After consolidating ‘Pulp Valley’ in Brazil, Mato Grosso do Sul government aims to attract tissue industry

Read our exclusive interview with Eduardo Riedel, Governor of Mato Grosso do Sul and Jaime Verruck, Secretary of the environment, development, science, technology and innovation of Mato Grosso do Sul.

Mato Grosso do Sul (MS) state, located in Midwest Brazil, has established itself as the largest pulp-producing region in the country and is largely known as the ‘Pulp Valley,’ but according to governor Eduardo Riedel, future growth related to the sector also targets other grades, such as tissue production.

“It is crucial for us to pursue this industrialization based on our production base. Instead of selling wood as a raw material, we now produce pulp and we can move on to derivatives. We are advancing in creating a network that attracts companies focused on innovation, science and technology, developing society as a whole,” the governor said in a exclusive interview with Fastmarkets.

With the start-up of Suzano’s Cerrado project in July, MS reached an installed capacity of 7.5 million tonnes per year of bleached eucalyptus kraft (BEK) pulp in 2024. Announced projects from Arauco and Bracell aim to boost that number before the end of this decade.

Riedel added that the state has a potential portfolio of investments of 70 billion Reais ($12.7 billion) for pulp alone – also including the long-awaited expansion of Eldorado, blocked for years due to the arbitration process between its current owners.

According to the governor, integrating the forestry industry and advancing industrialization is a very important strategic step for the region. The government projects an average annual GDP growth of 4.3% through 2028, reflecting improvements in the primary and secondary sectors of the economy.

According to Fastmarkets’ projections, Brazil consumes around 1.49 million tonnes of these products annually, equivalent to 6.54 kg per capita of tissue paper. The potential growth is significant, as neighbouring countries like Chile and Argentina present higher consumption rates. For reference, a resident of the US consumes an average of 24 kg of tissue paper per year.

In the same interview, Jaime Verruck, Secretary of the Environment, Development, Science, Technology and Innovation of Mato Grosso do Sul – who is directly involved in negotiations with businesspeople and forestry industry representatives – said that the government has recently met with several companies from the tissue sector and has been in constant dialogue with these companies about the potential to set up new tissue factories in the region.

These discussions are still in the early stages and are confidential, Verruck said, so he could not share more information about the specific companies that are engaged in these talks.

But he noted that business representatives showed a positive attitude and interest during the negotiations with the government.

“We are working hard to attract tissue paper companies with a focus on advancing the industrialization process of our state, using our raw material, which is pulp,” Verruck said.

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