Portucel Soporcel Group expected to focus on Brazil, Uruguay and Mozambique

26 August 2009

Lisbon, Portugal, 26 Aug – Portuguese pulp and paper group Portucel Soporcel is expected to follow its European counterparts and look to Brazil, Uruguay and Mozambique to set up factories, analysts cited by Portuguese news agency Lusa said.

This would be a long term project that aimed to boost Portucel Soporcel’s organic growth, as the group “has been analysing several alternatives for its international expansion,” in regions “where natural conditions provide high levels of forestry productivity.”

According to the analysts cited, large international groups have already opened the way for these types of investment, notably Swedish-Finnish group Stora-Enso, which shares the Veracel pulp factory in Brazil with Aracruz and recently, in consortium with Chile’s Arauco, acquired the forestry assets of Spain’s Ence in Uruguay (around 110,000 hectares).

“Portucel Soporcel is also studying alternative investment projects to set up tree planting units for pulp and make use of the faster growth of local eucalyptus trees, which lower production costs, practically to half of European costs,” one of the analysts said.

The analyst added that production in Latin America would mainly be for export, with part of it remaining in domestic markets, specifically exports to China “which does not have enough production of pulp to make the paper it needs.”

“The company’s good performance was based on diversification to other types of market, such as Eastern Europe, the Mediterranean basin, namely north Africa,” BPI analyst, José Rito told Lusa.

In the first half of this year, the group’s total sales rose 3.8 percent year on year, or an extra 20,000 tonnes, in contrast to a drop in the market. (macauhub)