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Climate change hits Celulosa Arauco: announces indefinite suspension of its plant in Licantén

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Arauco, through a statement and an essential fact reported to theFinancial Market Commission(CMF), announced that it decided to suspend "indefinitely the production of cellulose" at the Licancel plant located in the commune of Licantén, in the Maule region.

The company explained that the decision was based on a "set of difficulties" faced by the plant, especially recently.

"The extreme climate variability, with consecutive floods of theMataquito Riverduring this winter, extreme drought periods that caused repeated stoppages in the plant's operation in previous summers, and high-impact forest fires" were among the reasons.

Additionally, they stated, "the absence of a public policy promoting reforestation over the past decade has led to low availability of wood for industrial use."

Local authorities are already aware of this information.

The 163 workers of Licancel, as well as contractors, have also been notified. For them, Arauco has developed an exit plan to "minimize the impact on them and their families as much as possible."

In the coming weeks, the company will carry out cleaning and maintenance work on the plant's equipment, which has an installed annual production capacity of approximately 160,000 tons of raw pine cellulose, accounting for 3% of Arauco's total annual cellulose production capacity and 1.7% of the company's total revenue for 2022.

In the essential fact submitted to the CMF, the company detailed that the Licancel facilities were built in 1992.

In 1999, when it acquired them, it paid US$104 million to the Swiss company Attizhold Holding.

Finally, Arauco acknowledged the consequences of the indefinite suspension of these operations for fiscal year 2023 (a net amount of deferred taxes worth approximately US$55 million).

Source:www.biobiochile.cl