Earthquake Forces Chilean Pulp, Paper & Wood Companies to Halt Production

---

Researched by Industrial Info Resources (Sugar Land, Texas)--The magnitude 8.8 earthquake, which hit south-central Chile on February 27, brought about the suspension of operations in many Pulp, Paper & Wood mills, especially in the most affected Chilean regions of Bio Bio and Maule.

Extensive damage to Chile's infrastructure interrupted the supply of water and electricity to mills and affected the transport of finished products to customers. Company officials from major producers, such as CMPC (Santiago, Chile) and Arauco (Santiago) have stated that mills are expected to resume operations in April. They added that they have an all-risk insurance (including insurance against quakes and tsunamis), so the cost of the damages to infrastructure and the cost of the loss caused by the halting of production will be refunded.

As the Chilean pulp industry accounts for about 8% of the world's output, one of the effects on the pulp market will be the rise of prices in the European, Latin American, and American paper industries. The shortage of raw material may lead to an increase of $70 per ton of pulp, and it may even increase to $200 per ton, which will in turn affect the companies'planned budgets.

CMPC is a company that produces and commercializes wood, pulp, tissue, papers and paper products. Located in Santiago, the company has more than 20 operating mills in various Latin American countries and exports products throughout five continents.

Arauco is one of the largest forestry companies in Latin America. It commercializes and produces kraft woodpulp, sawntimber and panels. The enterprise currently exports its products to more than 50 countries.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.