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Charles Kimber, spokesperson for forestry company Arauco: "The current climate for investors in Chile is not adequate"

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The People and Sustainability manager refers to Sucuriú, the multimillion-dollar investment the firm will make in Brazil. He cites wildfires and violence in the southern Macrozona among the factors preventing "large projects" in the country.

A couple of weeks ago, Empresas Copec announced the largest investment in the history of its subsidiary Arauco, the forestry company, amounting to $4.6 billion. The funds will be used to build a pulp plant for the Sucuriú project in the Brazilian state of Mato Grosso do Sul, which is expected to begin operations in the second half of 2027. Charles Kimber, Arauco's People and Sustainability manager, explains that they did not consider doing it in Chile because they lack the capacity to plant the necessary number of trees, and land prices are increasingly high. "There isn’t enough space," he states in his office in the residential neighborhood of El Golf, in eastern Santiago. In this interview, he discusses the "weakened" Chilean forestry industry and how violence and organized crime, among other factors, have impacted investment in La Araucanía and surrounding areas—a historic zone for the Mapuche people's ancestral land claims, where the conflict has grown more complex in recent years with crimes like timber theft and drug trafficking.

Question. Why did you decide to make the largest investment in your history in Brazil?

Answer. Brazil is the world's leading producer of short fiber, which over the last 25 years has grown in terms of production, acceptance, and customer adaptation to use it more than long fiber. Pulp and paper are made from combinations of long and short fibers. Therefore, being in Brazil, where our main competitors are, along with the largest and most efficient plants, is a good way to project ourselves in the long term. We also need geographic diversification. We can’t put all our eggs in one basket. We have pulp factories in Chile, Argentina, Uruguay, and now Brazil.

Q. How long did it take to materialize the project from the first permit request?

A. We started planting trees 10 years ago with the idea of building a pulp plant, and two years ago, we approached the government of Mato Grosso do Sul. Initially, it was a 2.5-million-ton plant, and now we’re investing in one with 3.5 million tons. We signed a memorandum of understanding with the Mato Grosso do Sul government to indicate our interest and begin the process of obtaining environmental and industrial permits to build the factory and secure our operating license. The environmental impact study was approved in 14 months.

Q. It will take five years from the first permit until operations begin. How long would it have taken in Chile?

A. For reference, the MAPA project, which until now was the largest investment Arauco had ever made at $3 billion, took 10 years. We had a pandemic in between that delayed us by a year. And Sucuriú is even bigger.

Q. Following the Sucuriú project, the regional economic secretary of Biobío, Javier Sepúlveda, said they hoped "the efforts companies make outside Chile would also be made in the territory where they were born." What’s your response?

A. Arauco has assets worth approximately $18 billion, 70% of which are in Chile. We just completed the largest project in our company’s history and the largest forestry project in Chile’s history, MAPA. It has been operating for 18 months. Three months ago, we announced an investment in an OSB plant, a construction material for the building industry in Cholguán. We have an approved environmental impact study for a wind farm south of Arauco, which would be an investment of about $250 million. That project faced legal challenges due to community claims against the environmental assessment system. The Ministers' Committee ruled in favor of the company in January, but we’re still waiting for the agreement to be drafted. This is a Chilean company, and our commitment to Chile remains intact, but opportunities arise worldwide.

Q. For 2025, out of the investment budget you have, what portion stays in Chile?

A. With Sucuriú now approved, 50% of the just over $2 billion will go to the project, and about $500 million will be invested in various projects in Chile. The remaining $500 million will go to Argentina, Brazil, Mexico, and the U.S.

Q. How has that investment changed over the last five years?

A. It has decreased because MAPA was very significant—it consumed a large part of the last five years. But in terms of timber, we have growth projects in Chile, like the OSB plant, and at the end of 2022, we launched the Highland plant for construction materials. We’re also constantly investing in our plants. Celulosa Arauco also requires capital investments to modernize equipment and maintenance, but not new [large-scale] factories because we don’t have the available fiber. In Chile, wildfires, timber theft, land seizures, violence, and lack of incentives for planting have reduced forest supply from 2.4 million hectares to just under 2 million hectares in the last eight years. This limited fiber availability prevents large projects like those being done in other countries. We’ve faced instability in Chile over the last 10 years that has discouraged investment in this sector. Large companies still invest, but not individuals or small and medium-sized businesses.

Q. Of the five factors you mentioned that have weakened the industry, which is increasingly impactful?

A. Wildfires are a major concern. What’s crucial is high-level collaboration between different organizations—forestry companies with their brigades and equipment, as well as the public sector, CONAF, local and regional authorities, firefighters, and others. There’s a well-designed plan that was implemented effectively last year. Timber theft has dropped significantly in the last two years due to strong action by investigative agencies: Carabineros, public forces, prosecutors, and judges. Many people have already been prosecuted for timber theft.

Q. Is this decline attributed to this government’s efforts?

A. There’s certainly recognition of the work done during this administration to reduce it. Criminal activity and land claims have also decreased. It’s not just about control, surveillance, and protection—alternative paths must be offered, and as the State becomes more directly involved in finding them, it’s a positive thing. But there are still areas, especially in southern Biobío, La Araucanía, and Arauco province, where operations are impossible due to groups closely tied to organized crime who maintain sovereignty. It’s difficult not only to operate but even to move around.

Q. How would you describe the health of Chile’s forestry industry?

A. It’s weakened, particularly in two areas: plantation development for future industrialization and small-to-medium-sized industries. They generally haven’t invested upstream in forests. They’ve always bought forests and logs, raw materials from third parties, and today that supply industry has shrunk.

Q. The Economy Committee of the Chamber of Deputies approved the sectoral authorization framework bill, known as 'permisología,' now in the hands of the Finance Committee. What’s your take so far?

A. In Chile, obtaining environmental permits still takes too long. We don’t have a high standard that protects the environment while allowing development and accelerating productive initiatives. This seems like an antagonistic equation, but in many parts of the world, it isn’t. Good examples are Brazil, the U.S., and Uruguay, where we’ve made investments, and environmental and sectoral authorities work with the goal of executing projects while safeguarding environmental, social, and economic conditions.

Q. Do you think the 'permisología' bill doesn’t aim to achieve that?

A. No, I don’t think it does—it’s not stated clearly enough. Unfortunately, in Chile, we’ve developed a culture where the regulatory side of environmental permits distrusts productive and economic activity. Undoubtedly, the private sector must do its job well enough to build trust, but here we need to align quickly because elsewhere, we’re competing against those who’ve already succeeded.

Q. Do you believe that if the 'permisología' law passes, it won’t bring the change Chile needs?

A. The sectoral authorization framework law may be a necessary condition, but not sufficient. Explicit backing is needed to affirm that economic development and growth are important. That’s not being heard. We still have two opposing sides: the CPC, SOFOFA, and others saying one thing, while the government and regulatory services claim they’re improving systems and 'permisología' to advance projects.

Q. What’s needed?

A. Conviction that economic growth and investment are important for the country. That requires reducing 'permisología' as a necessary condition, but also political will—promoting and working collectively to attract more investments and encourage existing investors to expand. There’s also insecurity and the five issues I mentioned earlier in our case, but the current climate for investors in Chile isn’t adequate. So, improving 'permisología' is necessary but not enough.

Q. Why isn’t the climate adequate?

A. Insecurity is a major issue. But when I have five or six fronts where none are clear, it’s a perfect storm to scare off investors. We need security, well-functioning institutions, and both the right and left to get their act together. We need fewer scandals, certainty in 'permisología,' faster procedures. Everyone must perform better—a more efficient State. This combination is preventing us from being attractive enough to investors.

Q. Foreign investment figures haven’t been negative in recent years.

A. They haven’t been negative, but they’re mostly concentrated in two sectors: mining and energy. Chile must develop more knowledge and productive skills in many sectors. Energy is essential for the country’s development, but we have a major transmission problem, and natural disasters also affect distribution. Copper is very important too, but production must diversify. We’ve fallen behind in lithium. The forestry industry is a prime example—one where investment hasn’t been possible in recent years. Afforestation has declined. We must foster an ecosystem of entrepreneurship and economic growth. And we need to grow faster; we’re at very mediocre growth rates.

Source:El País