Chile's CMPC Purchases Assets From Brazilian Pulp & Paper Company Aracruz

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Researched by Industrial Info Resources (Sugar Land, Texas)--Chilean Stock Pulp and Wood Corporation (CMPC) (Santiago) reached an agreement to purchase assets from Brazilian company Aracruz Celulose e Papel in Guaiba, Rio Grande do Sul. The investment cost of the transaction is estimated to be $1.43 billion, which will boost the company's current production capacity 22.5%. The sale is expected to be completed in December.

The purchased assets include a pulp mill, environmental permissions and licenses for expansion, 212,000 hectares of eucalyptus production, and a paper plant with a manufacturing capacity of 60,000 tons per year. The Guaiba eucalyptus pulp mill has a current installed production capacity of 450,000 tons of pulp per year, which could increase to 1.3 million tons if the facility is expanded.

Company officials are evaluating the possibility of constructing a pulp plant next to the mill, rather than expanding it. If the project is carried out, CMPC's pulp-production capacity will rise to 3.55 million tons per year, making the company the second-largest producer of cellulose in the world.

In the past five years, the Chilean company has invested $2.4 billion in different business units. Through the acquisition of the Brazilian company Melhoramentos Papeis in April 2009 and the recent acquisition of the Guaiba pulp mill, CMPC has become one of the most important cellulose enterprises in Latin America.

The Guaiba pulp mill started operating in January 1971 and has a current installed capacity of 450,000 tons per year of bleached kraft softwood pulp. At present, approximately 500 people work at the facility. The plant is equipped with a 150-megawatt cogeneration plant. CMPC produces and markets wood, pulp, tissue, paper and paper products. Located in Santiago de Chile, the company has more than 20 operating mills in various Latin American countries and exports products to throughout the world.

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