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Forestal Arauco achieves good results thanks to cellulose

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The subsidiary of Empresas Copec, Arauco, reports a radical shift in its finances, moving from significant losses to substantial profits, with cellulose as the main driver.

The company Forestal Arauco, part of the Chilean conglomerate Empresas Copec and the Angelini group, has experienced a remarkable turnaround in its financial performance. After facing a period of losses, the company announced profits of US$371.5 million at the close of the third quarter, in contrast to losses of US$274.4 million in the same period in 2023. This positive result is mainly attributed to the increase in cellulose prices, a key resource in the paper and textile industries.

Arauco's total revenues reached US$4.884 billion in the first nine months of the year, surpassing the US$4.443 billion recorded in 2023. Cellulose has been the engine of this growth, with a 16% increase in third-quarter revenue compared to the previous year. Despite a decline in sales volume, the rise in selling prices has offset this drop. In the year-to-date, revenue as of September 2024 was 30% higher than the same period the previous year, reaching US$2.558 billion, thanks to higher volume and selling prices.

However, the company has pointed out that the third quarter presented challenges, with a decrease in cellulose demand and an increase in supply in certain markets due to new production capacities. This has led to a significant rise in global inventories of short-fiber and long-fiber pulp.

Regarding the sawn timber business, Arauco has faced a decline in sales both in the year-to-date and in the third quarter of 2024. The situation has been affected by the closure of two sawmills in Chile, related to supply issues. These closures have had a direct impact on revenue since the third quarter of the year, as the two sawmills together accounted for approximately 25% of the company's total sawn timber production.

Despite challenges in some segments, the notable improvement in Forestal Arauco's financial results highlights the importance of cellulose as a strategic product in the global market and the company's ability to adapt to market fluctuations.