about 8mt a year.
six times the value of annual gross sales.
end of 2010.
past few years, has sold assets in the petrochemical and other
areas into which it diversified when pulp prices were low in the
1990s is soon to make a start on two brand new greenfield mills
in the north easterly states of Maranhao and Piaui.
When completed at an estimated cost of about $4.5 billion,
these two mills will add 2.6mt to the 1.7mt of market pulp
Suzano now produces at its Bahia Sul mill and at mills near Sao
Suzano has already bought 85,000 hectares of land in
Maranhao state, 35,000 of it planted with eucalyptus, from the
Vale company and all the pulp will be taken to the port of Itaqui
along railways owned by Vale as well. Itaqui is two days’ sailing
time closer to Europe than ports in the south, as well as to
China, destination for almost half the pulp exported by Suzano
and following a fall in sales to many countries in Europe, now a
third of that exported by Brazil as a whole.
With its economy booming, China anticipates making an
extra 4mt of various types of paper each year for the
foreseeable future. With its own pulp-making capacity limited,
much more pulp will have to be imported each year, possibly a
third of it from Brazil.
Wanting to become as integrated as possible, the Chinese
owned Asian Pulp and Paper (APP) is only one of several
newcomers expected to build new pulp mills in Brazil in the
near future. About 20% of the pulp now imported each year by
APP is Brazilian, most of it used to make tissue and sanitary
paper, for which eucalyptus pulp is ideally suited.
The Portuguese owned Portocel is also considering building a
brand new mill in Mato Grosso do Sul state, one of the new
frontiers for pulp in Brazil, as is a local consortium, with capital
from the world’s largest beef producer, the local JBS company, as
well as from Brazil’s Development Bank, the BNDES.
Attracted by the record pulp prices, the owned Chilean
CMPC company is considering increasing capacity at the Guaiba
mill it bought last year from Fibria, by 500,000 tonnes, sooner
rather than later. If it does go ahead, CMPC will have to pay
Fibria an extra $250 millions for the privilege. But this makes
good sense if pulp prices remain as high as they are now, which
seems very likely.
With the Brazilian economy booming, the countries leading
packaging company Klabin is finding it hard to keep pace with
soaring demand for all types of paper. Notably board and liquid
packaging, despite having only recently started up the world’s
largest single line packaging paper machine, a 150,000 tonnes a
To allow a second such machine to be built, Klabin is to build
a brand new 1.4mt-capacity pulp plant with any pulp surplus to
its own needs to be exported.
In common with many companies in the industry, Klabin,
which already owns 140,000 of forest planted with pine and
eucalyptus, as well as almost as much forest left to its own
devices, is moving to a new formula where a proportion of its
needs are produced by independent suppliers. Some other
companies are going further than that, and leasing — or in some
cases, selling — land to a new breed of investors who have
decided that forestry is a good long-term bet. Klabin is also
considering planting new areas in Mato Grosso do Sul, where
land is far cheaper than in Parana, Sao Paulo or Bahia states.
For the time being, plans by both Fibria and Stora to build
brand new mills in Rio Grande do Sul state have been put on
hold, although new forests continue to be planted in the region.
If all the stops are once again being pulled out in the pulp and
paper industry, where up to $22 billion will be invested in the
next five years, the corner has yet to be turned for Brazil’s
For the seventh year running, less will be exported this year
than in 2009.
Half as much wood and timber products were exported from
Brazil last year as in the peak year of 2004, when more than 7mt
This is partly because the days when high-quality timber from
the Amazon jungle could be being cleared and exported with
little regard for the impact on the environment, while laws and
regulations which existed on paper were rarely enforced, have
Concern about the impact uncontrolled clearances were
having on the environment has grown, and the Brazilian
government has undertaken to cut forest clearances drastically
in the next few years, activities are under much tighter scrutiny
The clandestine felling and exporting of wood has declined
At the same time, demand from Brazil’s main customer for
timber, the United States, has fallen as well, following the
contraction of the construction industry there, and an upturn
there is not expected in the near future.
With the economy growing fast, demand for furniture and for
timber for the construction industry is increasing in Brazil itself.
One result is that products which previously went to waste,
such as sawdust and off cuts, are increasingly being used to make
products such as particle board, and MDF.
For the same reason as the leading pulp producer in Chile,
CMPC, decided that buying the Guiaba mill from Fibria made
good sense, CMPC and other Chilean companies with little
potential for further expansion in Chile itself are investing
heavily in new processing facilities in the south, with output
mainly destined for export.