Aracruz Plans Pulp Capacity Expansion in Brazil

July 17, 2008 - Aracruz Celulose said that it has preliminary plans to build a pulp mill complex in the Brazilian state of Minas Gerais that could house up to three pulp mills, each capable of producing up to 1.4 million tons a year of hardwood market pulp.

Construction of the first mill would require an investment of some US$2.4 billion, including the purchase of land, formation of forests and the industrial project, Aracruz said.

Construction would begin in 2013, with startup of operations expected in 2015.

Aracruz's Board of Directors must approve the project before it moves forward, the company said.

“The choice of Minas Gerais mainly was due to the support of the local society for the project, translated into an invitation by the government of the state to set up a unit in the region,” said Carlos Aguiar, president and CEO of Aracruz.

This is the third expansion project announced recently by Aracruz and, according to the company, will contribute to the fulfilling of its strategy for sustainable growth and goal to supply 25% of the global demand for hardwood market pulp by 2015, which would be about 7 million tons per year.

The forestry investments in the new project are expected to total US$600 million through 2010 to establish the company's own forest plantation base of up to 80,000 hectares of eucalyptus trees and 70,000 hectares of native forests, Aracruz said.

Another 40,000 hectares of eucalyptus plantations are to be the object of agreements with about 1,600 farmers participating in the Aracruz Forestry Partners Project (an average of 25 hectares per contract), the company added.

SOURCE: Aracruz Celulose

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