Arauco announced yesterday, 22nd, the installation of a pulp mill in the municipality of Inocência (Mato Grosso do Sul, Brazil). The investment is estimated at BRL 15 billion (US$ 3 billion) and marks the arrival of the Chilean group to the pulp industry in Brazil – Arauco was already present in the country with forestry operations and four wood panel plants.
The “Sucuriú Project” will have a production capacity of 2.5 million tons per year of eucalyptus pulp and should start operating in the first quarter of 2028. In addition, it will increase Arauco’s production capacity by around 50%, from 5.2 million tons per year including the Mapa Project – its ongoing expansion in Chile – to 7.7 million tons per year.
The agreement was made official during the launch event of the State Plan for Planted Forests (Profloresta), of the State Secretariat for Production, Environment, Economic Development and Family Agriculture (Semagro), which was attended by Governor Reinaldo Azambuja Silva, the CEO of Arauco, Matias Domeyko Cassel, among other authorities and executives of the group.
From now on, the company will start the environmental licensing of the project, one of the conditions that must be met for the investment to be executed. The project must be submitted for approval by the board of directors in the second half of 2024, with construction starting in January 2025.
According to the president of Arauco in Brazil, Carlos Altimiras, approximately 380 thousand hectares in gross area will be needed to develop the factory. The group already has 60,000 hectares, of which 40,000 are planted with eucalyptus, and is already negotiating to guarantee enough wood to start operations in 2028. In 2024, it intends to reach 70% to 80% of the total area needed.
The site will be the most competitive of the Chilean group, with an average distance of 150 kilometers between the plant and the forests. Installed on the left bank of the Sucuriú River, it will have quick access to pulp flow channels.
Using a renewable source, the future plant will be self-sufficient in energy, with a generation capacity of 400 megawatts (MW) from the reuse of biomass. The surplus energy (200 MW) will be sold on the free market.
With the Mapa Project, which should start operating in the second half of this year, Arauco will become the second largest producer of market pulp in the world, behind only Suzano. The group has fiber plants in Chile, Argentina and Uruguay, where it is a partner of Stora Enso in the Montes del Plata joint venture.
“Brazil is an important hub for Grupo Arauco’s global strategy. We have been operating in the country since 2002, with the wood and forestry divisions, and we are now evaluating increasing the investments made in Brazil, bringing the pulp sector here. We are very excited about this possible large expansion of Arauco’s activities to Mato Grosso do Sul, a very important region for the industry, with great potential for planting eucalyptus and excellent logistical options for the flow of production, in addition to adding many economic benefits for the region, and with a clean energy production and positive carbon credit”, said the CEO of the Chilean group.
According to the state government, the project is expected to generate more than 12,000 jobs at the height of construction. In operation, the site will employ 2,350 people, of which 550 in the plant, between direct and indirect, and 1,800 in the forestry area.
“We are going to receive one of the largest pulp mills in the world in the state. It will be a modern unit, which will generate jobs, opportunities, income and social development in a region that is also part of the Forest East Coast, but which did not have any enterprise of this type. The arrival of this plant shows the confidence of investors in Mato Grosso do Sul, in our policy of tax incentives, in the legal security of those who invest and in the logistical structure that we are creating for those who need to sell production”, said Governor Reinaldo Azambuja.
For Secretary Jaime Verruck (Semagro), from now on, the great challenge for the state is logistics. “This industry that is being installed in Ribas do Rio Pardo city (Suzano) and the one we are announcing today, they generate the capacity for Mato Grosso do Sul to maintain its growth rate over the next 4 to 5 years at rates above 5%”, he said, noting that the government should also invest in training the workforce.
This will be the fifth pulp plant in Mato Grosso do Sul. Suzano has two units in operation in the city of Três Lagoas, which produce 3.25 million tons per year, and one under construction in Ribas do Rio Pardo, which will manufacture 2.55 million tons per year. Eldorado Brasil maintains its only plant in operation in Três Lagoas, with a production capacity of 1.8 million tons per year.
Celulosa Arauco y Constitución is a Chilean company in the wood sector, specialized in the manufacture of cellulose and wood panels. The company belongs to the AntarChile Group, founded by Anacleto Angelini, and has five pulp mills in Chile and one in Argentina, in addition to four facilities for the manufacture of plywood, two in Argentina and two in Brazil.