Fibria could invest up to 15B Brazilian reais to boost pulp capacity, aims to achieve 10 million tonnes/year of pulp capacity by 2025 from current 5.25 million tonnes, cut production of non-pulp products
July 1, 2011
– Fibria Celulose SA may invest up to 15 billion Brazilian reais (US$9.6 billion) to increase its total pulp capacity, said CEO Marcelo Castelli, who announced a goal of achieving 10 million tonnes per year in pulp capacity by 2025 from the current 5.25 million tonnes, reported MarketWatch on July 1.
Fibria also plans to reduce production for other non-pulp products, he said, cutting the company's manufacturing of paper.
Fibria plans to finance half of the project with cash and the remaining with funds from the selling of debt, said Castelli.
Yet, the amounts rely on exchange rates and capital costs, Castelli said, adding that the exchange rate is based on the U.S. economy’s performance.
Brazil's currency is up to 1.55 Brazilian real per dollar, though the company has been working with a 1.6 real exchange rate. Castelli said the company needs to reduce costs to stay competitive, reported MarketWatch.
The primary source of this article is MarketWatch, New York, New York, on July 1, 2011.