News
Banks finance Veracel pulp project - 12.19.03
The National Economic and Social Development Bank (BNDES), the European Investment Bank (EIB) and the Nordic Investment Bank (NIB) have approved financing totaling US$ 640 million for a project to build a pulp mill in the south of Bahia. The BNDES will finance US$ 495 million, the NIB will finance US$ 70 million and the EIB's portion is US$ 80 million. The project's total investment is US$ 1.25 billion. The rest of the funding will come from Veracel's shareholders, Aracruz Celulose of Brazil and StoraEnso of Sweden-Finland.
Construction of the new mill has already begun. It is located on a 1.5 million square hectare site straddling the municipalities of Eunápolis and Belmonte. During construction, some 12,000 direct and indirect jobs will be generated. Currently, between direct and indirect jobs, the company has about 4,000 employees in the region. During the operating phase, to begin in the middle of 2005, up to 10,000 direct and indirect jobs will be created.
The future Veracel mill, which will be the largest single line unit in the world, will have installed capacity to produce 900,000 tons of bleached eucalyptus pulp per year, from its own forest plantations. The company currently owns 68,000 hectares of eucalyptus plantations and has been working with third-party growers for the cultivation of another 23,000 hectares in a partnership program. Practically all of the production from the Veracel mill will be destined for the international market, generating foreign exchange earnings of some US$ 500 million per year for Brazil.
The installation of the mill will contribute to the consolidation of Brazil as an important competitor among the largest pulp exporters. The country currently is in third place in the world production of pulp, behind only Canada and the United States. Between January and September of 2003, Brazil exported 3 million tons of short fiber pulp, representing an increase of 26.2% compared to the same period in 2002.