Good afternoon, everyone. Thank you for being here for another Dexco Day, and this is a partnership with Abimec. Today, we're going to present some of our results for the third quarter and our long-term strategy. This event will be split into two sessions. First, we will have the presentation from the executives, and then we'll open up for some questions. Over to Antonio.
Hello. Good afternoon, everyone. Thank you for being here. It's a pleasure to be able to have in-person meetings again after two difficult years. It's always better to be face-to-face and talk, so this is very important for us. We have a presentation here. Our aim is to show what happened during the last quarter and also our expectations for the rest of the year. Basically, we are celebrating a special moment.
We recently completed one year since Dexco was rebranded with the new corporate brand. I think you all had the opportunity of seeing how the brand was launched, and we also presented an investment plan for the medium term, last year. We also did it online, as you might remember. At the time, we were still under lockdowns. Now it has been one year since we started this new journey with the company. The management and shareholders have been very happy about the results obtained by Dexco because this is an important step. It's not only a rebranding, but we're starting a new identity. We're starting with a brand that connects to this moment the company is in and its new business portfolio. It removes duplicities between the previous brand, Duratex, which was the name for a product, but also the name for the company.
I think it was a very fortunate decision. I think our clients already use Dexco every day. Brands remain strong, and our company is based on brands. Duratex is our flag bearer with wood panels, but we also have Deca and Portinari that coexist very well with the new corporate brand. We were very happy about the launch last year. Last year was spectacular, so we continue to follow our projects that were launched under this new brand. This year, we have continued to capture synergies among our businesses. You might remember that last year we started merging, especially Deca and ceramic tiles. This merge is still ongoing. There are still points to be adjusted. It's a complex process. There are several brands, and we are reviewing the model that we use in connecting to the stores.
You'll hear about this soon because we had one kind of partnership in ceramic tiles. We had a different kind of partnership in Deca, and now they're being joined together. This is an ongoing journey. Our investment plan is BRL 2.5 billion. This was announced last year, and this was the budget for 2022, 2023, and 2024. We've made some adjustments to that plan. The plan is currently close to BRL 2.1 million. We made two relevant adjustments. The first one was that we suspended an expansion plan with new furnaces for sanitary ware. It has been suspended for now. The market is receiving enough from our capacity, so this was suspended for a bit. We've kept our focus of investments in automation and increasing productivity and so on.
We also made some slight adjustments to the investments we've made in metals, especially in terms of production capacity and we had planned to buy more machines than we actually did, so we reduced it from 2.1. We're still strong on that, and we're continuing to make investments, especially in the new ceramic tile plant in Botucatu, which is under construction, and that should start operations in September next year. All other investments have been maintained, and we're focusing on them because they represent what we want to do in the company in the next few years. We're also investing a lot on servicing clients, trying to make our client service better. Since we are joining different areas, there are some logistical issues in Deca and RC that we're working very much to resolve. This is a long conversation.
We would need an entire afternoon to show this to you. But we're trying to get closer to our consumers, putting the end consumer at the core of our decisions here in product development and in many other things. That's very important. In the past, we were essentially B2B. Now, we continue to be a B2B company. We're still selling through our partners, through retail, through stores, but we have a lot of information on our end consumers, so we are ready to service them better. That's our vision. We're working on our digital transformation. Daniel will discuss it. Innovation is also on our agenda. We have made continuous efforts, especially under Glízia, in continuing our cultural transformation. If you've followed us for some time, you know that we changed a lot, not only our business portfolio, but there was a major transformation. Okay.
Apologies for that. Let's continue. We had to start this cultural transformation, and it's very important for the company, and it's ongoing. We are now in a new round, perfecting many things. We truly are a company in transformation. The new snapshot of the company that you see here on the right of this slide shows that we have a company that is focused on two or three main business areas. One involving wood, where we have panels and floors, and also dissolving pulp. You recently heard in the third quarter reports; this was our first earnings reports with dissolving pulp. This was a ramp-up process taking place. Raul will mention it when he speaks, and we hope to reach full capacity by the end of the year.
We also have finishings for construction with Deca, metals, sanitary ware, and tiles. This area is becoming more relevant in the company. We call it DX Ventures. We have companies that received direct investments from our funds, such as Urbem, Noah, and Brasil ao Cubo. We're very happy about these results. Not the immediate financial results, but how the projects are continuing. They're doing very well.
I apologize. My apologies. We plan it all and not always does it work out fine. Anyhow. As you will see, Haddad is going to show to you the third quarter results. It was difficult because usually the third quarter is the one that is best for business. It is usually one of the best of the year. We have an atypical year, but we would like to tell you that we are at a whole different level. You can see that in nine months we managed to accomplish more than we had accomplished in 2020. Pandemic, you know, hit us and people were questioning, are we going to go back to the levels pre-pandemic? No. We have shifted levels, and last year it was an outlier year.
Of course, we had a whole set of factors that were highly positive factors in the entire sector. Definitely we should have the second-best year in the history of the company, even taking into account that, we are facing a bit more of, difficulties. And this chart shows the evolution that we've had in terms of EBITDA, generation and the business resilience. Now Haddad is going to follow through. Continuing with the presentation, I'm going to talk about results, cash flow, and indebtedness. This is what we talk about when we discuss the results of the company. Now, talking about results in the third quarter. As Antonio mentioned, it was a very atypical quarter. We usually are at the best season at this time of the year. Well, this seasonality has been shifting around, quite importantly.
Anyhow, even if we take into account the market volume that is well below expectations, we are now delivering results that really shows that we are at a whole different level. Revenues, more specifically. We were able to maintain a premium price, and this is quite relevant to us because if we go back into the past, we had greater volatility in prices. At that score, we somewhat lost the price construction because of a more aggressive approach of the competition. Raul is gonna talk about this. Speaking about wooden products, we see a quite different scenario in terms of costs and also in terms of the availability of the forestry. Later you'll hear more about this.
At the end of the day, BRL 460 million in the quarter, at nine months accumulated, we did more than we did in the whole year of 2020. We are all very much focused. Our spirit is working on what we can control. I've been repeating this because we are sure that we can play an influence on the market conditions. We may be better or worse than the competition, but whatever is under our control, we keep on investing, we keep on working hard in the cost management to keep on generating results quite effectively. My final remark to you is that we'll now start reporting what's not everything that you would like to see under TDLD.
As of the fourth Q, LD will become operational, but we have an idea on the EBITDA, and we have this result on the assets, the equity equivalence. It's not in the recurring results, but in terms of equity, we can see that we'll be able to build the intrinsic value of the operations at that score. Talking about the cash, the cash flow. I have three points to address with you. Something that you saw in the first chart, we had an EBITDA reduction which reduces the operational cash generation. Something else that is quite relevant, but we believe that it is part of our strategy to keep up the CapEx. Regardless of being in this more challenging moment, we decided to keep on investing. We are doing the fine-tuning of the investments.
We want to be sure that we'll make investments that only make sense. This really is in line with our commitments as we announced last year, I mean, investing in areas that will really add value to our results, having, you know, a differentiated level of return. This also has to do with our investments in forests. The reforestation investments, if you look at it, we have increased our pace in investing in reforestation. This is natural because we spent two years using our forests even more than what we had done in the past because of 2020 and 2021, the years of the pandemic. We don't think this will last for long. It will last up until 2024, more or less, and then we are going to resume more appropriate levels, and we believe this is highly positive.
Although there are some disconnects in our balance sheet, we have room to deal with the instabilities. Finally, it's the working capital on sales volume. Well, working capital is at 16% today, and we think it's quite sound for the organization. We're still adjusting, so we have been working with the business units. This year, because of the market volatility, we've had pressure on inventories. Today, the snapshot is working capital that is quite reasonable. We even had more than 30% working capital on sales volume. That was, you know, three years ago. This results from working. All of the business operations have worked on that.
We still have to adjust, especially in terms of the stock. So our cash flow is positive for the year, much lower than the one that we had last year, but we still have a quarter ahead of us. There's much happening, and the essence of cash generation has not changed. So we have a positive stance in terms of cash flow. Finally, indebtedness, the debt level. While it's natural when you have, when you face more difficulty in generating, you know, operational cash, the pressures on indebtedness, the leveraging is a bit below two, and if we do the math, it's 1.96. So our leverage level is quite healthy. Some say that it's too conservative, but that's the way we work. We'll keep it up. The leverage will be addressed in a very controlled fashion to be able to support investments.
We don't want to change direction now or change frequently direction. We believe that the setup of our debt helps us to be reassuring in terms of the soundness of the corporation. We have an average term that is long. We have reasonable cash flow that is really, you know, reassuring for us to pay, you know, the debts over three years. Recently we renewed our revolving credit line. It's not a traditional operation here in Brazil, and it's done in BRL, so we are quite reassured in terms of cash balance, even under more difficult circumstances. Now I'll pass the floor to Marcelo. Marcelo is going to follow through with the presentation for construction materials.
Good afternoon, everyone. Thank you for being here. I have a couple of comments that I have to make on Antonio's, on what Antonio said. One of them is the new level in which Dexco is and the challenge to understand the external environment and how unfavorable it was for our results. From now on, we're going to go deeper into the sectors we are in, especially in Deca, ceramics and how it affected our results. Starting with Deca, that includes metals and sanitary ware. Abramat has some information on how the industry is doing. It's not only reflecting the categories where we are. This is the extended industry, but we can see that in the last three quarters, there was a reduction in deflation.
When you look at the last few quarters, the Q1 had 10%, the second, 7%, and the third quarter, 5%. Showing that year on year, it has contracted by about 7%. Of course, this impacts our business, starting with volumes. What happened to our volumes at Deca and in the first nine months? As we said, in the Q1, we had a challenge. Our volumes contracted by about 24%, which means that in the first nine months, we had an 18% contraction of the volumes sold. What variables explain this? First, sellout of our categories in retail, which reduced by double-digit levels. This is offset by our share of the market, but we had a significant impact on inventory.
In the last nine months, they reduced our inventory by 30 days, and that creates severe consequences in our ability to sell. In the 30 days that were reduced in the last nine months, 15 were in the last quarter only. With the price policy that we've been using and with our mix, which we believe is much better now, we had higher unit revenue, and it went by 18%, 25% of which was in the last nine months. This is a clear consequence of our policies and what we've constantly been talking about, our strategic goal pillar, our excellent execution and continuous improvement, how strong we are at implementing price realization and improving our mix. It means that our revenue went down by 5% this quarter, but with a slight growth of 2% in the last nine months.
Of course, with this size, when your volume goes down, your EBITDA is significantly impacted. When you look at the quarter, we are at 47% of our EBITDA. It's a significant drop. I can say that the two main drivers for this contraction are the lower volume and SG&A, an impact from how our direct labor was diluted, and that impacts our costs. Basically, the main drivers for the negative performance of our EBITDA was due to our volume. When we look at the nine months, our EBITDA went down to 12%. As a reminder, in the Q1, we were growing by 20%. This third quarter was tough, and our performance turned around from a growth of 20% in the Q1 to an accumulated result of 12%.
When we look at ceramic tiles, looking at the sector environment, this is a simpler analysis because we're comparing data head-to-head. Differently from what we saw in Abramat's data, we saw that the contraction of the industry has taken place across all quarters. In ceramic tiles, it's a bit different. This is data from Anfacer that refers to retail. We can see that there was a higher contraction. The volumes contracted around 19%, meaning that in the last quarter, they had a reduction of 17%, and in the first nine months, 14%. How does it affect our performance? From a volume perspective. Let me just remember the figures here because I can't see the slides from where I am. Just a second, please. This is why we need a screen.
Our volumes went down 18% in the first nine months, and in this quarter, 26%. This is basically due to a simple reason. The main drivers are the market. When you look at our performance in the Q1, our share of the retail market was flat. We did not lose any market share. We basically had reduced volumes because the market itself was reducing. In the third quarter, we had a 1.1 percentage point reduction in market share. In the third quarter, this was right after June, we were impacted by the inflation on gas and energy. We tried to raise our price, and for some time, we had a price gap that led to a lower market performance. Basically, this volume is lower because of a sharp drop in the entire sector.
You saw that in the last month of this quarter, in September, there was a reduction of 19%, but we did not suffer in market share. That means that we had a 0.3% loss of market share, and the main driver was in the last quarter. Our revenue went down 5%, similarly to Deca, but we had a growth of 2% on the first nine months. EBITDA went down due to the volume, as I said. I can guarantee that our driver for EBITDA is our reduction of our volume, 19% this quarter and 2% on the first nine months. I hope I made it clear how our quarterly performance was affected and what were the drivers.
Now let's talk a little bit about our strategic pillars and how we want to continue with our agenda in the future. How do we see our strategic pillars for the next five years for this business unit? As you know, Antonio mentioned this in his presentation, we made some recent changes to our two business units, Deca and Ceramic Tiles, and we started creating a strategic growth agenda defining what role each business would have. Our aim was to maximize value for our shareholders. This is our strategic aim, maximizing value. Of course, by allocating resources, and I mean human resources, financial resources, we are doing it to the businesses that we believe will leverage value for our shareholders. Of course, we have some homework to do.
We have a commitment for the next five years to create a business unit that has the lowest level of claims for the construction material industry. This is a huge ambition that we have, and in order to do it, we need to maximize value for our shareholders with higher service levels for the entire industry. We believe that based on these strategic pillars, we will achieve it. Without a doubt, excellence in supply chain is a key driver to make it tangible. We've talked about this before. We will continue to have operational efficiency, meaning that we will continuously seek productivity and efficiency. The industrial renewal that we presented to you in Duratex Day in June 2015 is a part of our innovation process.
All of the new assets, that Antonio just mentioned and the investments we are making are also a part of it. One more pillar is how you use the, sales execution platform to support your business. We need to be efficient and productive in generating sales and for the results for our business area. We are also consumer-centric. That's an important, step. I don't think there's any innovation projects currently, at least in this business unit, that is not, having any collaboration from our clients and our consumers. One of our metrics is that all of the launches that we'll have next year, 75% of them should be based and validated, with consumer insights and by the consumers themselves, and that's the direction we're headed towards. It's an important step that the company is taking. As Antonio said, this is a drastic change.
We are becoming a consumer-centric company. We're getting consumers to help us and make decisions every day. Of course, people are one of our pillars. Gleise is going to talk about the cultural transformation we're going through, how we're looking at our human capital. It's a part of my initial comment on how we allocate human resources correctly so that we can maximize shareholder value. Finally, our last pillar is growth through M&A or in asset light companies. Regardless of what it is, this is a pillar that we're always looking towards in categories that can complement our portfolio, but we are paying special attention to the investments that we announced so that they become tangible as returns as we expect from these projects. I'll pass it over to Raul.
Thank you. Thank you for coming. It's very nice to have you all here with us in person after some time, right? That's my fifth quarter with Dexco leading the wood panels division. It's interesting to see how the scenarios have been changing, but what's quite clear, what Antonio and Marcelo said, how the company shifted levels. I'm gonna show the results of the quarter, and I'm gonna show you the fundamentals and why we strongly believe that we have been able to materialize the operations at a whole new level. Wood sector environment. Compared to 2021, it seems to have a drop, an important drop of 15%. That is the wood panels for the domestic market. We've had a higher volume of exports, 30% higher. All in all, 10% difference.
At MDP and at MDF, we see, you know, similar drops. MDP is used for furniture. Furniture, they have a quite important impact. We believed that this segment could suffer more, and it happened. The pace of the drop. We began with a higher drop at the MDP segment, 17% in the year, but this last quarter, it reduced less. It shows a slow recovery in this segment. It's promising. It should be in a better level from now on. Well, this is what we see in panels. We see a reduction of occupation in the sector. This was very much concerning in the past, when we had lower rates of occupation. Today, we are not that much concerned because ourselves and the sector understands what's the optimal capacity.
I mean, operating at the right capacity to provide the best return on the assets. We have been practicing this, and we have been reaping good results. One of the key fundamentals, and we have been extensively addressing this, Antonio was one of the first was talking about the blackout in the forests. Some things we believe they will happen, they never happen. This blackout, people talked about it, and it seems it is now materializing. From 2021 today, the price of the wood in the south, where we have more competitors, the price has doubled in little time. If we take the long term and we analyze 2019, 2020, it grew threefold or fourfold. That's a very important increase because we use this wood to manufacture the panels.
It's also a fundamental condition because it's not only about price, it's about availability as well. With the new forestry projects in Brazil, we see a very high pressure on prices, and we see pressure on availability as well. It's not a matter of, you know, willing to buy wood. You have to be able to purchase wood. This is why we see the prices sustaining, I mean, sustaining the same level. In our case, there was a slight improvement, and this was led by the mix. This is a long-term strategy that we have implemented, you know, using the premium mix, more added value mix. This is what we have for wood, but it's important to bear in mind that this will be a recurring topic.
For those of you who track pulp, you will see that most pulp projects, they're not 100% self-sufficient. With pulp, we need to work at full capacity. Buying 5% of what's missing in the margin to fill up the capacity eventually accounts for consuming wood from so many other companies that are our competitors. It is a highly important topic, and I would like to draw your attention to the northeastern region. We have a growth plan. It's a new forest frontier. We are thinking about the future. We have less competitors there. It grew less than in the other sites. We have very good yields if we compare to the yields that we have in São Paulo today. Northeastern region is a quite promising area for us to keep on developing the forestry projects.
Plans we are going to discuss later. These are the results. We have been sustaining the volume. There was a reduction of 7%, much lower than that of the market, but with a very good level of occupation, especially bearing in mind that we've had stoppages, we've had downtime in the plants in the third Q. Maybe if we had not had, we would have had more productivity. MDF was above 90 in terms of capacity, which really shows our strategy of differentiating in MDF. Revenues went up, the gross margin went up as well. The prices have been kept. We were aggressive to scale our prices over 2021. This was important for us to start this year at a good level for us to support the same level with a slight improvement because of the mix.
Well, this could not live up to the acceleration of costs early in the year. This really deteriorated our margins because we didn't have the appropriate environment to promote high price increases over this year. Anyhow, with our mix and with the cost level, with our strategy to distribute with the go-to-market strategy, we were able to keep the levels that we are showing to you here. 7% less volume, as I mentioned, as compared to the nine months of 2021 with the nine months of 2022. Pulp. Pulp is quite interesting. Many of you have been speaking about dissolving pulp. We are quite curious to know when this market will be understood, priced and taken into account in our results. The most important information here is not only about the results, but actually the pulp price has been maintained.
Dissolving pulp is more resilient. There are fewer players. We work in a more specific market with more added value. The pulp prices have had even a slight increase, much better than the prices that we took into account when we made decisions about this project. Good information, good news. In Brazil, in dissolving pulp, we have the best cash costs in our plant. It is very close to the forests. The cash cost level is highly competitive in this case as well. The most important information in this slide, and Haddad spoke about this, we have recurring net income. This starts to affect the EBITDA, but the most important information is on the upper left corner as of the fourth Q, we'll consider this operational earnings. We are ramping up.
Actually, the ramp-up has been concluded, and the key information is that on the fourth Q, not only are we going to be very close to the full capacity of this plant, but we managed to identify superior quality, which is key. High quality way above what we thought, which is key for us to sell at premium prices. We can see that this plant may produce more. As any pulp plant, there is a creep. We've tested the sanitary processes, and it can yield even more. We tested the engineering process of our partner, which is very much appropriate, the Lenzing, who's our partner, so they are delivering high-quality results. Henrique and I were in the board meeting with the joint venture today, so there's a very good outlook for the future.
We see this as an operation that is no longer just a project. It's going to be within the operations. Just to close now, a little bit about the strategic pillars. The sentence on the left, as you can see, we are among the companies that best develop forests in Brazil and in the world as a consequence. It is a key competence that Dexco has in Brazil. Dexco is a sound leading company in panels, but we are also paying attention to forestry products with the aim of leading the market where we operate in Brazil and Colombia. That's the path we are going to follow. On the left, we call it, you know, leading the game, winning the game and building resilience. We depend on this commodity. We have a market that is not very much concentrated.
There are many competitors in the market, so we have to lead the game by building resilience at the best costs. We have good plans. We have the size of our assets, the historical investments in forestry and in self-sufficiency. For a long time, it has been challenged, but today it is an important competitive edge for us to ensure our best costs. We are integrating the chain downstream, upstream. We have been cooperating with the clients. We have been getting information. We have been working vis-à-vis the vendors, working on contracts with a very good level of interaction. We have the appropriate allocation of capital. We build new plants. Building new plants in wrong moments, that could really hurt the results of the company, right? It could really hurt the sector even.
In this case, we make interesting investments with a high return, really differentiated investments, at the same time that we invest in increasing capacity with operational competence, removing the bottlenecks and also instilling new capacities. Over the last years, in terms of capacity, we earned a whole line, the equivalent of a whole line, that would be 10% of the investment. We do the proper allocation of capital. Forest is the future. If we want to have a good future, we should keep on investing in forests. That's a very important topic, and this is about building resilience. Here we have the shifting, the change of the rules of the game. When you play early, you play better.
You are ahead of the competition, anticipating trends, looking into products, checking the consumer's behavior, the market behavior as well, working to be the preferred brand. It's not simple. There are two additional steps of the chain that we have to cross. We are not B2C, but we are able to play an influence on those that make the decision. We offer differentiated products. The brand surveys show that our brand is the most favorite brand, top of mind brand. As I said, we should leverage the essential competencies and diversify. Something that is obvious, we are exporting more, and this is how we diversify. We see a great deal of opportunity in the export markets. The Brazilian panels with the current forest conditions, which is also complex around the world.
We do have a value proposition that will enable us to grow importantly in our exports. Together with the other panel players in Brazil as well. Daniel, I think, is the next one. I'll pass the floor to Daniel.
Good afternoon. It's a pleasure to be here with you to tell you a little bit about our innovation and corporate ventures strategy. I want to give you some context on what we're saying. Last year, as was said, we approved a project that was very ambitious with BRL 2.5 billion. We adapted it now to the current market situation, and in that context, this investment package included three fronts. All of our investments were organic, inorganic in M&A, and at the time, we mentioned investments in innovation. That's what we're going to discuss today. It involves about 10% of this package, but these investments are focused on, have different focuses than traditional investments.
Here we're allocating a part of our capital on seeking movements that can create a disruption to one of these three journeys, which are the journeys that our consumers are now taking. You have all either gone through or are going through one of these journeys. Civil construction, refurbishment and decoration, repairs and maintenance. These are journeys that offer incredible opportunities to disrupt business models and how we service these consumers. They are very relevant markets too. When you add up the entire market with the materials and services used in this journey, we will have more than BRL 200 billion. This is our battlefield. This is where we're seeking opportunities. Our strategy was to come closer to the entrepreneur ecosystem.
We have on our radar over 800 Construtechs and Inovtechs, which are making a huge difference in this market, growing at two to three digits a year, and some of them growing sustainably at two digits a month and generating cash. Now that we know where our battlefield is and where we're seeking opportunities, I want to share a little bit about our thesis to seek investments in these models. These areas that we are interested in, not only are they long-term financial investments, we don't expect any returns from these investments short-term, but we expect to have strategical returns in the short-term. How can we leverage our business by going closer to these businesses, especially in Dexco's core business?
The first line of our corporate venture thesis is that we believe civil construction, as it works today, will not stay the same. When we look at work sites, construction sites, and the amount of waste that the construction methods are generating, and when we look at the carbon emissions, we have to remember our sustainability commitments, which Luiz will discuss soon. Construction has very relevant carbon footprints. Raul mentioned the biggest strategic advantage that we have, which is how our forestry park is competitive. Not only do we remove carbon from the atmosphere, but we also have one of the most competitive parks in the world. For it to be revolutionized, we need to industrialize construction. How do you replace construction sites with assembly lines?
That means having to use materials that are industrial in modular construction. We're looking at two things at the same time here. Innovative use of wood need two investments. Two areas, and we have Raul and José Ricardo on the boards of these companies, so they're looking at how they are evolving, and we have executives from Dexco developing strategic projects with them and accelerating them. Let's talk about Urbem. Urbem has just launched its first industrial plant to produce CLT in Lages, which is engineered wood, and it will allow us to build apartment buildings with over 10 floors, 100% made out of wood, with better properties than the current methods that we use. In Canada, they have 30-story buildings made 100% out of wood. This plant has the biggest installed capacity in the Southern Hemisphere.
Even if the Brazilian market is not developed enough to take their production, Europe is one of the biggest consumers, and our forestry assets are so competitive that these products can be exported until this, these materials are used here. Investments in Noah include a very relevant point. Noah is one of the bets that we're making to try to create a culture for using engineered wood in construction methods. They are a building developer. They had a recent launch. If you like the neighborhood of Vila Madalena in São Paulo, we're going to build six houses there with CLT. If you'd like to hear more, maybe we can sell you a house. We have six units that are still up for sale. Oh, excuse me, I just heard that we only have two left, so you better be quick.
It's a wonderful project, and I can give you some more details later on, because they will be examples for the next projects that will be used in this technology. The perfect combination is how to make it modular. We're talking about a raw material supplier, a company that wants to create a concept to use this material, but we needed to conclude the transformation process, to have a company that would be able to have combined use in industrialized materials, wood and steel, which are the best friends of modularization, through an efficient building process. Brasil ao Cubo is a company that can create a 10-story building in 100 days. It's like those videos you see in Instagram that they do in China. They are building like that in Brazil already.
These are high-standard buildings which can be built in 90 days from when the project is signed to when the house is delivered. This is what we're seeking. If you'd like to hear more, we can give you the website for these companies, but it really is amazing. It's very exciting to see what they do and how it links to our business. Here I was talking about construction, but another very relevant journey for us is refurbishment and decoration. Whenever you sell a new piece of real estate, the first thing that happens is that it's refurbished. That can be very traumatic. It often involves professionals, fights between married couples. You know, there are many startups trying to make a difference here.
When you look at the strategic pillars that we showed, our bet is that we want to be closer to our clients. Many of our clients, I'd say 80% of them, are using them for refurbishments. How do we change it? How do we create a good capability for that? I think that's the first step, because you cannot change the consumer's experience without hearing them. We need them along with us in this journey, and they play an essential role because they're the ones who talk to the architects, to the consumers. Our role is thinking about how we can bring in more tools to help our clients to be better, to be more omni-channel, to have more excellence in logistics and maybe having a physical environment. You know, we are still using brick-and-mortar stores.
People don't buy tiles online. They want to see the product. They want to feel it. They want to have recommendations from a trusted architect. When you look at ABC da Construção, which was one of our biggest bets in acquiring these capabilities, we realized that this is something that we can learn and share with our clients, the digital experience that they can provide, creating brick-and-mortar stores into showrooms that will give the clients and the architects and even entrepreneurs a different experience. They really have excellent logistics. These were our bets. These were the investments we made, as I said, 10% of the allocated budget for disruptions. We are very pleased about how these companies are moving forward and the projects that we are running together with these scale-ups.
I'll pass it over to Glizia now, who will continue, talking about our ESG agenda.
New times require a revision of our culture. This is how we begin the second season of our way of being, our way of doing. Last year, we engaged all of the employees. We promoted many discussions with the board, with the executive committee, and we repositioned the behaviors of our way of being, our way of doing. There are six behaviors that truly talk about people. They talk about processes. I mean, being customer-centric, consumer-centric, and also differentiated results. We do that because we believe that the culture should be at the service of the strategy. When we repositioned, we also needed to leverage with new behaviors, new attitudes. We have been working strongly on ESG. We have repositioned our sustainability strategy. Now it encompasses three environments, the consumer, the company, and the society.
We work on the three pillars, wellbeing, impact, and caring. For each of the intersections, we have a clear action path. This culminates in some commitments and targets that we have taken on publicly. Last year, when we introduced Dexco to all of you, we took on three strategic commitments that is facilitating our journey for construction and refurbishing. Daniel gave the examples on the new competencies, the new partnerships that we have engaged into. We need to ensure sustainable growth with a positive carbon balance. Today we have this strength that is the wood sector, but there are many opportunities, many projects in terms of ceramic tiles in replacing our energy matrix, and we have been investing in that. Also promoting health and wellbeing in all of the environments.
With that, we defined three public commitments with target. First, investing BRL 140 million in initiatives that will promote the conscious reform. Our carbon balance should be positive by 2030 with all of the new projects and unfoldings, and 35% of women in leadership positions. These are the targets that we have set today. There's an online system to track what happens in the company. The executive committee, we have an ESG commission. We have there all professionals and representatives of the business areas, plus the sustainability committee that tracks the targets. The ESG targets, they are part of our individual targets, so this will impact our variable pay as the C-suite.
There are many affirmative actions, a structured action plan that has been devised for us to reach our objectives so that we can instill this new culture. This is how we can contribute and support this new moment of the company, following up the evolution process that began with the first revision of culture that was done in 2015. Very well. Now closing the presentation, and then we'll have the Q&A. It's natural there are questions about the scenario, what are the perspectives, the short-term outlook. Okay, it's working. Can you hear me well? We can do the bathroom fixtures very well. I don't know about the mics. Anyhow. As I said before, traditionally, the third Q is very positive.
This year, as you might know well, we've had many external events that are shaking our economy, you know, shaking our country. We are in the final lap for the presidential race. The election environment stopped the country in the last five months. This generates a great deal of uncertainty in our clients. While the retailers, for example, they work with stocks, they've all cut down their stocks. They've all prepared for a more difficult moment, and it's natural. There was, you know, a certain settling after the pandemic. People are now spending with other things, traveling, for example. Our business, overall speaking, just like any other big company, our businesses were affected, albeit indirectly.
Brazil has muddled through the crisis much better as compared to the situation in Europe. There it's tough. It's been two years. Then the war in Ukraine and things only got worse. Maritime freight pricing, for example, skyrocketed. The levels are not acceptable these days. While the exports, they had been doing well, but now we see other trends. We see many companies suffering from that. I recently came back from Europe. We saw companies that have had their gas bills increasing tenfold, electricity bills likewise. So they're stopping their assembly lines simply because costs are too high. They cannot cover their costs. So the revenues will not cover their costs. So we see the volatility of the electoral scenario. This will accommodate eventually whatever the results are. We see the economic scenario.
As curious as it may seem, we have two options, but the scenarios are not that different. We should have a more reassuring moment right after the elections, no matter what the new administration is. There'll be new transitions and new plans in place. We are going to leave two things behind, two things that really affected us this year. The inflationary profile, quite strong inflation. Now, in the last few months, we've had an important reduction in the inflation rate. I'm talking about the inflation on our inputs. In the final quarter of the year, the inflation scenario is under control, although prices have risen. We can also see the contraction of the interest rate.
We believe that in the first half of next year, we'll see the interest rate stabilizing, and I believe there'll be, you know, a cycle with good results. This year we'll have a GDP that is higher than the forecast. Expectations for next year are slightly better than what had been foreseen. This effect of the interest rate is quite relevant in our business. We have, you know, businesses that demand credit, and if we have lower interest rates, it's better for us. There is this important point. Well, sometimes people compare a difficult year with the crisis that we faced in 2019, 2018, 2019, especially in the construction sector. There is no comparison basis. At that point in time, we stopped the construction sites. We would stop selling.
Now we are keeping up the pace of launches. We've had quite strong launches last year. We still have some launches this year. The segment in which we operate, which is the high-end segment. I'm in the middle income brackets, the high income brackets, the construction sites that are more sophisticated, so this is still a very strong market. Well, there is something that is quite relevant. He was talking to you showing the quite conservative figures. I was speaking to Haddad. These are conservative numbers because they're averages. If you follow up the forest-based companies of any nature in Brazil, you may list them as top ten in your agenda for the next seven years. Because there is an imbalance in the wood supply vis-à-vis the needs for wood.
As a consequence, there'll be high prices of wood because there's very little wood available, independent wood available. This will directly affect. It is already directly affecting in the next four years or fiv years, the market because there's no solution for this market in less than six years or seven years. There are no forests available. If I decide to go to the market and I decide to hire a fund. Of course, there's money to invest in a forest. Let's raise $1 billion. Let's plant 1 million hectares of forest in Brazil. This will only yield results in six years or seven years. There is no short-term solution for this issue. In the next six years or seven years, the wood prices will be high or very high.
You may track that in our balance sheet because just in the last quarter, we've had adjustments that were close to BRL 200 million. We should have new adjustments in the forthcoming quarters because the wood price has been rising exponentially. Our assets should be valued according to the accounting rules. Okay. Our competitors, they highly depend on wood, and they do not have such availability of wood. Our wood products competitors, they depend on that. They are being, you know, affected, deeply affected. They're reducing their capacity, they're making adjustments, and this is very important to pay attention to. Now we hold more than 90% of our own forests, so we may supply 100% of our needs.
We meet 100% of our needs, so we are able to operate with an important competitive edge when compared to the market. That's a whole different scenario. What happened with the wood market in the past? If you have been tracking Dexco for so many years, every time when we had a reduction in demand, the prices would go down, would plummet. It was tragedy. We had a reduction in demand, but the prices remained stable. There was no price reduction, and we'll definitely have price expansion in the future. The costs are pressured, especially for the competitors that we have in our chain. The base number. Wood, early in 2020, it cost between BRL 40-BRL 50 per cubic meter. Now it costs BRL 200 per cubic meter. It's skyrocketed and there's no way back.
You know, sawdust products, well, that's included as well. Cost readjustment and the availability of international logistics, we are working on that. We see the freight costs going down. Container and freight costs to Europe, these prices are going down. They are not close to the previous levels, but they are now, you know, at price levels that represent an opportunity to us. We should resume exporting. We've had strong exports over the year. I don't think we've had a year before with such a high volume. It helps to regulate prices in the domestic market, but we still have room for growth in exports. Therefore, we are quite confident. We are working on all of the required processes. You saw my team presenting to you that we have been working in all of the fronts.
We believe that the fourth quarter will be slightly better. We are not going to have that boom, that spike as we had in the pandemic. There's no reason for that. There are no significant variables according to our forecast that demonstrate that we would have, you know, a worse scenario. Everything indicates that we are going to have a sustainable and slow resumption, reaching good levels in the forthcoming quarters. We are quite confident on the path that we have chosen. Yesterday, we've had the board meeting, and next week we are going to have an off-site meeting. As we do every year, we'll be discussing the strategy for the next five years. We think long-term, as most of the shareholder base. These are shareholders that truly focus on the long-term.
We are confident, and we hope to continue to deliver consistent results. We are in Brazil, and I was just the other day, I was talking to this group of analysts from this large fund, one of the largest in the world. They came to visit us. Then I told them, "Brazil has ups and downs. It's normal here." We have to work based on that. The company is quite resilient. We are quite confident. We are at a whole different level now. We do not have yet pricing for the pulp business because the market is truly volatile. The prices for pulp are very good, with a very good dollar exchange rate as well. This hasn't been priced in our reports, and we have the advantage.
This can come as well, but these are investments that are done coherently. It's not just betting. We are not playing with our businesses. Okay, thank you very much. Now I pass it back to Natasha.
Well, everyone, before we begin our questions and answer session, I'd like to ask Mr. Francisco from Abimec who is going to hand the award. Well, on behalf of the Abimec Brazilian Association, we're very happy and very honored to give you this award for 36 years of presentations. This is an acknowledgment of our gratitude. Thank you. 36 years, that's how long I've worked for the company. Thank you. We'll now continue with the questions and answer session. We have a question here. One moment, please. Thank you for that presentation, everyone. I have two questions, and they are both related to the wood division. I'd like to understand from you, with the higher price of wood that we've seen recently, do you expect it will continue to be high for the next four years or five years?
What is the cost of your competitors versus your cost to produce wood panels? So that's my first question. I'd also like to ask about exports. You said that there might still be some growth. You mentioned that Brazilian wood panels has some differences that might make exports grow. So I'd just like to understand, what makes your product stand out? Why do you believe in this growth? For what percentage would that make sense? At what margins do you believe would be reasonable for that to continue in the future? Thank you. All right, I'll start answering, and you can answer the part about exports afterwards. We have data that we publish and data that we work on, which are very strategic. I have an answer to your question, but I'm not going to answer you directly, okay?
Yesterday, I saw data, showing a comparison between us and our competitors, and we have a significant competitive advantage now, especially driven by the Wood Division. We are currently the company that has the lowest cost when you compare total industrial cost. We are one of the companies that has the biggest advantages, and it tends to go up in the future. Because when you look at a company that buys wood from the market, as most of our competitors do, many of them have contracts, that are three or four years long that are still being honored, so they're still buying at a lower price. As these contracts get renewed, you see that everything goes up. Our competitors at the current cost with the relevant prices that they use will take a hit in the future.
It's not a commodity like oil or anything of the sort that you have an availability in the world and you have fluctuations. No. The problem is that wood cannot be transported. You cannot bring your wood from the northeast part of Brazil. You don't have any plants there, so it will tend to get worse, and the competitiveness between our competitors and us will tend to expand. Raul is very close to export, so he'll tell you a little bit about that. Well, we've been talking a lot about exports. I think that's something I mentioned during my speech. We're absolutely sure that wood panels from Brazil will take on some more importance in the international market.
We don't have any metrics on volume, but we are trying to seek more profitability, and we're looking for places in which we have the logistical conditions to service that demand. In order to get space, we need to be consistent. We need to be there for a long time. It's difficult to turn exports on and off. That doesn't work long term. What I can tell you is that with the freight prices that we've seen, $8,000 a container - Europe, $10,000 to the US, it's very difficult to have high profitability levels, but we still had positive results from these exports. We see 4,000 shipping prices to Europe, and it's going down. Since we never stopped exporting to Europe, we're starting to also see, especially because of the international scenario, a lot of interest on wood panels.
On October 14, they had a conference of wood producers in Europe, and they said that the costs to produce wood panels in Europe doubled in less than a year. There are less than four plants that we know of. Well, we know of at least four plants that stopped running because of energy prices. We will continue running continuously, seeking that sort of thing. With the right shipping levels, of course, we don't believe it will go back to $2,000, but we believe that we will have comparable exports to the domestic market. An important point here is to say that in wood, and we've never hidden this fact, in wood exports, especially MDF and MDP, has never been at historically high levels. Our results have always been better domestically than internationally.
Last year, it started to break even. We started to see the same profitability levels despite all the issues with shipping prices, and we will probably have considerable levels in the future. The best possibility is to have the same possibility of returns. We don't think that, you know, exporting wood panels is such a great market. It's not a business that travels well. It is heavy, and it's very difficult to add value. It can be an excellent hedge for the domestic market since we have more installed capacity in the domestic market than a demand in the market. That's what we believe will happen.
Let me go to the next question. Thank you. Isabella Vasconcelos from Bradesco BBI. I have two questions. Well, first, about the initiatives in-house and Haddad was mentioning this. You're working on improving what you can control. Can you tell me about the key initiatives that you are conducting within the company? The second question, it's about the long term. A question to Danilo, perhaps, thinking about innovation and the end game that you aim at with your initiatives and the CLT market. These markets are quite synergistic with your wood activity. Do you think about expanding production? Can you talk about this as well? Thank you. About the first point, you were talking about the internal initiatives. We have two different focuses. We really work on productivity.
We are now working in two different fronts in terms of productivity. First, automation. One of the largest projects in the company, we have been investing BRL 300 million in this project. That is in automation systems for the sanitary ceramics, sanitary ware, ceramic tiles, because today we have manual operations. We are even automating things. When you compare with the cost level, it's, we are at the break-even point, but we believe in increasing quality. We want to gain production scale. We want to have more stability in our production lines with the automation. It is at the break-even point, but we do automate. Even if we lag behind a little bit in the beginning, but we believe that it's increasingly you know harder to find skilled labor. Well, the other point is throughput.
We are redesigning the assembly lines, we are redesigning the machines in the manufacturing plants. We aim at the highest possible level of OEE, the highest possible level of throughput in continuous lines such as the wood panels and ceramic tiles. We have these two focuses. We've had significant gains in productivity. We have been reducing our labor level. We have reduced our employees, the number of employees, so we have been gaining productivity because of that. In Brazil, we do have labor, but the turnover is high. Quite often, the labor is not as skilled as we need, so that's why it's important to tackle productivity. I believe that looking into the next four to five years, we may have consistent yearly gains. For example, we are going to earn on margin by improving productivity.
We have continuous planning in this direction. I believe these are the two targets. Haddad has been leading this quite interesting work. It engages, you know, digital. We created the shared service center, and we are trying to simplify the administrative processes to be a more streamlined, a more dynamic company. We are a transnational just like any big company. We have lots of red tape, pardon. We have squads under Daniel's lead, under Haddad's lead, and they have been working on this process to eliminate the red tape. This is important. We have been working as well so that our SG&A expenses remain at the appropriate levels. We want to tackle the inflation problem as compared to the revenue. Daniel, would you like to answer her questions?
Can you hear me? Can you hear me now? Well, the major advantage of having, you know, a fund for experimentation to do, you know, venture projects. You have a controlled pilot before making a decision for a more ambitious end game. Well, there is something that is a fact. We invested believing in a greater end game, something that is quite integrated with our forests. Today, when we assess the condition of these products, well, they are made with this genetic material which is not ours. We are talking about pine forests. The global technical standards, they foresee, you know, woods that are similar to pine. The key point of the investment, how do we go about learning, developing projects that will support my integration, promoting competitiveness before we make a decision to move more aggressively?
One of the projects that we have inaugurated, and I'm sure it's going to be successful, and of course, it's going to yield results seven years from now. Because if we talk about a forest renewal, we are talking about a seven-year term that is doing CLT from eucalyptus. We are quite successful in producing that. We really master the production of clones, you know, forestry genetics, for example. This really helps us to choose the best clones for this application. After doing that, we not only become globally competitive, which is linked to this Brazilian forestry production, but we'll be the first producer with this CLT made of eucalyptus. We are investing further in this product that has incredible margins.
Combined with the shift in culture that is using this material for construction sites, will have great impact. Also the carbon reduction, as Glízia said. You mitigate the carbon footprint in the construction sector because you bring the forest and you stock into a building because the service life of a building is considerably larger than that of a furniture, for example. The carbon credit legislation, if it further develops, we can even invest further in this sector, in this arena. Well, something that you said, and then she was asking about this as well. Well, all in all, are we going to internalize that? There's no issue. Well, Itaúsa companies, we really grow by making acquisitions and mergers. The DX Ventures, for example, there are many projects there. By design, we have paths to promote control.
In some other projects, not that much, but we have reliable partners, so we can grow through the partners as well. If the operations expand, we are going to enjoy the results as shareholders of the partners. That's how we go about doing this. There's much about learning as well. Brasil ao Cubo, well, it's doing wonderful constructions in six months. It's really outstanding. There is this Deca line that is fully oriented to this kind of construction. I may have another line of tiles dedicated to this kind of construction. Instead of selling a wood panel, I can sell, you know, another value panel for this kind of construction. There's much future synergy to happen. You know about internalizing, about purchasing and merging.
Of course, we've invested in these companies, so it could be an option down the road to internalize, to purchase them. We'd like to have good creative partners. At the current stage of the investment, they should stay outside. If they come inside, it's not good for them because the routine of the large companies, they're not so streamlined, and it can hinder, you know, the investments.
Good afternoon, everyone. My name is Caio Greiner from BTG Pactual, and I have two questions to ask. The first one is short-term, and the second one is a little bit more strategic. Considering the change in volumes that we saw in the third quarter, especially in Deca and in the ceramic tiles industry, I think that was very striking when you look at the universe of high-end companies in the stock exchange. In some of them, I'm not sure if we saw such an expressive reduction in volumes as we saw here. Marcelo explained it very well, that point about retail being out of stock. If I understood it well, this would've been a little bit more of a one-off situation in the third quarter, and we would start seeing improvements in the fourth quarter.
I'd like to hear your outlook on the short, medium, and long term. On the fourth quarter, what do you expect from this volume rebound? In 2023, what can you tell us about that, your perspectives for then? We know that we are at uncertain times, but we'd just like to hear from you what you've heard from your clients, from retailers, what do they expect, and what do they use to justify this moment? Is it because of the elections? We've heard some noise, and maybe noise is not the right word, but people are scared that this might be pulled-forward demand from the COVID pandemic. You mentioned that share of wallet was more directed towards investments in the home, and maybe that is being reversed. Now people are spending more outside of their houses.
We'd just like to hear from you on this, outlook for consumption and demand for your products for the next quarters and what you expect from 2023. My second question, on ventures for Daniel de Oliveira. In the past, you talked about using this division to support the company as a learning experience that you might have and things that you can implement in the company itself. I'd like to explore a little bit, the case for these situations. Maybe these companies can get very good and become their own division. I'm not sure if you expect that to happen. Do you expect it to reach a certain percentage of your revenue in a number of years? Or will it represent a part of your EBITDA? Will it become its own division?
I know that they are fully formed companies, but would they become divisions of Dexco? That's a good question. Both questions were very good, and I'll try to answer directly. First, about the moment, about the outlook. It's difficult to say, Caio, it's difficult to know what are the biggest factors, what are the main drivers for each client. The fact is that clients became more careful in the last two quarters. They reduced their inventories, and that's a trend. Now, when Iso explained that when you work with 120 days of lead time in your inventory, and when you drop it down to 90 or something of the sort, it's a significant impact. It means that, you know, for a company like ours, we would cut out one month out of the entire year. That's what happens, and that creates larger consequences.
I personally see this movement of reducing inventories as something that is healthy. On the medium term, I see it as healthy. It affects us now, but I see it as a healthy thing. Meaning our clients had inventories that were too big, and that can lead to another issue. It either goes old, it doesn't sell well anymore. You might have trouble servicing your clients. I think this movement is here to stay, having lower inventories. Another point is that, of course, this drop cannot be explained only by reduced inventories. Sellout was down, and that's why I believe this sellout is associated to the current situation.
I'm not sure to what extent, if it's 50%, but you know, some people have started constructions, you know, price of buildings has gone up. We see that prices for new apartment buildings are sky high, so that might need to come down, but it has not stopped. We see many condominiums in São Paulo. These are major industries that didn't have much significance in our policy. For example, the Brazilian Midwest, this is one of the wealthiest regions in Brazil, with large cities and even medium-sized cities, with major projects, with luxury shopping malls, with big condominiums. We have a lot of space there. As I said, what we will see is that we believe that in the fourth quarter, we'll have better volumes.
Not to the extent we saw before, but it will start to recover. We're also making several initiatives with a specific effort with construction companies, home centers, and it takes some time. Once again, we're talking about 2023. This is a strong discussion. I don't think that it will be substantially better than 2022, but it will be better. I think it is unlikely, and we don't have any expectation of it being worse than 2022 due to the factors I mentioned. Across all of the scenarios we look at, we see no relevant risks of having a worse situation in 2023. Can it happen? Anything can happen. No one knows what's going to happen to the war. I went to Europe and I asked to each CEO what's going to happen there.
I mean, it could run like Afghanistan for years and years. This can be very complicated. Europe now are buying from us again. We started receiving many calls to sell wood panels, and it will need to happen because we have major companies in Europe that have stopped, and it will be very difficult to recover to the previous level. We believe that we'll have a more careful 2023. We're looking at our CapEx. We're cutting costs. We're getting ready, but we're not expecting the worst. Is there a possibility of having a major upside? Well, we also don't see it as very likely. The most likely thing is to see slight gradual growth that will be consistent, but you never know. It's the first year of the government. We need to see what's going to happen.
We're going to have a better perspective of that at the end of the year. We'll see what happens in Brazil, but anything can happen. Anything can happen, and we'll just have to wait and see. About your second question, I could answer it as yes and yes. The fact is, why did we create DX Ventures? We created it for a number of reasons. We wanted to train our staff, involve young talents. We wanted to understand how clients, for example, ABC da Construção, they're revolutionizing the market. It's a major project. It's very big. So they have major projects, and it can become much bigger than it is right now. So we had a participation design, and we have opportunities. It's a company controlled by private equity and so on. So we have this sort of opportunity.
The question is, we want to expand this, these operations. We believe that there are major possibilities that some of them, at least two of them, can become a unicorn, as everyone said. That can happen, and that can create value for the company directly or indirectly. In this entire world of DX Ventures, we might get a fifth business for Dexco. Why not? We also see that as a possibility. We're investing on retail, we're investing in that line of business, and you'll hear consistent efforts towards that. Any other questions? Good afternoon. I've been seeing the previous reports from the company, and I'd like to ask about the exclusion of ICMS from the calculation base. The company started doing that in 2015, but they did not give any values. Are there any calculations for that from the company?
We've been looking at that closely, naturally. Referring to the past last year, the biggest part of the share was recognized. We will probably receive 80% of what we had discussed, but we see that these credits can be monetized very quickly. We have a structure that allows us to use credit. That might be the only way in which we can get a benefit at the end of the day for the company's results. About the outstanding amount, we're once again being conservative. This is the model that we use. We don't want to give anyone news and then go back on it. It's been very positive so far. Until the middle of next year, we expect to have some advances in concluding this process.
In terms of essence and concept, there's no reason why we believe that it won't run smoothly. We need to go through all the stages, and they are a little bit slower than what we've had so far. Yes, but since the lawsuit is over, we believe that it will simply be about following the process. All the documents have been raised, so it's just a matter of time for it to finish. My name is Fábio Nerio. I'm from Pison Investimentos, and I'd just like to raise a question here. I was looking at some figures from the company, and there are very few companies in Brazil, at least that are publicly traded, that can generate BRL 3 billion a year. That's the figure I have for 2022.
Another important thing is that you can pay 20% of that to shareholders. The average is 20% in Brazil, and so you're above average. With that being considered, what explains the fact that Duratex shares are undervalued at the market? Thank you for asking that question. We have the same question in mind. Is it competition from interest rates? No. We believe that it is a bargain. I would recommend buying it. There are two things here. First, at this moment, most assets in Brazil are low price. There are many companies in a similar situation. Seeing that the company is trading at 5x, 6x , that is very low. We think that there are many factors here. For example, we did not price the effects that the pulp business can generate.
That's a business that we need to keep an eye on, and of course, it's still ramping up. We have a free float structure that contributes towards it. 70% of our free float has been purchased by foreign funds that have a long-term vision. When you look at the real free float in the market, it is lower. I think most of it can be explained by the long-term investors, but I do think it's a little bit more structural. It reflects the risk of doing business in Brazil, and we're a company that is mostly in Brazil, so of course, we would be penalized for it. We really do believe that the share has the potential to go up, and it can go up sharply, significantly in a short horizon.
I think that as this market situation improves in Brazil, everything will help us. Of course, if interest rates go down, results start becoming more consistent and better, so it helps. But there are some outside components outside of the company's results, which have affected us significantly. Volatility and structurally, we have a concentration of shares which reduces the real free float. Well, everyone, thank you very much once again for being here. This concludes our event, and we'd like to invite you to our coffee break. Thank you. We apologize for the problems along the way. Thank you.