Forest Products Industry

FSC is extending the suspension of the Asia Pulp and Paper (APP) Memorandum of Understanding (MoU) on the implementation of the FSC Remedy Framework until the end of June 2025.  Source: Timberbiz The extension of the suspension is due to a conflict of interest identified between Domtar and the law firm FSC identified for conducting the legal review of APP and Domtar’s corporate groups. FSC is identifying a different independent, third-party law firm to conduct this legal review. In January 2025, FSC suspended APP’s remedy MoU until the end of March 2025 because of the changes APP and Domtar announced regarding the concentration of sole beneficial ownership of the two corporate groups. FSC is commissioning a legal review of the corporate groups of Domtar and APP to better understand the implications and the effect of this change, and any impacts on the scope of the APP remedy process and the MoU. FSC disassociated from APP’s entire corporate group in 2007. To remedy the environmental and social harms APP caused in the past, FSC and APP signed a remedy MoU in 2024 to implement the FSC Remedy Framework. Earlier this year, Jackson Wijaya, the sole beneficial owner of Domtar (an FSC certificate holder), took over as APP’s sole beneficial owner.

In 2024, Brazil exported nearly 20 million metric tons (MT) of pulp, marking a 3% increase in volume compared to 2023 and a 34% rise in export value. Source: Timberbiz These numbers are expected to grow as planned pulp mill investments come to fruition. Some of these include: In December 2024, Suzano S.A. inaugurated the world’s largest single-line pulp mill in Ribas do Rio Pardo, Mato Grosso do Sul, which has an annual production capacity of 2.55 million MT. Chile’s Arauco is building a US$4.6 billion bleached eucalyptus market pulp mill that will be the world’s largest pulp mill project with 3.5 million MT/year capacity when it starts up in 2027. Dissolving pulp producer Bracell has earmarked US$4 billion to build a 2.8 million MT/year pulp mill in Água Clara. Competition for land in Brazil and investments in pulp production capacity have been key factors in rising log prices for the past two decades. However, Brazil’s pulp producers have the advantage of a huge and expanding planted forest resource to provide wood fibre. The country’s planted tree area has expanded to reach 10.2 million hectares, while protecting and expanding the wood fibre resources plays an important role in pulp producers’ investment decisions. Suzano’s R$22.2 billion Cerrado Project investment includes R$6.3 billion for timber plantations and logistics, while Klabin announced plans at the end of 2023 to purchase Arauco’s forestry assets in Paraná for US$1.16 billion. Brazil is the largest supplier of hardwood pulp to the US, and its pulp industry is waiting to see how it might be affected by the current US enthusiasm for tariffs. There has been some speculation that any increase in prices of Northern Bleached Softwood Kraft Pulp (NBSK) as tariffs hit Europe and Canada could push US tissue producers to switch to hardwood pulp, increasing business for Latin American producers. Brazil’s pulp industry is on a promising trajectory, fuelled by substantial investments in new pulp mills and the expansion of timber plantations. While challenges such as increasing log prices and land competition persist, Brazil’s extensive planted forest resources offer a significant competitive advantage. As the leading supplier of hardwood pulp to the US, Brazil stands to gain from potential shifts in global pulp demand. For further insights into Brazil’s pulp mill investments and wood fibre costs.