If you knock on wood, Arauco will knock back. Forestry enterprise Celulosa Arauco y Constitución operates a group of companies known as Arauco. It lays claim to being Latin America's largest timber plantation owner and Chile's largest exporter of timber products. It also has operations in Argentina, Brazil, and Uruguay, with land holdings totaling some 1.5 billion hectares. Founded in 1979, Arauco has four business segments: woodpulp, panels, sawntimber, and forestry. It produces wood products including sawn timber, particle board, and plywood from six pulpmills, 14 sawmills, and eight fiberboard and plywood mills. COPEC owns nearly 100% of the shares of Celulosa Arauco y Constitución.
Arauco sells its products in more than 70 countries around the world. Export sales account for about three-fourths of the group's sales revenues. About half of its exports are sold to customers in Asia; the company also sells to customers in Europe and in other nations in the Americas.
A decrease in demand for timber products in 2008 forced Arauco to temporarily close four sawmills that year. However, the company also is looking to the future by expanding its productivity and efficiency. It is expanding a sawmill and panel plant and building a new biomass cogeneration power plant to provide electricity and steam.
Over the past several years Arauco also has been plagued with environmental problems at several of its operations in Chile. It has had to close mills and is facing charges of environmental damage by the government there. Arauco has been trying to clean up its act, and in 2007 signed clean production agreements with about a dozen other South American board and veneer manufacturers.
In 2007 the company acquired interests in the Brazilian forestry assets of Finish producer Stora Enso Oyj. The two companies teamed up in 2009 to buy the Uruguyan assets of Spanish pulp producer Grupo ENCE. The deal -- with a cost of about $344 million -- includes 130,000 hectares of land, industrial sites, and other assets, and provides a strategic supply of raw materials in the region. – less