Paracel moves on with preparation steps for new BEK mill in Paraguay

SAO PAULO, 13 October 2020 (PPI Latin America) – Paraguay may be the next new source of bleached eucalyptus kraft (BEK) pulp in South America, as a project for a 1.5 million tonnes/yr mill in the country begins to take shape. After months of rumors, the company Paracel has begun to dialogue with local communities and requested an environmental license to operate from authorities, which is expected to be granted by the end of this year.

These preliminary steps are necessary in all projects of the kind and can take years, as well as the plantation of forests and preparation of the necessary financial structure. Up to the moment, Paracel is in preliminary stages of eucalyptus plantations, which in the future should total 135,000 ha, PPI Latin America learned during a public meeting promoted by the company on Oct. 7.

The company’s sustainability manager Cyro Croce stated that despite the small planted area at the moment, the company targets a startup in 2023, acquiring wood from third parties. “We are in the early stages of plantations in Paraguay and these forests will take about six years to mature, so the mill will use in the beginning wood from third parties. Part of that will probably come from imports, we imagine from Argentina and also Brazil,” the executive said, adding that the company expects to have forests at an average radius of 150km from the mill in the future.

When asked if the mill would be competitive in its initial years of operations acquiring wood from the market, Croce stated that the project is being prepared considering this equation, with state-of-the-art industrial operations and equipment to be self-sufficient in energy generation. The mill will be able to produce 220MW of energy, of which around 100MW are surplus.

Financial structure and funding for the project is expected to be concluded by February 2021, according to Paracel’s communications manager Latifi Chelala. “We are taking all preparatory steps for the project, talking to communities and opening to dialogue. The project will also seek all certifications it needs, including from the FSC,” she said. In its website, Paracel states that construction works should begin in the first half of 2021.

According to Chelala, the new mill site is situated along the Paraguay river. “It will be placed in the city of Concepción, in the left margin of Paraguay river and around 15km distant from the city downtown.”

In its logistics plan, Paracel also plans to build a river terminal next to the mill and export pulp from a port in Uruguay.

Paracel was founded in November of 2018 by Grupo Zapag and Girindus Investments. The first is a Paraguayan group focused on fuel distribution markets and owner of Copetrol Group, Paraguay’s leader in fuel import and distribution. Girindus is a Swedish family-owned company focused on investments in biodegradable and sustainable products.