Chile Arauco gets OK for expansion to boost wood pulp production

SANTIAGO Thu Feb 6, 2014 11:28am EST

SANTIAGO Feb 6 (Reuters) - Chile's Celulosa Arauco y Constitucion is looking to boost its wood pulp production by over 40 percent with a recently approved $2.1 billion expansion project, the company said on Thursday.

The company's Arauco mill in southern Chile will see overall production jump to 2.1 million tonnes once the expansion, which environmental authorities approved on Wednesday, is complete.

The project, called the Proyecto ModernizaciĆ³n y AmpliaciĆ³n Planta Arauco (MAPA), involves the suspension of Arauco mill's 280,000 tonne eucalyptus production line, a modernization of the 506,000 tonne pine line, and the construction of a third 1.56 million tonne line.

"Today Arauco's (wood pulp) production is 3.15 million tonnes per year and MAPA will add a net 1.3 million tonnes," the company said, but did not provide a time frame for completion of the expansion.

Arauco, the wood pulp and forestry arm of industrial conglomerate Empresas Copec, has been pumping cash into expansion projects and acquisitions in Brazil, Canada, Chile, the United States and Uruguay.

The $2 billion Montes de Plata eucalyptus pulp mill in Uruguay, a joint-venture between Arauco and Stora Enso , is due to start production this year.