Good morning. We welcome you to the Altri Third Quarter 2025 Results Conference Call. During the presentation, all participants will be on a listen-only mode. There will be an opportunity to ask questions after the presentation. If you wish to ask a question during the Q&A session, you may do so by pressing the star key followed by five on your telephone keypad. If you're experiencing any difficulty in hearing the conference at any time, please make sure you have the headset fully plugged in, or alternatively, please try calling from a different device. I'll now hand the conference over to Mr. Rui Cesario, Head of IR of the Altri Group. Please go ahead, sir.
Good morning. Thank you for joining Altri's Third Quarter 2025 Results Conference Call. We will review our financial performance, market conditions, operational highlights, and opt-in, followed by Q&A at the end. We have with us the CEO of Altri, Mr. José Pina, and Mr. Miguel Silva, the Group's CFO, to address these topics. I will hand over to Mr. José Pina.
Thank you, Rui. Good morning, and thank you for attending Altri's conference call. As always, we're pleased to host this call with investors and analysts to share Altri's results and our views about the market environment and challenges. To turn to slide number two, we start with the main highlights of the third quarter of 2025. In the pulp market, global hardwood pulp demand picked up in recent months. However, China's additional capacity and increased access to domestic raw materials have limited recovery in prices. Demand for dissolving pulp and the Asian tech pulp chain has stabilized in the third quarter after a more challenging first half of the year as a result of U.S. tariffs announcement and lower activity in the sector from some Asian countries. EBITDA reached EUR 11.6 million, a 79% decrease year on year, with a margin of 7.1%.
This is mainly the result of lower pulp prices, which have amplified by the devaluation of the U.S. dollar. Nonetheless, and despite the difficult environment, our cash cost continues to decline compared to previous periods. On diversification and growth at Biotek, the migration of BHKP production to dissolving pulp remains on track for completion by the end of 2026. The acetic acid and furfural project at Caima is progressing, and we've completed in the third quarter of 2025 the acquisition of a majority stake in AeoniQ, a Swedish company focused on sustainable textile fibers. Moving to slide number three and looking at market highlights, we have seen some acceleration in global pulp demand over the summer months. Many industry players became more aware of the tariffs' effect and the impact in their financials. China and Asia are the main drivers, while Europe and North America have slowed after a strong 2024.
Hardwood pulp demand grew by 8.8% year on year, with China showing a 13.4% increase and the rest of Asia and Africa up 18.1%. Fiber-to-fiber substitution continues more obviously every year. The challenges faced by softwood producers are even higher than hardwoods, with main clients adapting their products to higher hardwood use, anticipating challenges, or in this case, continuing challenges on softwood. In slide number four, dissolving pulp demand was affected by U.S. tariffs impacting the Asian textile value chain, but we have been seeing recovery in the past months. Overall, global dissolving pulp demand declined slightly by 1% to August, which compares with - 4% by June of this year and - 8% in the first quarter as well of this year.
Turning to slide number five, inventories at European ports have been stable since the second half of 2024, in line with a historic average of 1.4 million-1.5 million, with a slightly lower trend. In slide number six, we comment on the evolution of the U.S. dollar versus the euro during 2025, which has amplified an already material decrease in pulp prices. Average BHKP pulp prices in Europe fell by 25% in U.S. dollars and 30% in euros compared to the Q3 of 2024. When comparing with the previous quarter, we also saw a reduction in prices by 12% in U.S. dollars or the equivalent of -15% in euros. The PIX price index ending September was at EUR 1,000 per tonne and currently stands at $1,080 per tonne.
In slide number seven, we see dissolving pulp prices down by 15% in the third quarter of 2025 versus last year's Q3. Despite a historically stable and lower volatile trend versus BHKP, dissolving pulp prices have been affected by the U.S. tariffs announcements, with material consequences for the global textile value chain. Nonetheless, prices have stabilized during the third quarter of 2025, and we have started to see a peak of in-demand from end clients. In slide number eight, we show an evolution of volumes broadly in line, which is slightly negative, in the first nine months of 2025, given the challenging demand environment, especially in Europe. Moving on to slide number nine, volumes sold per region are focused in Europe with an increasing trend from the Middle East, namely Turkey and Asia. On end uses, volumes sold continue to be led by tissue, with textile via VP increasing its weight.
I would now pass to Miguel Silva, Altri CFO, who will comment on the main financial highlights of the quarter.
Thank you, José.
In slide number ten, lower pulp prices and the weaker U.S. dollar put pressure on revenues and profitability throughout 2025. Total revenues for the quarter were EUR 165 million, down 20% year on year, and EBITDA was around EUR 12 million, down 79%. When comparing to second quarter of 2025, although revenues have decreased by a small amount, this was achieved with 9% higher volumes, which were more than offset by lower prices and the weaker U.S. dollar, leading to lower margins in the quarter. Going to slide 11, on an accumulated basis, revenues and EBITDA have registered a decrease in the nine months as the pulp market environment was less favorable than last year. Going to slide number 11, we can see that EBITDA margin continues under pressure, standing at 7.1% for the quarter and 12.9% for the first nine months. We expect margins to recover in a more normalized environment.
In slide 13, EBIT and net profits have continued their downward trend in the third quarter, mainly due to the already mentioned challenging pricing environment and currency effect. We move directly to slide 15, and regarding costs, in spite of the challenging market environment, we have been able to reduce the cash cost of the quarter by 3% quarter on quarter and -8% year on year, putting the nine months 2025 number down by 2% when compared with the nine months of 2024. We continue to focus our efforts in optimizing costs with the goal to achieve a cash cost reduction for the full year of 2025. On the wood side, prices have been fairly stable during 2025 when compared with 2024, but with a better mix. During 2025, we are having less imports of wood from outside Iberia, the more cost resource.
On the energy front, the situation has normalized since the reactivation of the cogeneration turbine at Celbi in late March 2025, improving production and efficiency levels. Chemical costs are mostly trending down and are in line with last year. On slide 16, we can see net debt increase during the quarter, mainly due to additional CapEx and corporate tax-advanced payments, which are based on last year's profitability and will be adjusted after final numbers are calculated. I will now pass back to José.
Thank you, Miguel. To turn to slide number 17, despite the challenging environment, Altri maintains a high single-digit return on capital employed at 8% for the first nine months of 2025. Turning to slide number 18, we have some ESG and sustainability highlights during the quarter. Altri earned the EcoVadis Platinum Medal for the third consecutive year, ranking in the top 1% of companies globally in our sector. The group was ranked third worldwide in our industry among the 500 most sustainable companies, according to TIME and Statista. We celebrated the Sustainability Day, holding an event that gathered several business partners and suppliers to talk about reducing impact and creating innovative solutions towards net zero. Altri also held a second health and safety convention, reinforcing our commitment to prevention and safe behaviors.
Turning to slide number 19, and in order of expected completion of new projects, we started by sharing the main numbers, main figures of the acetic acid and furfural production unit at Caima that should start operation in the first half of 2026. We already shared these numbers in previous quarters, but wanted to underline that the commercial development is already underway. In slide number 20 at Biotek, the conversion from BHKP to dissolving pulp is on track for completion by the end of 2026. Some of the highlights include the price premium for DP over BHKP averaged 41% between 2019 and 2024. Production capacity will exceed 180,000 tonnes once the full conversion is complete, with potential to reach longer-term 200,000 tonnes. Main targets for this project are obviously Asia, with a focus on textiles and specialties.
In slide number 21, we share some numbers of the project to be developed by the recently acquired AeoniQ. Capacity will be 1,700 tonnes per year, with revenues of EUR 20 million-EUR 25 million expected from 2028. The project targets global markets and a range of end users, including apparel, pulp textiles, and food clearance. CapEx for the industrial unit at Caima is EUR 60 million net with subsidies. In slide number 22, we repeat some highlights on the Caima project, and we're happy to discuss an update of the situation in the Q&A session. Finally, in slide number 23, we share some of our conclusions and perspectives. In the pulp market, global demand recovery was disrupted early in 2025 by U.S. tariffs and economic uncertainty, but demand now seems to be recovering, led by Asia and China.
We see early signs of price improvements and remain moderately optimistic for the coming quarters. Operationally, we continue to focus on cost optimization with another favorable evolution in variable costs during Q3. We expect a second consecutive year of cash cost reduction. On strategic diversification, Biotek's migration to dissolving pulp is on track. Caima's acetic acid and furfural project will enable new high-value products, and AeoniQ's project is advancing to sustainable textile fiber development. As a conclusion, in 2025 being a challenging year for the sector, given the economic doubts caused by tariffs announcements and the evolution of the U.S. dollar, we expect to see a normalization of the situation in the coming quarters, with 2026 less volatile, with a more balanced supply demand, making it possible to have progressively higher returns. Thank you for your attention. We look forward to your questions.
Ladies and gentlemen, the Q&A session starts now. As a reminder, if you wish to ask a question, please press star followed by five on your telephone keypad. Our first question comes from Bruno Bessa from Caixa Bank BPI. Please go ahead.
Yes, good morning. Thank you for taking my questions. My first question will be related with the pulp industry balance. We have been reading from several industry sources that apparently the industry needs permanent capacity shutdowns or conversions in order for prices to recover more materially. My question here is, how do you see this being played? Do you expect more conversions of capacity like the one you are doing at Biotek and the one already announced by Bracell, or do you think that there will be effectively capacity shutdowns? If we see capacity shutdowns, where do you think those shutdowns are most likely to happen? This will be the first question, a bit of an overall view on the industry momentum. The second question on the cash cost evolution.
You have a very impressive reduction of cash cost throughout the year, and particularly in Q3, you made a very strong delivery on this front. If you could give a bit more color on the drivers behind this evolution and what should we expect going forward in terms of cash cost for next year, and where is further room for improvements in the short term? This will be the second question. The third question, as you mentioned, an update on the Gama project. Thank you very much.
Thank you, Bruno. Okay, let's start with the first question regarding the pulp industry balance. I think from everything that we've seen, at least, the supply-demand balance has clearly been somewhat long on the supply side. I think most of what has come to market recently is now fully operational. The question becomes if there's not going to be significant capacity additions, at least I think of implications, particularly for the European market, although this relates to global supply-demand balance. In the foreseeable future, I think we're talking primarily, if there is any capacity addition, it will likely be in Asia, although there are some questions around the viability of some of the projects that have been announced.
As you probably are aware, particularly in China, integrated capacity and the multiple projects that have been announced, a lot of those are dependent on domestic wood, which has been under upside pressure. I think just over the summer, we've seen roughly a 30% increase in domestic fiber prices. Effectively, the marginal cost of a lot of these, specifically also the new operators, even with domestic supply of fiber, it will be somewhere in the range of where prices are now. Clearly, the recent price development is justified purely from significant pressure in terms of the financials of those units. What we see actually moving forward is likely going to be some continued potential upside risk in terms of implications that may have on prices.
If I look at current cash cost curves globally for the industry, there's still a number of units which ultimately could be under significant pressure. I'm sure there's going to be a review of a lot of those, and the outcomes would either be some sort of slowdown in terms of output, potential some conversions, although it's not clear into what type or what configuration that could take, or eventual straight shutdowns. I think North America still has some, although not significant, but some capacity and high-cost capacity. Latin America, despite what everyone says, there are several units from some of the major players, or at least the major player, which ultimately are still quite inefficient, and something will ultimately need to happen there.
We've seen the move by Bracell specifically to dedicate a full line to DP, primarily for internal captive users, given that they're expanding their finished fiber capacity. Most of the, or essentially the volume that the additional volume we're supplying would be likely going into their new units. These represent 600,000 tonnes. On the European side, the conversion we're undergoing with Biotek, so Biotek hasn't been, if you think of fuel from a bigger pulp, 250,000-tonne units. That will be, it's already underway with significant swing campaigns, but over 2026 in particular, will be swinging completely by the end of the year into dissolving. That's another significant reduction.
I think the combination of all of this is clearly going to tighten the market through next year, and we believe that there will be a reflection in terms of a set of upside risks concerning the actual price level. In fact, the analysts, when they look at, when they make a forecast for pricing levels for next year, I think you see in the future scope that clearly that will be on the upside. Regarding the question on cash cost outlook, we continue as we have been on a trend towards optimizing our cash costs. I think if you look at it in the context of this year, I think we've said earlier this year that our target was going to be in the low single digits. I think actually we're probably going to be a bit closer, especially looking at Q4, towards middle digits.
For the year, we'll remain pretty much confident of achieving the indication we've given. The main drivers here is clearly a more optimized wood sourcing portfolio. We've seen some reductions in our fiber costs. There's also lower chemical costs and more efficiency from operations. A last but still significant point is we have very stable fixed costs that, again, we continue to optimize. I think all those, all three have combined to ensure that we were delivering lower cash costs, and that's continuing. Regarding your last question on Gama, we're currently under environmental permitting. The next step, or the step currently underway, is on the integrated environmental license, which is responsibility of the regional autonomic administration. We continue to follow that closely. In the meantime, we have been exploring also some of the financial opportunities.
We were happy to register that through one of the applications we've done to the European Innovation Fund, and having surpassed all the thresholds for funding, unfortunately, did not receive an allocation because of the limited funds available for all the projects. It is a highly competitive process. It is a highly demanding assessment process by an external panel of experts of the union, very experienced experts that review a number of projects. In the end, they decide also to assign a STEP stamp or seal to the project, which basically validates its merits and clarifies that the project is fully aligned with the strategic industrial priorities of the European Union, which should, in principle, also support access or give it preference in terms of access to other financial support and incentive instruments. That is basically where that is. I think the next step is clearly this one.
In the meantime, we also have been looking at options regarding the electrical grid connectivity. Over the next few months, hopefully, we'll have some further news on that front. Thank you, Bruno.
Thank you very much.
The next question comes from Luis Colaço from JB Capital. Please go ahead.
Thank you very much for the call. Most of my questions have been answered, but probably a more generic one regarding the London Pulp Week. If you could provide us some feedback on the event and if you left the event feeling more positive or less positive versus when you arrived. Thank you very much.
Thank you. I think overall, I mean, the expectations, I have to say, were not extremely high for the event, given where the industry has been this year. The word that I would use coming out of London Pulp Week was probably a fairly muted conference. When I say muted, it's historically in the past, you obviously do all of the discussions with customers. You go through volumes. You start having some pretty serious discussions around commercial terms for the contracts for next year. I think on the volume front, we're actually, I would say, rather pleased to see not only a confirmation of the key contracts we have, but ultimately also some additional volume requests, which we felt was quite positive. In terms of the commercial, very few commercial discussions actually took place to the level where they have been in the past.
Part of that, I think, is both on the customer side as well as on the supply side. I think there was some caution approaching those discussions, given the current momentum. It certainly requires a bit more interaction, and that will happen over the coming weeks. The other two things that I think were clear, as I mentioned earlier, the view that the supply-demand balance is SKU'd towards a longer supply, and that obviously was part of the reason why some of those discussions have and would likely be dragged apart somewhat. The other clear indication is I think everyone was pretty clear that the industry had reached the bottom over the summer, and we are looking to see some positive development over the coming months and certainly over the coming year. That was the general perception for most. Thank you.
Thank you very much.
Ladies and gentlemen, please be reminded that in order to be able to ask a question, you must press the star key followed by five on your telephone keypad. Our next question comes from Antònio Seladas from AS Independent Research. Please go ahead.
Hi, good morning. Thank you for the presentation, and thank you for taking my questions. I have three. First one is regarding dissolving pulp. I noticed that you sold less pulp, less dissolving pulp, sorry, year to date than last year, so if you can explain the reason. Second one is related with capital spending for 2026, if you can provide some figures. Last one is regarding related with cash flow that has been very weak, actually negative for the last two quarters at least. A net debt- to- EBITDA at levels not seen for a while. Taking into consideration that pulp prices, even that they improve, no one is, I think, expecting a strong rally on pulp prices. It seems that your free cash flow will remain weak. Should there be any level of net debt- to- EBITDA that you would like to surpass?
Thank you very much.
António, may I ask you to clarify the first question?
Sure. Sure. Dissolving pulp, you sold less dissolving pulp this year than last year, I think. If you can explain the reason for it.
In terms of dissolving pulp, just to be clear in terms of overall volumes, there have been, if I think of it for the nine months, we have a number of trials ongoing for Biotek. Most of the volumes that you see there, in essence, is the volumes from China. Overall, I would say this year, for the first half of the year, I think we've made that comment because of all of the tariff implications. Demand was soft, in particular around textile, and that was the primary reason. In terms of Biotek, we now have well over 10 qualification projects underway, some with existing customers, some with new customers. We're also qualifying beyond textile into the farmer market.
I would not overread in terms of those numbers, given the weakness or the softness of demand in the first half, but also the fact that Biotek currently, the campaigns that have been done are primarily focused towards qualification. Regarding capital expense for next year, we are clearly aiming at somewhat of a reduced level of capital investment, primarily focused on completing both the conversion of Biotek and also the acetic acid and furfural, which will be complete by end of first quarter or second quarter. The focus is on those projects. There is still ongoing maintenance CapEx and environmental upgrade related CapEx, but the intensity for next year will be somewhat lower compared to what we have for this year.
Regarding the cash flow, this year, obviously, with the current environment and in particular when it comes to the overall margins for the business that has generated less cash, I mean, it's clearly expected. Given the trend in terms of pulp prices and what we see going into next year, we do expect an improvement in terms of the net debt- to- EBITDA ratio. Maybe I'll ask Miguel if he wants to comment further.
Yes. Just on top of what José said, we will be, of course, focusing on the strategic investments that we are doing and that we have to finalize next year, namely the acetic acid that we'll be producing from 2026 onwards, and also the conversion of Biotek to dissolving pulp, which we think will be finalized at the end of next year. There will be also some one-off events that will benefit 2026. One is the subsidies related to those investments, which the major part will be received during 2026. We will have an important part of subsidies that we expect to receive next year regarding the subsidies. Also, this effect of the corporate tax that we have been doing advance payments this year based on 2024 profitability. As we can see, 2025 profitability is not the same.
We will be receiving some extra amount paid this year. I think this will also contribute for a better cash flow next year.
Okay. Thank you very much for the answers. Thank you.
Thank you, Antonio.
Our next question comes from Manuel Lorente Ortega from Santander. Please go ahead.
Yes. Hello. Good morning. My first question is regarding trends on the dissolving pulp industry. I believe that you mentioned, and correct me if I'm wrong, but you used the word cautious to reframe the feedback from the London Pulp Week as a whole for the industry. However, on dissolving, we have seen higher negative pressures on the recent quarter, at least pricing-wise. What should we expect for next year in terms of prices for the dissolving industry?
Thank you, Manuel. I would say in terms of the key trends on dissolving pulp, the fundamentals remain pretty solid. This year, as I mentioned, the first half of the year, you've seen some softness, a lot of it related to the stocking within the value chain because of the tariffs. There was a significant uncertainty associated with those. I think that's reversed now in the second half. In fact, we see utilization of capacity in the industry for end-use fiber production at higher levels than in the first half. We haven't yet fully seen a restocking process taking place. We expect some time into next year that some of that will happen. Overall, the fundamental trends in terms of dissolving are still there, either on the specialty side, on the fiber-to-fiber substitution, in particular, hardwood replacing more of the softwood.
In terms of fossil-based raw material fibers, undergone some replacement by renewable-source fibers. I think a lot of those will continue to play out. In terms of prices, if you look at the current level, you are still in the range of 40%+ higher than paper pulp, which has been pretty much in line with industry trends. Currently, prices have been well above or around a $300 gap versus paper prices. Ultimately, we will continue to see that happening for next year, perhaps even with some slight ups.
Conceptually speaking, is there any reason why these premium versus standard pulp prices should narrow or widen? I was thinking, for example, in the context of higher fiber-to-fiber substitution trends, it is fair to say that that premium should narrow to some extent?
I wouldn't necessarily see a narrowing in premium. I mean, at the end of the day, you have two very different pulps. If you think of dissolving pulp, it has to undergo significant processes, purification processes. You're extracting a lot of different materials, hemicellulose, some sugars, minerals, etc. That's an extended process. Ultimately, purely on a specific consumption, for you to end up with the same tonne of dissolving pulp, you have to use more wood. The basis for a delta in terms of pricing is always going to be there. I think historically, there's been some use of a hybrid type of pulp that requires significant purification processes, which has a significant cost. I don't see at least any significant reason why that gap should narrow. In some specific segments, it may even increase.
Hardwood dissolving pulp is, purely from a pricing perspective, it's more attractive than softwood because ultimately, softwood has significantly higher cash costs associated with it. I would say over time, in some of the more specialty applications, and when I mean specialty, specifically going beyond the few, which is textile fibers, I think you'll see even the possibility for some expanding of that pulp.
Okay. Just my final question regarding cash cost trends. If I have understood correctly, you pointed that a significant part of the improvement in cash cost comes from a higher efficiency process on the wood cost. I'm a little bit puzzled with that in the sense that my perception was that dissolving would imply a higher consumption of wood and therefore a higher associated cost regarding wood. However, you keep on improving significantly the cash cost throughout this quarter. That assumption is correct, yes, dissolving comes with a higher wood consumption. If that is correct, then we have seen a meaningful improvement then in terms of wood cost on the other side of the business. Is that the correct way to see this, or is there any missing point that I'm not taking into consideration?
I think it's correct. If you start from the assumption that all of the inputs remain exactly at the same price level, or in this case, at the same cost level, particularly considering variable costs, that the more migration or the higher the production of dissolving pulp, you would expect, in fact, with a combined cash cost to see an increase in that cash cost. The fact that you're seeing a decrease, it's a reflection of what I said in terms of some improvement on the input prices of the variable cost components, but also in terms of a higher stability on fixed costs.
Just to note that when we start thinking in terms of variable costs for DP, China, which in fact is, by all measures, a small plant in the global context of DP, or at least a small to, but it is on the lower end in terms of capacity, but China is probably at the top end in terms of the lower cash costs. A lot of that deals with efficient use of the inputs. The particular species of eucalyptus, hardwood that we use in Portugal allow us to have a very, very strong efficiency use in terms of specific consumption, significantly below what is the standard for the industry. As I said, if all remains the same, the more or the higher the weight of dissolving pulp, you should see higher cash cost.
The fact that you're seeing a reduction in that cash cost actually speaks to the significant work that I think our teams have been doing at managing the cost inputs and on the operational side of reaching very, very high efficiency work.
Thank you.
Ladies and gentlemen, please be reminded that in order to be able to ask a question, you must press the star key followed by five on your telephone keypad. Our next question comes from Bruno Bessa from Caixa Bank BPI. Please go ahead.
Yes. Thank you for the follow-up. Just to presently follow up on the cash cost front. If you could give us an indication of your expectations about cash cost evolution for next year. Also related with this topic, where do you see your cash cost stabilizing under a scenario in which pulp prices recover $600-$650 per tonne? Where do you see your cash cost structurally stabilizing in the future? Lastly, just a bit of a more technical one. I saw in Q3 a relevant reduction in terms of net financial costs. What is left between EBIT and earnings before tax? The number I get is EUR 2 million negative compared to EUR 11 million in Q2 and EUR 8 million in Q1.
Just trying to understand here what was the driver behind this, if there was here any kind of currency hedging effect or something that could explain this decline. Just trying to extrapolate for what is left from the year. Thank you very much.
Thank you, Bruno, for the follow-up. Perhaps Miguel will be able to give you a bit of an outlook and specifics on the net financial cost, and I'll follow up with any additional comments.
Sure. No, it's a fair observation. In fact, we've been increasing our financial costs. First of all, because we've been paying less interest. Also, the rates have been decreasing, and that has an impact on the amount of interest that we have to pay. This year has been very challenging in terms of FX gains and losses. On the previous quarters, we have seen significant losses in FX due to the ongoing and continuous depreciation of the U.S. dollar. We have a better quarter on that side also that helped the improvement on the financial results. As Bruno mentioned, we also have some hedging. The more the U.S. dollar depreciates, the more we gain with that hedging. In fact, in this last quarter, we had also an improvement in terms of the result of that hedging.
All these combined, there is a significant improvement in terms of financial costs for the quarter.
Thank you, Miguel. Just one additional note in terms of because you asked around cash cost future trends. I would say for us, I mean, we see continuation of the current detailed focus in terms of our cash cost structure. Obviously, as I mentioned before, the fact that you're doing more dissolving pulp, we're likely to see some pressure on the average cash cost. Both on the DP, we're talking about our cash cost across units starting with kind of to be at the market or close to being market leader. In terms of paper pulp, I mean, the fact that we have continued to reduce, it means that we've seen some increased reductions on paper pulp. Looking into 2026, our expectation is that we'll probably continue to see some additional efficiency.
The trend that you've seen this year, I think for next year, probably on an average annual price, will be somewhat at a similar level or, again, very low single-digit reduction.
There are no further questions from the conference call. We'll now start with the written questions. Our first question comes from Carlos Jesus from CaixaB I. Good morning. Could you update us on your view on growth alternatives to the Gama project? If the project eventually does not go ahead, do you see the company targeting more dissolving capacity apart from the conversion investments already being made in your own infrastructure? And would this be through acquisitions, or are you open to downstream opportunities in sustainable textiles?
If I think through in terms of implications of Gama project, it is a unique project on its own. It has a very specific structure. Clearly, our objective with Gama was to continue to increase our presence in DP and also taking a step further in terms of sustainable textile opportunities, downstream opportunities. Both of those, we continue to pursue projects within our existing infrastructure, as you've seen. Ultimately, our direction of travel in the long term is going to continue to focus on increasing our presence in DP and in sustainable textile. Whether that will come from capacity optimization, I mean, we still have some optimization to do even within Biotek after conversion. We obviously continue to be open in terms of possible opportunities on M&A in the future. Our focus right now is on the key projects that we have underway.
We will see in terms of the Gama project, ultimately, when we receive the green light for that project, how it looks like in terms of the overall structure that we may end up adopting. As you know, that project would be a project that we would undertake with partners, which is a little bit of a different structure compared to all the other projects we are doing directly within Biotek for the year . Just an additional note in terms of the downstream opportunity for sustainable fibers, the acquisition for the majority stake in AeoniQ not only gives us control over a market-leading next-generation technology in sustainable textile, it allows us to do integration within our own facilities. Ultimately, I think it positions us in a very broad at-scale opportunity that we have the intention to fully take advantage of. That is more of a longer-term development.
Thank you.
Our next question comes from Luis De Toledo from ODDO. Good morning. Regarding wood availability in China, besides the construction sector relaxation, do you see other structural reasons which could explain the reduction in cash cost in China and Indonesia?
No, I think the situation with stronger availability of domestic fiber in China has been playing out over the last few years. There's been a significant reduction in construction activity. There's still quite a bit remaining. I think the current balance in terms of end users for their domestic fiber is probably not going to change dramatically in the future. If anything, what you're seeing is to use fiber into pulp application, it's the lowest return for forest operators. The market has in and of itself been restructuring significantly. We do not see an increase in terms of available area. The question is whether there's going to be a change in that ratio. Given how depressed the construction industry has been, I do not think we'll see much of a change.
What you may end up seeing is upside pressure in terms of the cost of that fiber. We've seen that play out through the summer. I don't expect that to change significantly. When it comes to overall cash cost of operators in China. Indonesia is a bit different. I'll get to that in a minute. In terms of China, I see actually some downside risk in terms of increased marginal cost for those operators because of the upward pressure. If you look actually at the statistics, even while we've had an increase in usage of domestic source wood, imports remain relatively at the same level. It was not a substitution of imported fiber because of Vietnam, which is the majority of the major supplier of fiber in China. The new integrated capacity was taking advantage of that greater availability of domestic wood.
I personally, at least from our understanding and from a number of investigations we've done recently, we don't see that changing very significantly. If anything, it will be to the downside on the marginal, in this case, the increase in the marginal cost. Regarding Indonesia, it's a very different playout. None of that wood also is certified. There's been some plantations of lower-grade fiber. That usually has implications also from an operational capability. Clearly, there is some additional space for new plantations. If it comes at the expense of deforestation, that has huge implications of where that pulp could end up. With some increased regulation and increased requirements and traceability, I think that's not going to be necessarily an easy proposition. As I said, operationally, it's much less efficient.
Even if you were to have an increase in Indonesia availability, it would come at a high expense, both on an environmental footprint as well as from a long-term financial sustainability. You can see that just considering some of the delays, basically in the DP expansion project, which has consistently suffered delays because of that equation not being necessarily very clear. Thank you.
The final question comes from a written form, which is regarding the dividend outlook versus the €0.30 that were distributed last year, given Altri's low results and challenging market environment? I'll pass to Mr. José Pina.
Just a quick comment on that. Obviously, we have been very focused on shareholder remuneration. As you all know, we do not have a dividend policy. That has not precluded us from having a continued dividend outlay. This year, we had somewhat of an increase because of the results. I think it reflects the good results of last year. We'll assess that in the early part of next year. Clearly, we'll be continuing on shareholder remuneration as a key element of our value proposition. I don't see any significant reasons why that would necessarily change. We've done that over different parts of the cycle. It wouldn't be necessarily different. As I said, that's a decision we always make in the first quarter of the following year. Thank you.
This concludes today's event. We thank you all for your presence. Ladies and gentlemen, you may now disconnect your lines.