Suzano Transforms Pine Bluff Mill Into National Packaging Leader

Fabio Almeida, president of Suzano Packaging USA, has led the turnaround of the 69-year-old Pine Bluff mill. (Steve Lewis)

After more than two years in Vienna and four more in São Paulo, Fabio Almeida took on a tough mission last year in a far different locale: Pine Bluff.

His task as president of Suzano Packaging USA was to turn around one of the Arkansas Delta town’s largest employers, the former Pactiv Evergreen paperboard mill.

Almeida arrived in Arkansas with a detailed plan. Suzano SA, the world’s largest pulp producer, honed its priorities over months of due diligence before the Brazilian company bought the Pine Bluff mill and a smaller North Carolina facility for $110 million. The deal closed Oct. 1, 2024.

“We had enough time to get to know the business and the people,” Almeida said in an interview. “Suzano has 14 mills in total, and we knew the challenge we would face. We are very good at operating wood pulp and paper mills. That’s what we’ve been doing for the past century.”

A little more than a year after taking over the 800-worker mill, Almeida reports that the company has spent $62 million to clean up the plant, modernize old and leaky equipment, and replace bathrooms that were foul enough to depress employee morale.

Now more than 60% of the cold-packed milk and orange juice cartons in the U.S. originate from Pine Bluff, and the paper plant is profitable again. It’s also continuing to use Arkansas-grown trees exclusively rather than importing Brazilian eucalyptus.

‘Heavily Underinvested’

“When we came here, we found that the mill was heavily underinvested, in terms of maintenance and housekeeping, but we knew through our due diligence that there were opportunities,” Almeida said. “We had good people and a good talent pool, and a strong position in logistics.”

The plant has employees who have been making paper products for decades, and Pine Bluff has advantages in trucking, rail lines and barge transportation on the Arkansas River.

“We have good connections here, and logistics in the U.S. can be a big challenge,” Almeida said. “And the most important thing for us was that the fiber source is vast.”

Arkansas’ dense forests offer good-quality fiber at remarkably low prices. Those prices have been depressed for years, and Suzano saw a chance to reach out to Pactiv’s suppliers and negotiate contracts, which helped put the plant back in the black.

“It’s probably the best, most competitive fiber in the whole United States,” Almeida said. “We knew we would have a challenge with an old, underinvested mill, and that we would need to do a lot of things in terms of maintenance and safety. But we just needed to come in here and manage the business in the right way.”

Almeida laid to rest speculation that the plant would start importing eucalyptus wood from Brazil. Suzano owns some of South America’s largest tracts of eucalyptus, but Almeida said that economically, locally sourced fiber made more sense.

“We have several different wood suppliers, most of them family- owned, and most of them from a radius of less than 100 miles from our mill,” he said.

The plant has received only one truckload of eucalyptus, and it came from Florida, Almeida said. “It was a one-time issue we had at the mill, and it was about 25 tons. We use more than 1,000 tons [of Arkansas-sourced wood] per day.”

The purchase from Pactiv Evergreen gave Suzano a chance to re-envision the Pine Bluff business model and revisit deals with customers and suppliers, Almeida said.

“We revised all our contracts with customers. And in order to price our products according to what we thought would be fair to our customers, we sat down with each one of our suppliers in order to lower our cost of raw material and services.”

Suzano also revamped management techniques to get more value out of labor and equipment, and to make the plant safer.

“We were able, in the first year, to bring the cost down a lot, to price our products better than they were priced before, and to run the mill better. That combination is giving us a positive result, a positive financial result in the first year of operation, coming back from a very negative result last year.”

Almeida said Suzano’s capital expenditure at the plant this year is going to be $62 million, three times more than the average annual spend by the previous owner. “We’re trying to catch up. Next year, we’re going to be spending more than the average as well. We’re trying to do the right things, looking at the right projects, to increase runability and improve quality.”

Over the past year, the plant has reduced quality claims from customers by more than 40%, and cut lost time for safety issues by 70%, Almeida said. “We’re very proud of that.”

Where the Money Went

So what was that $62 million spent on?

“As soon as we got here in October [2024], we couldn’t run a machine for two weeks because we didn’t have the right spare part. We had to buy a bunch of parts, so part of the money went in that direction. Another part of the money went into creating some critical processes and equipment we have in the system.”

For example, one of the paper machines was leaking gallons upon gallons of oil. “We reduced that leakage by 95%, but we spent lots of money trying to fix that,” Almeida said.

“We’re also spending money to provide a better work environment.”

One priority was improving the 30 employee restrooms at the 4,700-acre site. “They were just horrible, really not in good condition for the employees,” Almeida said. “So we have [renovated] 10 of them over the past year, and we’re going to do more next year. That’s a couple of million dollars in just bathroom renovation.”

Other projects include road repavement, painting and general maintenance and housekeeping. “We have taken tons of scrap out of the mill to provide a cleaner, safer workplace for the people,” Almeida said.

Next year, the mill will turn 70 years old (see timeline). It manufactures two products, solid bleached board for paper cartons and cup board and polyethylene terephthalate (PET) trays, which are recyclable packaging products used for fresh produce, meats, microwaveable food and more.

“The majority of the liquid package board in the U.S. today for fresh applications comes from this mill,” Almeida said. “I’d say we have a pretty good market share, between 60% and 70%.”

The liquid packaging board market is growing about 1.5% annually, but it’s very stable, Almeida said. “You see some decline in orange juice consumption, because people are drinking less of that. But they’re consuming more almond milks and premium milks, so the net result is still slightly positive.”

The cup stock and PET tray market is growing more rapidly as consumers turn away from foam plastic cups. “It’s a growing market, and we want to be part of that as well.”

Right Place, Right Time

Almeida, who has been a Suzano executive for 18 years, started his career in 1995 in São Paulo, the most populous city in the Americas. He spent about five years in the early 2000s in the U.S. as a business and global products manager with DuPont.

He concedes that working in Pine Bluff is quite a shift from Vienna, where he worked as head of Suzano’s pulp business in Europe and the Americas. But he is content in a quieter environment at this stage of his career.

“My wife and I are Brazilian, but we’ve moved abroad three times,” he said. “We had a great time in Europe, but we like Arkansas. It’s smaller and quieter, but right for the phase of life we’re in. We have three kids in college here in the U.S. Our kids are Americans. The people here are friendly and nice, and we were welcomed into the community.”

Publicly traded Suzano is determined to be a good neighbor in Pine Bluff, Almeida said. Economically depressed Jefferson County is, in some ways, similar to rural parts of his homeland.

“Most of our mills in Brazil are in remote areas with a lot of poor people around. So in order to operate a successful mill and keep operating, we work to feed the community to have a sustainable workforce. We came with the same mentality here, where our mill is in probably the poorest area in Arkansas.”

Suzano is working with the University of Arkansas at Pine Bluff as a source of talent for the mill, and it instituted an internship program this summer that it will extend next year. Some interns got offers to return as full-time employees.

“We are sponsoring the Arkansas Travelers,” the North Little Rock-based minor league baseball team, “and we’re trying to bring back pride in the people who work in the mill,” Almeida said.

Suzano is fighting substance abuse in the workforce with random testing, but not with a punitive mindset, he said.

“The results were quite high in the beginning of this, but we worked with employees to manage the problem. We engage with them to try to help, and that’s the step we’re taking now.”