International Paper takeover paper project in Três Lagoas

International Paper (IP), the world's largest manufacturer of printing and writing papers, resumed studies for the implementation of a new machine in the plant of Três Lagoas (MS), with investment estimated at $ 300 million. The direction of the Brazilian operation, according to an industry source, is more optimistic about the expansion-these plans are public for more than three years. "The IP is again excited about the project," he said.
Technically tied with Brazil's Suzano Papel e Celulose in the position of largest manufacturer of printing and writing paper of the country (coated and uncoated) and leader in the segment of uncoated, IP operates very close to the capacity limit. Today, the American company can produce just over 1 million tons per year in three factories in Brazil-Três Lagoas, Mogi Guaçu (SP) and Luiz Antonio (SP)-and exports almost half of that volume, especially for the other countries of Latin America.
Technically tied with Brazil's Suzano Papel e Celulose in the position of largest manufacturer of printing and writing paper of the country (coated and uncoated) and leader in the segment of uncoated, IP operates very close to the capacity limit. Today, the American company can produce just over 1 million tons per year in three factories in Brazil-Três Lagoas, Mogi Guaçu (SP) and Luiz Antonio (SP)-and exports almost half of that volume, especially for the other countries of Latin America.
In 2012, as the Brazilian pulp and Paper Association (Bracelpa), installed in the country industry produced 2.635 million tons of printing and writing paper, of which 1.688 million tons intended for the domestic market. Other 661 thousand tons were imported to satisfy local consumption. Although it still represents a small market compared to Europe and the United States, the Brazil-in fact, the Latin America as a whole-and China, with great advantage over here, represent the only areas where there will be growth in the production of printing and writing in the next ten years, according to specialized consultancies.
The IP had already informed the plan to install a new paper machine in Mato Grosso do Sul and, originally, was expected to make the official announcement in early 2010. Faced with uncertainties about the global economy and the growth of the Latin American market, the President of IP to the AL, Jean-Michel Ribieras, reported in February of that year, the extension of the deadline for making a decision for up to two years. Since then, the company has said that the project follows.
In the meantime, the American competitor bought IP in packaging area Temple-Inland, in operation of $ 4.3 billion, and more recently invested $ 470 million in a joint venture with Jari, of Grupo Orsa, which marked its entry into the Brazilian market of packaging.
Now, according to the source, the American manufacturer resumed studies in the field of printing and writing with more depth, because we understand that the moment conducive to implementation of the new machine, with capacity for up to 250 thousand tons per year, considering current technology, may be approaching. In addition, the company has to take a decision on the project within a pre-agreed schedule with Fibria, which produces in Três Lagoas cellulose used in IP unit and agreed to extend the deadline for implementation of the new line, if that is the decision.
The contract for the supply of raw material, which lasts 90 years, predicts that the new paper machine should come into operation between the second quarter of 2016 and the second quarter of 2018. For the start-up of a project of this size you need at least two years in advance.
Sought, the IP responded in a statement that "continues the deployment, including studies with community consultation on possible environmental projects to be executed". The company reiterated that Brazil is seen as "growth platform in Latin America" and which "will consider aspects of paper demand and economic growth in the region for defining date for deployment of the machine".
The novelty that will be incorporated into the Três Lagoas mill, from the expansion, is the production of offset paper (for printing). Today, the unit is dedicated to printing and writing paper in A4 format. In 2012, the IP posted overall sales of $ 27.8 billion, with a high of 6.9% compared to the $ 26 billion recorded in the previous year. Only in the fourth quarter, worldwide sales of the multinational were $ 7.1 billion, compared to $ 6.4 billion in the same range of 2011.