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Arauco's softwood pulp mill in Argentina has seen many changes since the Chilean company took over. But there may be more to come
By Rita Pappens
Playing away at Alto Parana
Change is something that the employees at the Alto Parana mill are well used to by now. Since Arauco snapped up the bleached softwood kraft pulp mill in 1996, Alto Parana has been treated to a number of makeovers to improve productivity and output at the mill. The site is also being developed to incorporate a sawmill and, possibly, a new medium density fiberboard (MDF) plant. On top of that, a second new pulp line is being mooted for the mill in the long term.
Despite these changes, the mill's integration into Arauco has proceeded "smoothly", according to the Alto Parana team. Most of the people were kept in key positions at the mill, but they benefited from Arauco's forestry expertise, among other things. The two companies operate as separate units with their own management and sales goals, but they coordinate on larger issues. Arauco's long term aim is to develop its interests in Argentina using Alto Parana as a separate company.
As the only softwood pulp mill in Argentina, Arauco sees huge potential in its acquisition. The mill is located in Puerto Esperanza in Misiones state. With 1,200 km between the mill and the port, local transport has to be competitive. There are good road links in the region and ongoing dredging work on the upper Parana river will make the waterway navigable 24 hours/day in the future. This in turn will put pressure on road and rail costs and should play in the mill's economic favor.
The mill is near the Brazilian border and is, in fact, closer to Sao Paulo than Buenos Aires. It is no surprise, therefore, that 25% of Alto Parana's output heads for this vast neighboring market. Brazil is an important customer as the mill can often compensate for shortfalls in domestic paper production with export sales to Brazil.
Another quarter of the mill's output is consumed by the domestic market, but the lion's share is eaten up in Europe, with 45% of production heading for the region. The remainder is sold to South American countries among others. Alto Parana has consolidated its position as the leading softwood kraft supplier in the Mercosur area. The mill used to sell its pulp further afield in some Asian countries. But since Arauco took over, sales are focused on Latin America and Europe.
Parana plus
Since the end of last year, Alto Parana now has more pulp to sell than ever. In a year-long debottlenecking project, the mill successfully boosted pulp production from 270,000 tons/yr to 310,000 tons/yr. The $30 million project, known as APSA 300 to those who worked on it, also aimed to cut operating costs and lower the mill's environmental impact to a minimum. The main improvements included the installation of an oxygen-based delignification system, liquor clarifiers and evaporators. The capacity of the cooking, bleaching, recovery boiler and lime kiln areas have also been increased.
Kvaerner was one of the main suppliers for the rebuild, providing a new evaporation line and expanding the O stage of the bleaching process. Ahlstrom was also involved and supplied a new recausticizing unit.
As part of the project, water and chlorine dioxide usage was reduced, the quantity of organic solids in the liquid effluent was minimized and an extra treatment stage was added using activated sludge technology. The mill was already producing 100% elementary chlorine-free (ECF) pulp prior to the rebuild work.
As part of the Alto Parana deal, Arauco also found itself in charge of timberlands and plantations in Argentina. The Chilean company has so far been putting its forest resources to good use. The forest is mainly Taeda pine, with 10% Araucaria (Parana) pine. Araucaria has a slower growth rate than Taeda, which develops at 25-30 mÆ/ha/yr, but it is better for sawn timber and the company plans to continue planting this species.
Currently, some 70,000 ha have been planted and Arauco is planting 7,500 ha/yr with the aim of expanding its forest resources. The company also owns some eucalyptus grandis plantations, which grow at the same rates as their Brazilian neighbors. On top of that, the area has lot of mature forest and the company added to that last year with some 20-25 year old pine plantations.
One of the company's other recent investments has been focused on a $30 million sawmill. The plant will have a capacity of 240,000 mÆ/yr, built on a 13,000 mÅ area. The new unit will include medium and high temperature drying kilns and should have the capacity to dry 100% of the wood processed on-site. Startup is scheduled for March 2000. Further ahead, the company is also looking into investing in a medium density fiberboard (MDF) plant. Whichever way Arauco chooses to go, the company can count on its Argentinean employees to be ready for the changes if, and when, they come.
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