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Aracruz and Stora Enso announce decision to build Veracel pulp mill - 05.08.03
Aracruz Celulose S.A. and Stora Enso Oyj have taken the decision to go ahead with the construction of a 900,000 tonnes per year eucalyptus pulp mill for Veracel Celulose S.A. in Eunápolis in the state of Bahia, Brazil. Each party owns a 50% stake in the project. Shareholders’ representatives announced the decision on May 8 in Brasília to President Luiz Inácio Lula da Silva.
The investment decision came in the wake of favorable technical and economic feasibility studies. The mill will be one of the largest single-line bleached eucalyptus pulp facilities in the world. The entire Veracel project is budgeted at US$1.25 billion, of which US$300 million have already been invested in forestry related activities and construction of infrastructure, mainly roads and a specialized harbor.
The project is expected to be financed by 45% equity and 55% loans from Brazilian and international development agencies.
Earthwork for construction of the mill will begin in June 2003 and start-up of the new unit is expected to take place in 2005. It will have about 60% of local content in the supply of services and equipments. In the peak of construction, some 12,000 jobs will be created. When the mill enters into operation, there will be 2,000 direct jobs and some 8,000 indirect jobs. The mill will incorporate state-of the art process equipment, fully automated process control systems and advanced environmental protection installations.
According to Carlos Aguiar, Aracruz’s president and CEO, “the Veracel investment is in line with our growth strategy, and will bring about important social and environmental gains to the region together with the generation of economic wealth and hard currency reserves for the country”.
Facts and background information about Veracel
Veracel has 70,000 hectares of privately owned eucalyptus plantations, interspersed with 71,000 hectares of native forest reserves, also owned by Veracel, of which 6,000 hectares in the Veracel Station, hat has been inscribed by UNESCO in the World Heritage List as part of the Brazilian Discovery Coast Atlantic Forest Reserves.
All of Veracel’s pulp production will be based exclusively on sustainably managed own eucalyptus plantations. Wood from native forests will not be used in the pulp making process nor for any other purpose, but preserved for ensuring a balanced ecosystem in the planting regions.
Veracel plantations provide competitive wood costs through a combination of high yield per hectare, suitable land structure and superior logistic position. Eucalyptus is a fast growth tree species; the logs are ready to be harvested in seven years.