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EXPANSION OF PULP PRODUCTION IN THE THIRD WORLD

EXPANSION OF PULP PRODUCTION IN THE THIRD WORLD. William Ladrach Zobel Forestry Associates, Inc. zfaforestry.com. Allegheny SAF Meeting Roanoke, West Virginia February 16-18 2010. WOOD FURNISH FOR PULP MILLS.

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EXPANSION OF PULP PRODUCTION IN THE THIRD WORLD

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  1. EXPANSION OF PULP PRODUCTION IN THE THIRD WORLD William Ladrach Zobel Forestry Associates, Inc. zfaforestry.com AlleghenySAF Meeting Roanoke, West Virginia February 16-18 2010

  2. WOOD FURNISH FOR PULP MILLS Outside of North America and Eurasia, the great majority of pulp mills use plantation wood as furnish. Common plantation species used for pulp: Eucalyptus grandis, E. urophylla, E. globulus Clonal hybrids of Urograndis Acacia mangium, A. crassicarpa Pinus radiata, P. taeda, P. caribaea

  3. FAO 2005 PLANTATION SUMMARY

  4. According to PriceWaterhouse Coopers, the world average return on capital employed (ROCE) in forest lands was 4.8% in 2007. In Latin America, industrial forest lands continue to generate income with ROCE’s of 9.3% in 2006 and 7.8% in 2007, according to FAO.

  5. The US pulp and paper industry is largely composed of widely held companies listed on the stock market and must compete with other sectors (electronics, energy, transportation, pharmaceuticals, etc.) for investors’ dollars.

  6. The US pulp & paper industry has not been generating favorable returns on capital employed in timberlands and has largely divested itself of its forest lands, selling them to timber investment management organizations (TIMO), real estate investment trusts (REIT) and to a lesser degree to limited liability corporations (LLC) and limited partnerships (LP). Notable exceptions: Weyerhaeuser, (closely held public company), Simpson Timber (privately owned)

  7. WOOD PULPS & THEIR USES Kraft pulp: wood free pulp or free sheet (all lignin removed), used for fine papers, packaging Semi-chemical pulp: some lignin removed, used as corrugated mediumDissolving (sulfite) pulp, used for acetate, film, rayonGoundwood pulp (GW) wood is ground off of logs, used for newsprintPressure groundwood pulp (PGW) logs ground under pressure & steam, used for newsprintThermo-mechanical pulp (TMP) chips ground under pressure and superheated steam, used for newsprint, fiber board (hardboard, MDF) Chemi-thermo-mechanical pulp (CTMP), used like TMP (uses chips, superheated steam & some caustic soda)

  8. New pulp mills in Third World countries: Are predominantly kraft mills, producing wood free (lignin free) pulps. Produce short fiber chlorine-free bleached pulps from tropical plantation trees A few produce long fiber unbleached pulps in temperate regions using plantation pines

  9. PULP PRODUCTION BY COUNTRY Other countries

  10. BRAZIL Existing pulp capacity by state 2009

  11. BRAZIL

  12. RATIO OF KRAFT PULPS IN BRAZIL 2008

  13. BRAZIL New and planned pulp mills 1000 mt Murcuri

  14. BRAZIL ADVANTAGES Fast-growing tree species High level of forest research to improve tree growth and health Arable land available for more plantations at relatively low cost Trained & motivated work force Favorable wood transport systems

  15. BRAZIL ADVANTAGES University technical & professional support Close cooperation among companies, government, universities Strong economy National Bank for Social and Economic Development (BNDES) supplies financing for industrial development

  16. BRAZIL According to a report by Jakko Pöyry Oy and BRACELPA, the average yield of Brazilian industrial pulpwood plantations is: 40 m³/ha/year (8 cords/a/yr) for eucalypts on a 7-year rotation (double the growth in 1970) 30 m³/ha/year (6 cords/a/yr) for pines on a 15-year rotation. (The trees are measured over bark)

  17. BRAZIL To keep up with growing demands for wood products worldwide, Brazil’s current tree plantation area of 5.6 million ha (13.8 million acres) needs to be increased to 12.8 million ha (31.6 million acres) during the next 20 years for Brazil to maintain its relative market share in wood products sales.

  18. Harvesters produce 6 m (20’) debarked wood, over 100 trees/hr, 3 shifts/day, 6 days/week

  19. BRAZIL WOOD TRANSPORT Pine transport in Parana State (south)

  20. BRAZIL WOOD TRANSPORT

  21. Unloading tri-train at Aracruz mill, Espiritu Santo

  22. BRAZIL 2009 Fibria was formed by the merger of Votarantim Celulose e Papel and Aracruz Celulose Combined annual pulp production capacity is over 6 million tons, Fibria owns more than 1.3 million hectares of forest land

  23. CHILE Region 8 Region 9 Region 10 Chiloé Island

  24. CHILE 2008 2.14 million ha of tree plantations 1.5 million ha of radiata pine plantations 380,000 ha of eucalypt plantations 70% of the forest products are exported, represent 13% of national exports and reached US$5 billion in 2007, including US$1.6 billion in pulp and paper. Wood and paper products exports are second only to copper.

  25. CHILE Celulosa Arauco y Constitución (Arauco) has a combined annual pulp capacity of 2.2 million metric tons from its mills, four in Chile and one in Argentina. It owns a total of 850,000 ha of tree plantations in Chile, Argentina, Brazil and Uruguay. Arauco’s largest pulp mill is at Bío-Bío (Region 8), 858,000 tons of bleached long fiber pulp per year.

  26. CHILE Advantages Trained & motivated work force University technical & professional support Strong economy

  27. CHILE Challenges Lands in Regions 8, 9, 10 for radiata pine are occupied and the potential for expansion is limited. Chiloé island requires slower-growing Douglas-fir and cold-hardy N. Am. Pines Topography is rolling to steep, requires specialized harvesting equipment Chile has good forest fire organizations, but radiata pine is highly susceptible to fire damage. Truck haul capacity is limited by topography, roads.

  28. CHILE Specialized harvester tilts for operating on slopes

  29. CHILE Radiata pine, 22 years old, 100’ tall trees

  30. URUGUAYNew mills 1000 mt

  31. URUGUAY Plantations: Eucalyptus globulus, Eucalyptus dunnii Plantations are in northeast and in southwest

  32. URUGUAY

  33. URUGUAY Advantages Fast-growing tree species Arable land available for more plantations Wood available from Argentina across Uruguay River bridge at Concordia, through MERCOSUR agreements. NE plantations are adjacent to Brazil, wood could move to Rio Grande do Sul to new pulp mills.

  34. URUGUAY Challenges Road system mediocre. Poor transport from NE across Rio Negro & Lago de Rincon to Montevideo in South. Encroachment of plantations on cattle lands. Strong antagonism by Argentina to construction of Uruguayan mills on Uruguay River

  35. SOUTH AFRICA National pulp capacity 2.3 million mtyp Sappi mills over 1 million mtyp (ground wood & kraft pulp) at Ngodwana (Transvaal Prov.), Mondi 720,000 mtpy kraft mill at Richards Bay (Natal Prov.) 1.5 million ha of plantations, mainly Pinus patula,P. elliottii, P. radiata,Eucalyptus grandis and Acacia mearnsii. Most plantations are in East (Transvaal Prov.), Southeast (Natal Prov.) and South (Eastern Cape).

  36. SOUTH AFRICA

  37. SOUTH AFRICA Sappi owns 464,000 ha of plantations plus 75,000 ha in neighboring Swaziland. Mondi has 430.000 ha in plantations. 200,000 ha of new plantations are planned with additional 565,000 tons pulp capacity. The narrow gauge railroad is used for wood transport, allowing for a larger wood procurement area than with just trucks.

  38. SOUTH AFRICA Wood delivered to Sappi mill at Ngodwana by rail

  39. SOUTH AFRICA Mondi and Sappi are expanding plantations into Swaziland and possibly into Mozambique to the North. Mozambique has plans to establish up to seven million hectares of tree plantations. The increase in pulp capacity in Southern Africa will depend on increasing the tree plantation area.

  40. INDONESIA Installed pulp capacity is 5.3 million mtyp Plantations are primarily Acacia mangium Major mills are in Sumatra, one in Borneo Mill startup has been with natural mixed hardwoods as forests are cleared, then the sites planted with acacias.

  41. INDONESIA

  42. INDONESIA

  43. INDONESIA Challenges Financial difficulties, corruption (Kalimanis Group), national banks holding US$13 billion debt on failed forestry/pulp projects promoted with financial incentives Social antagonism to industry takeover and clearing of lands Resistance by environmentalist to land clearing and conversion to plantations

  44. INDONESIA Challenges Lack of trained manpower Lack of professional & technical personnel Lack of university technical support Lack of effective cooperation among companies, universities, government Lack of effective forest research Lack of good transport systems

  45. INDONESIA Challenges Effective % plantation area in Timber Estates (HTI) is low due to: Hilly land, organic soils (histosols), swamps Difficulties of adapting mechanized harvesting systems to terrain Growth rate for acacia plantations is relatively low, 20 m3/ha/yr (4 cords/a/yr)

  46. INDONESIA Felling short wood with chainsaws, hand debarking, shoulder transport of short wood to the road

  47. INDONESIA Improperly loaded truck, no binders on load. Labor adjusting wood standing on top of trucks

  48. INDONESIA Bi-train 12’ wide, 105 ton GVW on company road in Sumatra

  49. INDONESIA GVW 105 tons 11 axle bi-train in Sumatra Detail of 5th wheel connection

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