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Arauco Drives $4.6 Billion Pulp Megaproject in Brazil

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• In contrast to the challenges in Chile, Arauco is advancing with the largest Chilean overseas investment for a pulp plant in Mato Grosso do Sul.

The forestry company Arauco, part of the Angelini Group, has taken a significant step in its international expansion with the approval of the Sucuriú Project in Brazil, marking a milestone in the company's history and Chilean foreign investment.

The new pulp plant, to be located in the town of Inocência, Mato Grosso do Sul state, represents an estimated investment of $4.6 billion and promises to be an engine of economic and social development for the region.

The Sucuriú Project is notable not only for its financial scale but also for its production capacity, estimated at 3.5 million tons of pulp per year. Additionally, the plant will be self-sufficient in electricity and generate a surplus of approximately 220 megawatts of renewable energy from forest biomass—enough to power a city of over 800,000 inhabitants.

While Chile's forestry industry faces challenges such as wildfires, theft, land invasions, and insecurity—leading to stagnation and sector retreat—Brazil offers a more favorable investment climate and abundant raw material availability. This contrast has motivated Arauco to focus on its neighboring country, where land clearing has already begun to prepare the construction site, with operations expected to start in the last quarter of 2027.

The investment will be financed through a mix of debt, a capital increase, and internal resources. Arauco has called an extraordinary shareholders' meeting to discuss a capitalization of up to $1.2 billion. Finnish company Valmet has been selected as the main technology and equipment supplier, ensuring the Sucuriú Project will feature cutting-edge automation and environmental efficiency.

The project will create around 14,000 jobs at peak construction, offering social and economic development opportunities for the region. Mato Grosso do Sul Governor Eduardo Riedel has highlighted Arauco's commitment to the state and the plant's significance as a milestone in local growth and strengthening.

CMPC, another Chilean forestry giant, has also made significant investments in Brazil, with over $6 billion disbursed since its arrival in 2009. Competition in pulp, tissue, and biopackaging markets is intense, and CMPC is evaluating an expansion plan in Rio Grande do Sul, Brazil, worth more than $4.5 billion.