News

The "Complex Present" and "Promising Future" of CMPC Warned by its Chairman, Bernardo Larraín

Sponsors

The main growth focus for Empresas CMPC is in Brazil. In that country, in the state of Rio Grande do Sul, the Paper Company plans to invest US$ 4.6 billion in a new Natureza pulp plant.

The final approval for that initiative will be decided by the company's board —linked to the Matte group— in the first half of 2026, once certain permits are already advanced.

To finance that investment in Brazil, CMPC —linked to the Matte group— plans to sell land, wind projects, and "monetize" its forests in Chile or abroad. That is, to hand over to third parties, such as investment funds, a certain stock of forest mass for a period, until the trees are consumed. Just in this last item, it could raise between US$ 1 billion and US$ 1.5 billion.

Bernardo Larraín Matte, chairman of Empresas CMPC, presented yesterday at the firm's Investor Day, where he detailed the situation this company is going through, which recorded a 65.8% drop in its accumulated profit for the third quarter, totaling US$ 164.47 million.

He stated they face a "complex present" in the pulp markets —affected by lower prices— and tissue, but also highlighted that they foresee a "promising future."

Complications

Larraín explained that China's role is relevant, considering that in the last decade 70% of the increase in pulp demand came from that country. "However, China's lower economic growth has generated a large overcapacity in paper production in that country, and since pulp is the main input in paper production, it has put pressure on pulp prices."

Likewise, he indicated that lower Chinese activity has weakened the real estate and construction sectors, the main consumers of wood. This has greater availability at a lower cost, he added.

Regarding the tissue market, he stated that it "is also challenged." This is due to overcapacity in production in Mexico and Brazil, in both cases, of about 400,000 tons. In the Aztec market, this is due to a stagnation in consumption, related to "lower economic growth and a more impoverished consumer," where the decline in remittances from Mexicans abroad has an impact.

To the above, he added that the tissue sector is being impacted by imports from China of personal care products, such as diapers and feminine towels. Likewise, he commented that the economic situation has allowed the emergence of "private labels" from supermarkets, for example.

Optimistic Outlook

"This complex context does not prevent us at all from being able to project a very promising future," affirmed Larraín. This is supported by measures at the company at the organizational and financial level, but also by analyzing market prospects. In that sense, he alluded to the potential growth in demand for tissue products in Latin America, where per capita consumption is still low compared to Europe and the United States.

He added that another positive factor is the demand for biodegradable packaging products and cardboard containers for e-commerce. He also maintained that "we have seen that India has gigantic potential as a consumer of pulp."

Progress in Brazil

The chairman of CMPC pointed out that the main forestry companies "are anchoring their growth in Brazil." In that sense, he recalled that the Paper Company arrived in that nation in 2009 and has invested about US$ 5 billion in the pulp industry, where the Guaiba plant in the state of Rio Grande do Sul stands out.

In that same area, the company hopes to materialize its "second phase of growth" in Brazil, assured Larraín. This, with the development of the 2.5 million-ton Natureza initiative. Although the final approval from the board is still pending, the company's chairman stated that "this project has already begun." He indicated that "we have 116,000 hectares, of which 85,000 are planted, which allow us to supply Natureza in the first five years of operation." He added that they have invested US$ 372 million in this.

The company highlights the productive qualities of the lands in Rio Grande do Sul, due to its rainy climate, and the proximity to the coast and the future port being developed by the firm.

The general manager of Empresas CMPC, Francisco Ruiz-Tagle, and Sebastián Moraga, vice president of Finance, Administration and Technology of the company, spoke with the press yesterday and ruled out the option of also selling industrial assets in Chile.

"We are fully committed to investments in Chile. US$ 300 million is invested per year in Chile and that number is not going to change significantly. Chilean forestry development continues, and also, eventually, modernizations, like the ones we have been doing at the Laja pulp plant," highlighted Ruiz-Tagle.

Source:El Mercurio