At the Global Woodchip and Biomass Trade Conference in Singapore last week, Afry shared an intriguing slide.
At first glance, making its own pulp seems beneficial for the tissue maker in these years, as shown in the first chart below. However, I suggest you consider another variable in your calculation: the cost of capital employed.
Arauco's Sucuriu Project is projected to require an investment of USD 1,300 per ton of pulp. With K-C's Weighted Average Cost of Capital (WACC) at 6.5%, this translates to a cost of USD 85 per ton.
The gap between the scenarios will decrease, as illustrated in the second chart below.