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"The Challenge is the Sustainability of Operations"

Matías Domeyko Cassel is the executive vice president of ARAUCO, a position he assumed after holding various roles in the company since 1987. This Commercial Engineer from the University of Chile answers vital questions for the timber industry as a new year begins, marked by the consolidation of the Arauco Plant Improvement and Expansion Project, known as MAPA—an initiative that became the largest investment the ARAUCO group has executed in its history.

What is the importance of the forestry sector today for Chile?

The forestry sector is a fundamental pillar of our country's economy, contributing significantly to the national GDP and generating around 300,000 direct and indirect jobs across various regions of Chile. After mining, it is the second-largest economic activity in terms of exports, producing a wide range of pulp, wood, and energy products that are essential to meeting the needs and daily lives of millions of people.

However, forestry activity goes beyond the economic boundaries of renewable wood production and its many derivatives. It is also a vital labor and social ecosystem, deeply rooted in regions with rich traditions and ways of life tied to wood. Additionally, forests and plantations play a crucial role in biodiversity conservation and combating climate change.

Thus, the forestry sector is called upon to contribute to building new and significant paths for the economic, environmental, and social development of our country and the planet.

What position do you observe for the Chilean timber industry in the world? Is it progressing or regressing?

The national timber industry is a relevant global player that has experienced significant growth and development. We take pride in being part of such a dynamic sector, as demonstrated by highly developed countries like Sweden and Finland, where forestry is a cornerstone of their culture and development.

Globally, there is a growing demand for wood—even according to a WWF study, consumption is expected to triple by 2050. This is because wood is the only renewable resource that can be sustainably produced for large-scale use in construction, furniture, and a vast array of products.

As a company, we have sought to position ourselves and respond to the increasing global demand for wood-based projects. That is why we are completing the construction of a Laminated Beam Plant in the commune of Yungay, Ñuble Region, which will expand our engineered product mix to offer a wood-based construction solution to clients—from project development support to assembly advisory.

The Modernization and Expansion of the Arauco Plant (MAPA) is another concrete example of our commitment to Chile, positioning it as a key player in global markets.

Does the current forestry institutional framework in the country promote or incentivize the development of new projects?

Chile is undergoing times of social, cultural, and institutional change. For the forestry sector's development, institutional frameworks will always be important, but we understand that public policies and state institutions must evolve alongside society.

The main challenge we face as a sector is ensuring the sustainability of operations, which are inherently long-term endeavors. We must explore diverse working methods to ensure sustainable forest management, promote continuous training for workers and businesses in the sector, contribute to local economic dynamism, advance conservation of high-value environmental areas, and drive applied research.

What are the main challenges the forestry sector must address in the short and medium term?

Undoubtedly, we face very complex challenges—not just as a sector, but as a country. One of them is ending the persistent violence affecting workers, entrepreneurs, and thousands of families tied to the timber industry. Violence must not be normalized, nor should fear be allowed to dominate our society.

As a sector, we also play a crucial role in combating climate change. Our mission is to make our territories and country more resilient, both in mitigation and adaptation, ensuring that wood production and its derivatives become a contribution to the planet and the sustainable development of every forestry-oriented community in Chile.

A third challenge is strengthening productive linkages between companies of different sizes to deepen a diverse, dynamic, and innovative ecosystem. We have taken steps in this direction, but there is still work to be done.

Do you acknowledge past mistakes regarding local communities where your company's plantation assets are located?

As part of the forestry sector, we recognize that we are part of a major challenge and, therefore, want to be part of the solution. For over a decade, we have fostered new dialogue spaces with communities to collaboratively find associative solutions and become a development factor in the territories where we operate. This has undoubtedly allowed us to engage in conversations and make progress with many rural communities and numerous Mapuche communities in the regions where we coexist.

Our key lesson over these years is the necessity of dialogue, where public and private contributions enable a new pact with indigenous peoples, fostering a harmonious and virtuous coexistence. As ARAUCO, we have forged agreements aimed at this desired future, but the convergence of all stakeholders is required. We remain open to exploring innovative solutions based on informed dialogue.

And regarding Forest Contractors, what importance do you assign them in the company's development, and what should be the focus to help them grow and contribute as entrepreneurs?

Forest contractors are essential to our company's work and the industry's value chain, as they carry out forest operations—from planting, pruning, thinning, and harvesting to transporting logs to their destinations. This is critical work, with high productivity and safety standards, spanning five regions of our country.

In recent years, they have experienced significant growth and development in technology, training, and cutting-edge equipment. This is key because, now more than ever, we need strong and capable contracting companies.

It has been argued in society that Chile's current forestry model promotes high concentration of plantations, inequality, rural poverty, and native forest destruction. Do you believe this model can continue, or are adjustments needed for social acceptance?

We are convinced that conditions must be created for the forestry industry to remain a true development factor in the territories where we operate.

Our presence today generates over 17,000 direct jobs, and we work with more than 700 contracting companies that, in turn, employ 20,000 workers, driving local service purchases in Chile worth around $800 million annually. Additionally, in the regions where we operate, we strive to contribute by understanding each area's conditions and needs. While much remains to be done, we believe we have implemented significant initiatives impacting local economies, education, and employment, among other areas—motivating us to continue developing projects that foster dynamism and human development in our localities.

What do you believe is the core issue preventing progress toward resolving the violence affecting the sector, particularly Forest Contractors and their workers in southern regions?

We must share a diagnosis. Society must reject and understand the harm caused by violence. Respecting the rule of law and supporting professional and responsible actions by public order institutions are prerequisites for progress. We need coordinated efforts between the public and private sectors to guarantee safety for forest contractors and all workers in the area who want and deserve to work in peace.

How will the company engage with the new political cycle, which incorporates many demands and rights in our country?

At ARAUCO, we have always sought to contribute to Chile and its development within our scope. Our intention is to enrich the debate with concrete ideas and proposals that help advance toward a better country. Today, we feel part of the challenges Chile must address, as we are a company unafraid of change—only of stagnation. Above all, we trust in our country and its institutions.

We are part of the world of wood—a vast network of organizations, businesses, and workers who yearn for changes that make Chile a better place for all. Our commitment is to continue collaborating as a sector and as a company to achieve this.