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Horizontal Expansion
1) Pulp and Market Pulp Industry
Products:
Pulp is attained from wood and, depending on the
type of tree that is used, it could be hardwood and
softwood pulp.
The primal is attained from eucalyptus tree, the
latter is attained by radiata pine tree.
Another thing to say is that pulp originally is
brown. Consequently there are two categories of
product, bleached pulp and unbleached pulp. The
primal is attained from chemical treatment, is
white and mainly used for paper manufacturing.
The latter, on the other hand, maintains its original
colour and its mainly used for brown paper bags.
Total Production:
The overall production of pulp amounts at 183
tons, 141 of these are produced by vertical
integrated firms and internally used in order to
produce paper. The remaining 42 tons, on the
other hand, are referred as market pulp and
represent the only commodity in the market.
(picture support)
pulp
market pulp
Source: HBS
Producers:
The sector is highly concentrated and, in fact, the
first 6 market pulp producers own 33% of the
market share.
5 of these 6 producers are located in the Americas,
Arauco is among these 6 and just one is located in
northern Europe. (picture support)
Weyerhaeser (US)
Aracruz (brazil)
Arauco (Chile)
Sdra (Sweden)
International Paper
(US)
Tembec (Can)
Other
Source: HBS
Consumers:
Regarding the consumers of market pulp, we have
identified the major consumer of paper in the
Source: HBS
Price:
Price in the sector turns to be volatile especially in
the hardwood sector due to the increasing capacity
in South America (picture support)
Source: FAO
2) Arauco
Production:
Our production of pulp includes both unbleached
and bleached market pulp.
In the primal market we detain the leadership
owning, alone, the 15,8% of the market share. In
the latter market were the third global producers
owning 5,47% of the market share and producing
2,3 million pulp tons.
We own 5 pulp mills 4 located in Chile and 1
located in Argentina, here you can find the
respective capacity of each mill. (Picture support).
Source: HBS
We think that well increase our export sales in the
future thanks to the free trade agreement
achieved by Chile government that allows us to
trade freely with Europe from 2002 and with US
from 2003.
3) Our project for Horizontal Expansion
The Nueva Aldea project consists of three
phases.
Two of these three phases have already been
Vertical Integration
To better present this second alternative we have
decided first to focus on the analysis of the sector
in which we decide to move .
1) Paper and Pulp Industry