Subject category:
Strategy and General Management
Published by:
Harvard Business Publishing
Version: 25 March 2009
Revision date: 31-Jan-2025
Length: 34 pages
Data source: Field research
Notes: To maximise their effectiveness, colour items should be printed in colour.
Abstract
Celulosa Arauco is a major Chilean producer of market pulp and wood products. Owning over 1.2 million hectares of forest in Chile, Argentina, and Uruguay, the company's key advantage is the ideal growing conditions in which the company's forests are located. As of early 2004, Arauco is the third largest producer of market pulp (pulp sold on the open market) and is considering increasing its capacity, tying it with Brazilian competitor Aracruz as the world's largest producer. The first phase of the project has been approved by the board of directors and includes a sawmill, plywood mill, and energy complex valued at USD120 million. Now, Alejandro Perez, Arauco's president and CEO, is seeking approval for the second phase of the project, which would include the company's sixth market pulp plant at a cost of USD1.2 billion. Perez's concerns about the volatility of market prices for the past three years led the company to diversify into wood products like panels, medium-density fiberboard, and other remanufactured wood products. These divisions are highly successful and currently account for approximately 50% of Arauco's revenues. Perez is debating whether the company and its shareholders would be better served by a forward integration into the paper business instead of increasing the company's capacity in market pulp.
Industry:
Size:
USD1.5 billion revenues, 4,000 employees
Other setting(s):
2004
Subject category:
Strategy and General Management
Published by:
Harvard Business Publishing
Version: 30 March 2010
Length: 20 pages
Data source: Field research
Spanish language
Subject category:
Strategy and General Management
Published by:
Harvard Business Publishing
Version: 25 March 2009
Revision date: 30-Nov-2020
Length: 42 pages
Data source: Field research
Notes: To maximise their effectiveness, colour items should be printed in colour.
Subject category:
Strategy and General Management
Published by:
Harvard Business Publishing
Version: 10 September 2009
Length: 7 pages
Data source: Field research
About
Abstract
Celulosa Arauco is a major Chilean producer of market pulp and wood products. Owning over 1.2 million hectares of forest in Chile, Argentina, and Uruguay, the company's key advantage is the ideal growing conditions in which the company's forests are located. As of early 2004, Arauco is the third largest producer of market pulp (pulp sold on the open market) and is considering increasing its capacity, tying it with Brazilian competitor Aracruz as the world's largest producer. The first phase of the project has been approved by the board of directors and includes a sawmill, plywood mill, and energy complex valued at USD120 million. Now, Alejandro Perez, Arauco's president and CEO, is seeking approval for the second phase of the project, which would include the company's sixth market pulp plant at a cost of USD1.2 billion. Perez's concerns about the volatility of market prices for the past three years led the company to diversify into wood products like panels, medium-density fiberboard, and other remanufactured wood products. These divisions are highly successful and currently account for approximately 50% of Arauco's revenues. Perez is debating whether the company and its shareholders would be better served by a forward integration into the paper business instead of increasing the company's capacity in market pulp.
Settings
Industry:
Size:
USD1.5 billion revenues, 4,000 employees
Other setting(s):
2004
Related
Subject category:
Strategy and General Management
Published by:
Harvard Business Publishing
Version: 30 March 2010
Length: 20 pages
Data source: Field research
Subject category:
Strategy and General Management
Published by:
Harvard Business Publishing
Version: 25 March 2009
Revision date: 30-Nov-2020
Length: 42 pages
Data source: Field research
Notes: To maximise their effectiveness, colour items should be printed in colour.
Subject category:
Strategy and General Management
Published by:
Harvard Business Publishing
Version: 10 September 2009
Length: 7 pages
Data source: Field research