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Forest Pole Project Pulp Plant

This project involves establishing an 800 million USD commercial forest and a 1.4 billion USD pulp plant in Ecuador. The pulp plant will produce 1 million metric tons per year of bleached hardwood kraft pulp from eucalyptus trees to supply export markets in Europe and Asia. The commercial forest will supply the necessary raw materials to the pulp plant. The project is expected to have an IRR of 11.28% for the forest and 10.43% for the plant, with an estimated recovery time of 10 years.

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44 views2 pages

Forest Pole Project Pulp Plant

This project involves establishing an 800 million USD commercial forest and a 1.4 billion USD pulp plant in Ecuador. The pulp plant will produce 1 million metric tons per year of bleached hardwood kraft pulp from eucalyptus trees to supply export markets in Europe and Asia. The commercial forest will supply the necessary raw materials to the pulp plant. The project is expected to have an IRR of 11.28% for the forest and 10.43% for the plant, with an estimated recovery time of 10 years.

Uploaded by

guarderasleal6358
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Forest Pole Project:

Pulp Plant / Commercial Forest

PROJECT INFORMATION

MARKET
INVESTMENT
• The plant’s production will be earmarked for exportation. The
Commercial forest:
global pulp market is 50MM TM with annual growth between 1
800 MM USD
and 2%; Europe and China are the main consumers
Pulp Plant: 1,400 MM USD
• Pulp importers: China 36%, Germany 8%, USA 7%, Italy 5%
Total: 2,200 MM USD
• Paper and cardboard importers: USA 11%, Germany 8%, UK 5%,
France 5% Leading country: Brazil leads short fiber (Eucalyptus)
production.
FINANCIAL INDICATORS
Demand:
• IRR Forest: 11.28%
• Regional trade balance: 2.9 billion USD. Wood pulp is the
• IRR Plant: 10.43%
product of greater export; and wrapping paper and cardboard
• Recovery time: 10 years
are the products mostly imported.

MANAGEMENT MODEL
• Reduction of 10% on the Income Tax rate on the
Private investment: the investor builds the plant and amount reinvested in productive assets
develops the forest for production inputs. • Exemption of Income Tax for 10 years for Basic
Industries
Benefits for the investor
Through the signing of an investment agreement
with the Ecuadorian government, recorded as a OBJECTIVE
public deed, reception of benefits are guaranteed.
• Stability on tax incentives up to 15 years, renewable Implement a pulp production plant 1MM TM/year
once (maximum validity 30 years) BHKP (Bleached Hardwood Kraft Pulp), from the tree
• The company may request total or partial species EUCALIPTUS UROGRANDIS through the
reduction of tariffs for any capital goods imported development of a commercial forest to supply the
• Exemption of foreign exchange taxes on financing raw material to the pulp plant, while it has a
operations potential exporter to Europe and Asia, to supply for
• Establishes conflict resolution mechanisms the domestic, regional and global market.
PROJECT DETAILS

The purpose is to promote the implementation of an industrial plant for the production of BHKP type pulp
(short fiber); this project is comprised of two components: the commercial forest that supplies raw material to
the pulp plant.

LOCATION

• Commercial forest: Esmeraldas, Santo Domingo, Manabí, Pichincha


• Pulp plant: the location of the plant is near the Blanco River (La Concordia Canton, province of Santo
Domingo de los Tsáchilas), which will supply the water necessary for its operation

TECHNICAL DESCRIPTION OF THE PROJECT

• Basic study of the Pulp and Paper industry in Ecuador


• Advisory Service for the Characterization of a Pulp and Paper Plant in Ecuador” - 2014, Bain & Company
• Study to determine the potential surface to establish forest plantations of tropical Eucalyptus as source of
raw material for the pulp and paper plant. The study was conducted by the Ministry of Agriculture, Livestock,
Aquaculture and Fisheries - 2016
• Basic study of the pulp plant optimized and the roadmap to develop the Forest Pole - 2017

REGULATORY FRAMEWORK

• Organic Law of Rural Land and Ancestral Territories


• Organic Code of Production, Trade and Investments (COPCI)
• Incentive Program for reforestation with commercial purposes - Ministerio de Agricultura y Ganadería

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