Image Credits crauco factory in Inocência will be built on the banks of the Sucuriú River - Photo: JP News / Archive : visual illustration for purpose
6 minutes read

Arauco anticipates investment of R$25 billion in Innocence

The early start of construction of the Arauco cellulose processing plant, in the municipality of Inocência – 333 km from Campo Grande – will also bring forward the investments of R$ 25 billion that the Chilean multinational foresees for the construction of line 1 of the plant.

The news, revealed yesterday by the Secretary of Environment, Development, Science, Technology and Innovation, Jaime Verruck, encourages economists and those who can benefit from the jobs that will be created in the municipality.

The expectation of analysts is that the generation of employment, with the early mobilization of the construction site, means that the city’s real estate sector and the services sector will be even more impacted.

The initial forecast was that works at Arauco would only begin in 2025, but the anticipation of the works is due, as Correio do Estado found , to a situation that involves at least two factors: the heating of the cellulose market and the completion of the Cerrado Project, the factory that Suzano has just completed in Ribas do Rio Pardo and which is the largest cellulose processing plant in the world and will be inaugurated this semester.

“The Installation License should be delivered to Chilean investors next Monday and earthmoving work will begin in August or September,” said secretary Jaime Verruck during a press conference this Monday (6) during the launch of the MS Day, an event that the Federation of Industries and the State government will promote in New York (USA).

The Arauco plant, the fourth in the cellulose sector in Mato Grosso do Sul, will be installed approximately 50 kilometers from the city of Inocência, on the banks of MS-377 and the Sucuriú River, the name given to the project in the State.

According to the official schedule, the industry should begin operations in the first quarter of 2028. Strong in the segment, the Chilean giant has in Mato Grosso do Sul, Mahal, a forestry company that has more than 60 thousand hectares of cultivated forests in six municipalities from the region: Inocência, Água Clara, Três Lagoas, Aparecida do Taboado, Selvíria and Chapadão do Sul.

Given the news, economists consulted by Correio do Estado project an immediate movement between the State’s economic sectors, which must now begin preparing to meet the large demands of the enterprise.

“In economic terms, the construction and operation of the plant represents an influx of investment in the state. This will not only boost the local economy through job creation and increased economic activity, but it can also attract other investments and companies related to the cellulose industry, creating a more robust and diversified value chain”, analyzes master in economics Lucas Mikael .

Doctor in administration Leandro Tortosa highlights that although this is a possibility, it is possible to analyze the context taking into account the movements occurring in Três Lagoas and Ribas do Rio Pardo, places that have already received or are in the implementation phase of similar mega-projects to that of Innocence.

“The real estate boom, characterized by the increase in demand for properties for rent and purchase, could be one of the first. This will boost the local real estate market, followed by an increase in commerce, with an increase in traffic in stores, restaurants and other commercial establishments and an expansion of the service sector, increasing demand for services such as transport, food and tourism”, lists Tortosa.

Economist Eduardo Matos adds that from a large investment, many others must be attracted, causing what is called a multiplier effect.

“This application does not only bear fruit when the factory starts operating, we know that at the time of its construction, it must attract workers responsible for building the structure and also workers from the company itself, responsible for monitoring the implementation”, he explains.
Therefore, Matos points out that the simple announcement of the start of works should attract entrepreneurs to the municipality of Inocência and the region, causing a positive impact even before the actual construction of the industrial plant.
CONSTRUCTION

One of the segments most impacted by the first phase is the civil construction sector, which, according to the forecast, at the peak of construction should generate an average of 12 thousand jobs. According to the latest IBGE data, Innocência has 8.4 thousand inhabitants. Therefore, during the construction period, the number of residents will increase by 150%.

In this sense, the president of the Housing Union of Mato Grosso do Sul (Secovi-MS), Geraldo Paiva states that the biggest effect will be on the demand for labor for construction.

Even with bottlenecks to be faced, such as the shortage of labor for the segment in the State, the president of the Civil Construction Industry Workers Union of Campo Grande (Sintracom), José Abelha Neto highlights that the effects will be positive.

“Construction in Mato Grosso do Sul is really in full swing and we know that we will have challenges with labor, but what I can say is that we must invest in improvement, training and so we can have sufficient labor in the State”, he concludes. Bee.

The president of the Intermunicipal Construction Industry Union of the State of Mato Grosso do Sul (Sinduscon-MS), Kleber Luiz Recalde, highlights the importance of the work in innocence and highlights that the sector has already been working to change the scenario and guarantee qualified labor .

“We are going to mobilize the sector and the production chain, public bodies to start a continuous training program, with a view to market needs”, he concludes.

SECOND PLAN

According to the original project, Arauco’s industry is expected to produce 2.5 million tons of cellulose, 1.5 million tons more than what is produced in Chile.

This would make Arauco the second largest plant in Mato Grosso do Sul (and Brazil), behind only the Suzano de Ribas do Rio Pardo unit (2.9 million tons/year).

After completion of the first part (building), there will be around 2,000 jobs for industrial and forestry operations.

To activate the factory, Arauco must look for leased or usufruct areas to cultivate around 400,000 hectares of eucalyptus forests.

By the end of 2023, 280 thousand hectares had already been secured and the forecast was to reach 320 thousand during this year.

Even before starting work on the first stage, Arauco’s management is already talking about doubling production capacity in a second phase.

If it chooses to build a second plant, Arauco will follow a similar path to that of other cellulose processing units in the State

CELLULOSE VALLEY

Currently, the State has an installed production capacity of 4.9 million tons of cellulose per year in the three lines that operate in the municipality of Três Lagoas, two from Suzano and one from Eldorado.

However, this total is expected to increase to more than 7.8 million tons with the entry into operation of Suzano’s Cerrado Project in Ribas do Rio Pardo, which is scheduled to open later this year.

Just last month, Eldorado Brasil Celulose announced that it should invest R$25 billion to build the factory in the municipality of Três Lagoas, in Mato Grosso do Sul, as the second production line. The expectation is to start the project “soon”.

The construction of the second factory in Três Lagoas was an old project aimed at strengthening Eldorado’s short fiber pulp production and is enough to increase the productive potential of the activity in the State.

2.5 MILLION TONS

Arauco’s 1st plant should have a production capacity of 2.5 million tons of cellulose. From 2030 onwards, it could double in size.

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