Brazil Expands Already Strong Pulp Sector with World-Scale Projects

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Written by Eric Funderburk for IIR News Intelligence (Sugar Land, Texas)

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Summary

Brazil is a leader in global pulp exports, and current and planned construction in the country's pulp sector adds up to several billion dollars' worth of investment.

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Processing Raw Materials

Pulp mills serve as the foundational upstream portion for the manufacture of paper products, which range from everything from toilet tissue to corrugated boxes. Pulp mills convert wood or recycled paper materials into the cellulose fibers used in the downstream manufacture of paper products.

While Industrial Info Resources data indicate that China leads the world for active construction projects at pulp mills, in many cases, these Chinese pulp-processing facilities are part of a vertically integrated plant that ends up producing completed paper products.

Nothin' but Pulp, Baby!

Outside of China, Brazil easily eclipses all other nations when it comes to current and planned construction at pulp mills--and these mills are being constructed at a large scale exclusively to produce pulp to be sold down the value chain to paper-products manufacturers. These pulp mills turn massive quantities of wood or spent paper products into the fibers used by Brazil's many downstream paper products plants as well as multiple destinations throughout the world, including China. Brazil is one of the one world's leading exporters of pulp, particularly of the hardwood pulps (primarily from eucalyptus) ideal for tissue products and printing paper. Industrial Info Resources data show more than 100 capital construction projects underway or planned for Brazilian pulp mills and another 48 planned maintenance shutdowns and programs.

Current Construction

Industrial Info Resources data show around US$2.75 billion worth current construction underway at Brazil's pulp mills, and one project easily eclipses the others in scale: Arauco do Brasil SA's grassroot eucalyptus pulp mill under construction in Mato Grosso do Sul state. Operations are expected to kick off next year and begin ramping up toward annual production of 3.5 million metric tons per year of short-fiber pulp. The full project consists of many components in addition to the main mill, such as a wastewater treatment facility, a rail spur and a 400-megawatt (MW) biomass-fired power unit that will provide more than enough power for the facility, with excess sold to the grid.

Other current projects are notably smaller but are still substantial investments. Power, along with steam for industrial processes and chemicals recovery, is a large component of Klabin SA's replacement of the black liquor-fired recovery boiler at the heart of the company's operations at its pulp/paperboard mill in Telemaco Borba, Parana, which is drawing to a close after nearly two years of work. The mill produces around 140,000 tons per year of pulp.

Future Construction

Several blockbuster pulp projects are on the books for Brazil's future, with an especially notable one coming in the form of Bracell Bahia Specialty Cellulose SA's planned grassroot pulp mill in Mato Grosso du Sul state, 275 kilometers (170 miles) south of Arauco's similar project in the state. Industrial Info Resources pegs total investment required for the plant at around US$6 billion, and like Arauco's world-scale facility, Bracell's plant includes multiple components, such as wastewater treatment and a 400-MW biomass-fired power unit.

Multiple other projects add billions of dollars toward potential future investments, including a planned 2.5 million-ton-per-year pulp facility in Rio Grande do Sul. Multiple smaller projects also are part of Industrial Info's pulp coverage, such as basic upgrades to the recovery boilers at Suzano SA's 2.5 million-ton-per-year mill in Aracruz, Espirito Santo.

Maintenance at Brazilian Pulp Mills

As a leading provider of the world's pulp, regular maintenance is essential in keeping Brazil's pulp mills operating efficiently and productively. Industrial Info Resources is tracking 48 planned maintenance events at Brazil's pulp mills from this year into 2028, carrying an estimated combined value of more than US$440 million. Mato Grosso du Sul, where so much pulp construction is happening, leads in this spending, although the highest number of individual maintenance shutdowns and programs is set for the state of Sao Paulo.

Key Takeaways

• Brazil's pulp sector accounts for around US$18 billion in current and planned capital construction projects.
• The state of Mato Grosso du Sul is home to two world-scale pulp projects--one presently under construction, and work on the other expected to kick off early next year.
• Industrial Info Resources' coverage of Brazil's pulp sector also includes information on 48 planned maintenance events.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).