MethodologyContact usSupportLogin
On Wednesday December 20, Brazil’s largest packaging paper producer, Klabin, announced that it had purchased forest assets from Arauco for $1.16 billion.
The deal covers a total of 150,000 hectares, concentrated in Paraná state in southern Brazil, including 85,000 ha of pine and bleached eucalyptus kraft (BEK) plantations, along with 31.50 million tonnes of standing wood, forestry machinery and other equipment.
Klabin said the acquisition would allow it to achieve self-sufficiency in raw materials in the region, with two of the company’s largest industrial units, Puma and Monte Alegre, located nearby.
In a call with analysts, chief executive officer Cristiano Teixeira said the region was among the world’s leading areas in terms of forestry productivity.
“It will bring relevant gains for the company in terms of operations and logistics,” he said.
On December 23, Suzano announced the 1.825 billion ($370 million) purchase of Timber VII SPE and Timber XX SPE – companies managed by the BTG Pactual Timberland Investment Group.
The acquired companies own approximately 70,000 ha of land in the state of Mato Grosso do Sul, in midwest Brazil, with 50,000 ha of productive land, including eucalyptus plantations of varying ages.
Suzano said that the acquisition aligned with its strategy to create supply options for its business and to extend its self-sufficiency in terms of wood supplies.
Because of this transaction, Suzano said its capital expenditure for 2024 has been revised from 14.6 billion reais to 16.5 billion reais.
The Klabin and Suzano transactions are both subject to the usual regulatory approvals, including from Brazil’s antitrust authority, CADE.
At Fastmarkets’ Latin American Conference in August, the CEOs of large Brazilian producers anticipated that wood costs in the country would increase for a variety of reasons, with Suzano CEO Walter Schalka citing a rise in the number of pulp producers and the growth of new sectors demanding wood.
Schalka said at the time that land prices were experiencing “significant increases” in Mato Grosso do Sul and São Paulo states, which would “make it difficult for new projects because competitiveness [will be] lost.”
Pulp producers in Brazil face stiff competition for land from producers of agricultural crops, including soy and corn, for which the country is well known as a world-leading producer and exporter.
And some in regions of the country, such as the Midwest, large areas of land are set aside as pasture for beef production.
The development of new corn ethanol plants in Brazil also provides further competition for eucalyptus, which is used as a source of biomass to generate power at those facilities.
A single ethanol plant requires 50,000 ha of eucalyptus, Fastmarkets understands.
And, according to a report from the Brazilian Confederation of Agriculture & Livestock (CNA), using data from the National Union of Corn Ethanol, ethanol production should reach 6 billion liters in the 2023/2024 harvest, a 36% year-on-year increase and a rise of 800% over the past five years – mainly in Mato Grosso state, but also in Mato Grosso do Sul and Goiás.
Want to learn more about the forest products markets? We provide a range of market intelligence, including short-term and long-term forecasts, price data and market coverage to keep you one step ahead of the market. Speak to our team and find out more today.