Stora Enso pulp mill opens in Brazil - factory said to be most modern in world

Joint venture of Stora Enso and Aracruz makes pulp from eucalyptus

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Veracel, currently the world’s most modern pulp mill, began to produce pulp early this week in Brazil. The mill is owned jointly by the Finnish-Swedish Stora Enso and the Brazilian pulp manufacturer Aracruz.
      The Veracel mill cost 660 million euros to build. If the investments in roads, a port, and forests are included, the value of the project rises to around one billion euros. The project represents the first significant investment of the Finnish forest industry in South America.
      South America is currently a favourite target of investment by the pulp and paper industry; Metsä-Botnia, a joint venture of UPM and Metsäliitto, began construction on a pulp mill in Uruguay just a few weeks ago. The mill of Metsä-Botnia will be slightly larger than Veracel, and it will begin production in just over two years.
     
Veracel CEO Vitor Costa estimates that the investments of Stora Enso and Aracruz will be recovered in five to seven years. If Costa’s assessment is correct, he will head the world’s most profitable pulp mill. No other units of Stora Enso manage similar gross margins, and Aracruz has also been extremely profitable.
      Veracel receives its raw material from the eucalyptus plantations growing right next to the mill. Eucalyptus trees are ready for felling seven years after planting. Veracel will produce nearly one million tons of pulp annually, with 250 truckloads of wood delivered each day.
      Eighty percent of the raw material will come from the company’s own forests.
      Veracel’s most important Finnish customer is the Oulu plant of Stora Enso, which manufactures fine paper from pulp. Aracruz will sell the pulp to American toilet tissue manufacturers.
     
According to project head Jorma Kangas, there is no significant difference between Veracel and other pulp mills constructed over the past few years. The machinery is increasingly massive, and there is plenty of information technology.
      "I have been most amazed by the number of construction workers, because there were 8,000 of them during the most intensive phase. In Finland an equivalent facility would have been built with a couple of thousand men", Kangas observes.
      The construction workers lived in villages of barracks near the mill. "It was quite an operation to house and entertain them. We had the world’s largest restaurant, among other things."


Links:
  Stora Enso website

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