements and bioactive compounds for nutraceutical use, including prebiotics, to give just a few examples. Work has started on building the new Pilot Laboratory for biorefineries and bioproducts; this new facility will help boost new forest-based ventures.

As in the past, Navigator has a vision of growth based on the pursuit of innovation and differentiation. We want to diversify while still investing in tissue, as well as to create and then consolidate a packaging business. We are developing innovative solutions for the hygiene and health market, such as tissue products with additives, including lotions, perfumes, softeners, antibacterial and antiviral substances, and repellents. And in 2021 we launched gKRAFT, a new brand of packaging papers.

At the same time, we are developing our operation in Mozambique, which has started out by producing timber for sale, a venture we see as a firm platform for growth in the long term. Also taking a long-term view, we are working on several other innovative projects to explore ideas in the fields of biofuels, green hydrogen and biocomposites.

The Company is leading an agenda called “From Fossil to Forest”, which includes investing in research under the Recovery and Resilience Plan. The main focus is on developing a set of packaging solutions centered on the gKRAFT brand launched in 2021. Alongside this, we are producing microfibrillated cellulose to develop mechanical properties in these papers, such as functional barriers (against fats, liquids, and other substances).

The gKRAFT brand responds to our decision to diversify and expand the Group’s business portfolio and offers a clear example of this strategy. This is one of the most important launches in Navigator’s recent history, because it shows how innovation is necessarily the way forward when we seek sustainability that is lasting and relevant to people’s lives and their future. In this case, by offering an alternative that makes it possible to reduce the use of fossil-based materials, such as plastic, and replacing them with renewable and sustainable forest-based materials, like the paper featured in these new packaging solutions.


I firmly believe that we are a bioindustry on the right side of the future.