The news that Bracell has started the environmental license for a new Bleached Eucalyptus Kraft Pulp (BEKP) 2.8-million-ton greenfield mill in Brazil (Mato Grosso do Sul) made the phone ring a lot.
Along with Suzano’s Cerrado (ramp-up until 2025), CMPC, Arauco, and Paracel, South America alone will add 13 million tons of hardwood fiber in an 8-10 year period.
If you are a pulp buyer, this scenario may bring price relief, right? Maybe. But your business might face tough competition.
The verticalization trend in the industry might lead these huge pulp mills to integrate their production: RGE (Bracell/April) already produces Packaging, Printing and Writing (P&W), and Tissue, and so does Suzano. CMPC makes all these plus Specialties. Arauco is in the panel business, but it might integrate some of its production in Brazil for tax planning (paper or panels). Paracel is a new company, so all the cards are on the table.
Dynamic years ahead for all of us in the business.
