According to Reuters, Chile's Empresas Copec Group recently announced that it has agreed to give part of its forestry business ** to Brazil's Klabin Pulp and Paper Company, with a transaction amount of about 5.8 billion reais (about 7.7 billion yuan).
Through its forestry subsidiary Arauco,** Copec said it will have forestry assets in the Brazilian state of Paraná, totaling about 150,000 hectares, of which about 56% are productive land.
Mr Klabin said the acquisition of the forestry asset would help it reduce costs and become self-sufficient, with the acquisition increasing its self-sufficiency ratio to about 75%.
It is reported that the deal was struck at a time when Copec has been facing declining earnings, and its statements posted a loss in the last quarter due to the region's impact on El Niño, which saw more extreme weather, causing its forestry operations to suffer from climate change such as floods, droughts and forest fires.
Copec said that this time** does not include its industrial assets related to Arauco's plank mill in Brazil, nor other forestry assets in the state of Mato Grasso do Sul. The final acquisition** is subject to regulatory approvals, including authorization from Brazil's antitrust regulator, CADE, and is subject to change based on factors such as the amount of timber at the time of closing. The transaction is expected to close in early 2024.
According to the preliminary estimates cited by COPEC, if the transaction is finally completed, it will generate about 1$300 million in positive impact.
Klabin updated its business outlook for the next two years based on the trading project, with capital expenditures to be reduced to R$3.3 billion by 2024 from R$4.5 billion previously**, due to lower purchases of forestry and stumpage timber. Capital expenditures in 2025 are expected to be R$3.1 billion.
With the integration of the project, Klabin expects annual capital expenditure to be reduced to R$2.5 billion from 2028. The company also expects total cash costs to be reduced, with savings of $3. per year from 2025 to 2028R$500 million to R$400 million.
Klabin is the largest producer and exporter of packaging paper in Brazil and an important producer in the manufacture of cardboard packaging.
Currently, Klabin has an annual production capacity of about 2.1 million tons of pulp and 1.6 million tons of commercial pulp. According to the data, the company's pulp sales in the third quarter of 2023 totaled 42At 60,000 tons, it is the second highest volume since the start of the Puma plant in the state of Paraná. In the first nine months of the year, Klabin's paper and packaging business grew 7% in adjusted EBITDA per tonne compared to the same period last year.
In September 2023, the Klabinpuma II project was inaugurated, the largest investment in the company's history, with an investment of R$12.9 billion to install two new paper machines, MP27 and MP28, both already in operation, with a total annual production capacity of 910,000 tons of paper. The MP28 also marks Klabin's debut in the white board market. The full operation of the two machines is expected to increase Klabin's annual paper and cellulose production capacity to 4.7 million tons.