Brazil – the world’s largest industrial eucalypt estate

There are 7 million ha of industrial quality planted forest in Brazil with almost 2 million ha of pine and 5 million ha of hardwood, principally eucalypts. This plantation base has formed the basis for most of the forest industry expansion. All of the pulp & paper plus all of the composite wood-based panel industry are based on plantation grown fibre. Although 5 -50 % of the lumber production is based upon native forest, it is the growth in pine lumber that has led to the growth in exports. The majority of the plywood (70%) is based on plantation pine and this segment has led to the growth in exports.

The eucalyptus plantations owned by the Brazilian pulp & paper industry (1.8 million ha.) represent the largest industrial eucalyptus plantation base in the world. These include plantations with the highest growth rates, following many years of genetic improvement work. Largely, due to this development, the Brazilian industry is the world’s low cost producer of bleached hardwood kraft pulp. RISI has forecasted that Brazilian pulp production will increase 42 % between 2010 (13 million tonnes) and 2016 to just over 20 million tonnes. This seems to be conservative as there are 4- 6 projects under advanced planning / development.

The Brazilian steel industry owns more than 1 million ha of eucalyptus plantations and likely will increase its’ holdings / supply contracts by just over 100 % to increase the plantation-based charcoal production as steel production is projected to grow by 40 %. The government is promoting the use of plantation based wood for charcoal to substitute for native forest conversion and the utilization of this wood for charcoal.

The growth rates for fast-growth eucalypts continue to accelerate. Brazil is the largest plantation hardwood (virtually all eucalyptus) base in the world. The average growth rate of 24m3/ha/yr (MAI) in 1980 has increased to a country average of 41 in 2010 for the pulp & paper / composite panel sectors managing plantations on a 7-year rotation. The expectation is that this average can be increased to an MAI of 50 for the future.

These averages vary by region and by company. Companies in the state of Parana report MAI averages for their new eucalypt plantations are in the range of 53, and Veracel in South Bahia in one of the best growing regions reportedly has MAI’s closer to 60 and anticipate an additional jump based upon their current research results. Most importantly, new hybrids are being developed for a wider range of growing conditions in one case E. urograndis is being crossed with globulus and dunnii or benthami/viminalis to provide a frost hardy hybrid for Santa Catarina State and a region in Central Parana where the elevation is 1000m and experiences winter frosts.

The eucalyptus saga has been an ongoing story for Brazil and the developing world. But there was little spill-over for softwood. Initially, the Brazilian foresters would plant a eucalypt plantation and a pine plantation on adjacent sites, as across a road, to watch the eucalypt grow twice as fast as the pine. They viewed this as a bit of a joke. But some foresters in Brazil and Uruguay suggested that some of the eucalypt research should be shared with pine as an under developed plantation opportunity. And by 2009, it was evident that Rigesa was investing in additional pine forestry improvements and reported a target of a 47 MAI for their best pine on a rotation of 16-17 years with further improvements anticipated, and sawlog arisings of 30-50%, depending upon market conditions.

For 2012, these trends continue for pine (both southern & tropical) as a fast growth option suitable for pulpwood, with sawlog arisings. Brazil has simply expanded its attractiveness as a low-cost fibre producer, to include softwood as well as hardwood. And for the developing world this can provide both pulp for tissue and fine paper as well pulp for softwood packaging papers. There are still some problems to resolve in terms of vegetative propagation: improved rooting for pine and better results for somatic embryogenesis. But there is a determination and the industry is weathervaning upon its’ current success. Experts believe that current technology will lift pine MAI to 60 but beyond this level it could require transgenics which would be a political battle for Brazil. Seemingly this eventuality can be deferred based upon the current successes for pine.

Already the largest South American integrated pulp & paper producer, the Klabin Group, has announced plans for a new 1.5 million tonne / year pulp mill complex in Parana State, with a flexible mill producing both pine (67%) and eucalyptus(33%) pulp which should come on-stream within the next 5 years. Most likely the project will include a modern packaging paper machine, associated with making TetraPak liquid packaging papers for export markets.

Futhermore, countries that subscribe to plantation forestry, but achieve lower levels of performance, can learn through exposure to Brazil how to “achieve improved performance” and can collaborate in deepening the forestry technology underway in Brazil with access to other LDC regions. To gain an insight into opportunities and progress being made by Brazilian forest products companies RH Donnelly & Associates are hosting two plantation forestry tours in Brazil in early 2013. Further information is available from rhdonely@xtra.co.nz.