Paracel to build new pulp mill in Paraguay

Paracel, a JV company with the participation of Copetrol's owner family Zapag and Sweden's Girindus Investments, is planning to build Paraguay's first pulp mill near the city of Concepción. Groundwork for the BEK pulp mill and other preparatory work, including plantations development, are currently being undertaken.The Paracel pulp mill is scheduled for start-up at the end of 2024, or the beginning of 2025. The company will also produce energy from biomass and sell it to the national grid.

The Paracel pulp mill will run a single fibre line and is designed for a maximum production capacity of 1.8 million t of bleached eucalyptus kraft (BEK) pulp. In the initial phase, Paracel will target a production capacity of 1.5 million tpy of BEK pulp. The mill's equipment also allows for the production of dissolving pulp (DP) from eucalyptus fibre, depending on the market conditions. Paracel puts the DP production capacity at 900,000 tpy. The company is reportedly in the final negotiations with the equipment suppliers.

Paracel also plans to produce energy from biomass and feed up to 130 MW in excess energy into the national grid. The government has recently granted Paracel the first independent energy production and transportation licence, making it the first private company in Paraguay to have these rights.

According to project documenation, besides the greenfield pulp mill and the biomass boiler the project also includes 188 ha of eucalyptus plantations, an electrical substation, transmission line, and a river port. Once operational Paracel will require up to 6 million m³ of fibrewood. In the initial few years, Paracel plans to cover its wood consumption from external suppliers, for the most part from Brazil, and to a lesser extend from Argentina and Paraguay.

Paracel has already completed the necessary permitting process. The environmental permit for the pulp mill and the river port was issued in February 2021.

Girindus Investments puts the mill capex at $2.5-3bn. The Inter-American Development Bank (IDB) estimates the total project cost, including mill capex, forestry, and financing costs at $3.6bn, which is "expected to be financed with a combination of equity and long-term debt," the IDB writes.

Girindus Investments, a Swedish investment company with a focus on forestry, pulp and biomaterials industries, says it is the third largest shareholder in Paracel. Zapag family, the owners of Paraguay's leading fuel distributor Copetroil, is the largest owner of Paracel. The second largest shareholder in Paracel is an "European strategic" which is soon to be disclosed, Girindus management told EUWID.

- Ad -
- Ad -