Pulp and Paper

Arauco - Mato Grosso Do Sul

Arauco to Invest $3 Billion in Construction of New Pulp Mill in Brazil

June 23, 2022 - Arauco has announced that on June 22 it signed a US$3 billion investment collaboration agreement with the government of Mato Grosso Do Sul in Brazil for the construction of a new pulp mill.

Arauco has named the initiative "Project Sucuriú."

The new mill would have a production capacity of 2.5 million tons of hardwood pulp and would be located 50 km from the municipality of Inocência.

Matías Domeyko, CEO of Arauco, commented, "Brazil is an important pole for the company's global strategy — a country where we have a presence since 2002 and where we are evaluating increasing our investments by entering the pulp business."

Arauco emphasized that the project is subject to a number of variables that are being studied. Among them, market conditions, the environmental impact permit, the timber offer assessment, and the approval of the Board of Directors.

If conditions allow for it, the construction stage of this new plant could begin in 2025, the company added.

Arauco noted that the area of Inocência offers several benefits from a logistics point of view: there is a high-quality forest mass near the plant and the area facilitates pulp exports to other regions.

With headquarters in Chile, Arauco is an industry leader in manufacturing and distribution of composite panels, plywood, millwork, moulding, TFL, lumber and wood pulp.

SOURCE: Arauco


wood chips

Chinese Demand Drove Global Trade of Hardwood Chips Higher in Early 2022

June 13, 2022 - In 2021, the world’s shipments of wood chips reached almost 35 million m3, close to the highest on record. Significant expansion of pulp capacity in China combined with a lack of domestic wood fiber has driven the global increase in traded wood chips over the past decade (see chart). About four-fifths of the trade was hardwood chips in 2021, predominantly destined for pulp mills in Asia, while the remaining volume was softwood chips.

According to the Wood Resource Quarterly, importation to China reached a new record-high of 14.8 million odmt in 2021, a 12 % increase from the previous year. This rise was a continuation of an unprecedented upward trend that started in 2008 when China imported only one million odmt. During the first four months of 2022, China’s wood fiber demand continued to rise and was 10% higher than during the same period in 2021, accounting for 56% of the world’s hardwood chip imports.

wood chip trade

Outside of China, the trade of wood chips has been relatively stable over the past ten years, ranging between 19-21 million tons annually, except for 2020, when total shipments fell to just over 17 million tons. This decline is attributable to the short-term supply chain disruptions due to COVID-19 rather than a change in forest production trends. In early 2022, total imports to Asia (excluding China) and Europe were practically unchanged from 2021.

When the investments in large-scale pulp mills in China began to take place in 2008, the preferred wood fiber was predominantly lower-cost and lower-quality Acacia wood chips from Vietnam, Thailand, and Indonesia. This started to change in 2013-2014 when pulp mills saw the cost and quality benefits of using higher density wood chips such as Eucalyptus Nitens and Eucalyptus Globulus from Australia and Chile. As a result, from 2012 to 2017, the high-yield fiber share of total imports dramatically increased from 11% to 47% of the total import volume.

However, in 2018, this five-year rise in market share leveled off and fell during 2019-2022 to only 30% in the 1Q/22. With the supply of hardwood fiber becoming tighter around the Pacific Rim, the fiber sourcing by Chinese pulp mills will likely continue to evolve, including the possibility of new regions coming into play.

The Wood Resource Quarterly (WRQ) is a 70-page report that tracks prices for sawlog, pulpwood, lumber and pellets and reports on trade and wood market developments in most key regions worldwide. To learn more, visit: woodprices.com.

SOURCE: Wood Resources International LLC


swedish freighter unloading pulp

International Forest Products Partners in Creation of Global Forest Products AB in Sweden

May 13, 2022 - International Forest Products LLC (IFP) announces its participation in the creation of Global Forest Products AB (GFP), a new joint venture trading company in Gothenburg, Sweden. The venture is a collaboration between IFP, Fredrik Anderson, and Johan Rafstedt and will provide suppliers and customers a platform with sound financing, transparency, and cost efficiency.

Mr. Anderson has more than 25 years of experience in the forest products industry, most recently as CEO of CellMark, and Mr. Rafstedt brings 25 years of financial services experience, including the role of CFO of CellMark. The new company will trade in market pulp, paper and packaging products, chemicals, recycling materials, and other forest products commodities.

“We are excited to partner with IFP and have access to their financial and logistics strengths, as well as more than 50 years of trading experience to launch this new trading platform,” said Fredrik Anderson. “We will be adding experienced traders to our team in the coming months.”

Dan Kraft, President and CEO of IFP, stated, “Creating this new entity and partnering with Fredrik and Johan and their experienced team of traders will further expand our worldwide reach. We look forward to collaborating with them to enhance the diversified products we offer our loyal customers around the globe.

Founded in 1972 by Robert Kraft, IFP is a member of the Kraft Group of companies and is one of the largest traders of forest products commodities in the world. IFP provides solutions for sales and marketing, transportation and logistics, and finance for suppliers and converters.

SOURCE: International Forest Products LLC (IFP)


LD Celulose

LD Celulose Ramping-Up Production at New Dissolving Pulp Mill in Brazil

April 25, 2022 - LD Celulose S.A, a joint venture between the Austrian company Lenzing and the Brazilian company Dexco, invested about USD 1.3 billion in a 500,000 tonne/year dissolving wood pulp mill in the Triângulo Mineiro region in Brazil. Valmet delivered the key process islands and integrated automation solutions for the mill. The equipment operations and the production ramp-up in the new mill have now successfully started.

Valmet delivered the project with extended scope of supply. Detailed engineering for the project was started in the beginning of 2020 and the installation works at the site in the beginning of 2021.

"Our new mill brings a positive socioeconomic impact throughout the region," said Luís Künzel, CEO of LD Celulose. "The dissolving pulp is a key raw material for manufacturing Lenzing's wood-based textile and specialty fibers.

"This mill is among the most productive and energy-efficient mills in the world. We have adopted the most advanced technologies in the mill, not only in the sustainable production process, but also in the solutions that seek to reduce emissions to the environment. We are very happy that despite the outside challenges we have been able to follow our schedule," Künzel explained.

Bertel Karlstedt, Business Line President, Pulp and Energy for Valmet, commented, "This project is an excellent reference of dissolving pulp technology and our green field pulp mill delivery capability. Almost everything in this project was implemented during the global Covid-19 pandemic. We have been working remotely in engineering, project management and even in factory acceptance test for the automation system. This has required a lot of trust and communications between the Valmet and LD Celulose teams and special attention to planning and scheduling. I'm pleased to see how our teams have reached this important milestone of starting the production at the site."

Valmet's complete delivery included a fiber line, a pulp drying and baling line, an evaporation plant, ash crystallization, a white liquor plant, mill-wide automation system, analyzers and operator training simulators for all process areas.

Valmet noted that its Operator Training Simulator (OTS) will be used in all process islands, from the beginning to the end of production, with a total of 14 process areas. An innovative fact of the project is that its wood handling area is the first in Brazil to use OTS technology. Another highlight is the presence of simulators for the areas of water treatment, water treatment for boilers, effluent treatment and turbines, commonly little explored in the OTS.

Valmet is a leading global developer and supplier of process technologies, automation and services for the pulp, paper and energy industries. The company's technology offering includes pulp mills, tissue, board and paper production lines, as well as power plants for bioenergy production.

SOURCE: Valmet


sawn timber

Stora Enso Divesting Its Sawmills and Forest Operations in Russia

April 25, 2022 - Stora Enso has entered into an agreement to divest its two sawmills in Russia. The company’s Nebolchi and Impilahti sawmills will be divested to local management.

In addition, the divestment includes Stora Enso’s Russian forest operation which through its harvesting supplies wood to the sawmills.

Stora Enso’s assessment is that due to the uncertainties in the Russian market, local ownership and operation can provide a more sustainable long-term solution for these business operations and the employees working there.

The transaction is, pending necessary approvals, expected to be concluded within Q2 2022 and will have no material impact on Stora Enso’s annual sales and Operational EBIT. Due to decreased business prospects on these businesses, an impairment loss of EUR 70 million has been recorded in the first quarter result. The additional loss on the transaction under IFRS will be approximately EUR 60 million, consisting mainly of currency translation adjustments to be recorded at the closing date. The expenses are considered as items affecting comparability.

The sawmill sites are located in Novgorod and Karelia employing approximately 330 people and have a total annual capacity of 350,000 m3 of sawn timber, including 55,000 m3 of processed timber and 65,000 tonnes of pellets.

Stora Enso’s Russian forest operations employs approximately 170 people and manages long-term harvesting rights for around 370,000 hectares.

Stora Enso announced on 2 March 2022 that it would stop all production and sales in Russia until further notice. The Group is in a process to find a sustainable solution for the future of its three packaging plants in Russia.

SOURCE: Stora Enso

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