Chilean woodchip exports: maybe not down for long?

SEATTLE, WA, Mär. 23, 2010 (RISI) - In the past several weeks since the devastating earthquake in Chile, I have told numerous friends that I believe the world will be surprised at how quickly Chileans tackle the clean-up and rebuilding of their country. I've been following Chile's forest industry for 20 years now, and if there is one word that summarizes the Chilean foresters and forest industry executives I have known, it is "competent." Their positive attitude and strong record of accomplishments has led me to expect a lot from them, but at the International Pulpwood Conference in Sao Paulo, Brazil last week I heard a story from Chilean woodchip exporters that surprised even me.

As the conference began on March 16, there was much speculation among woodchip exporters from Australia, South Africa, Brazil, etc. about how much of an impact the earthquake would have on the international chip markets in 2010. You have to understand that Chile was the second largest supplier of hardwood chips to the international markets in 2009 (after Australia), and was the leading supplier of plantation-grown hardwood chips. The epicenter of the earthquake was just west of the city of Talca, in Region VII, and the two closest woodchip loading ports, at San Vicente and Coronel, were rumored to be seriously damaged. In 2009, 41% of Chile's hardwood chip exports were loaded in Coronel and 13% in San Vicente, so trying to estimate when these ports might start loading woodchips again became an important guessing game amongst Chile's competition in the woodchip business.

By all accounts, damage to Chile's port infrastructure and transport sector was quite serious. Adding to the tragedy, the Chilean government delayed sending in the army to maintain order for several days, and chaos quickly developed. Communication with the area around Concepcíon was impossible for days, and most workers reportedly stayed home for at least a week to guard their homes. At the port of Talcahuano, near Concepcion, three of the terminals collapsed and were totally submerged, and repair costs (essentially a rebuilding of the wiped-out port) have been estimated at US$100 million. So most of us at the conference in Sao Paulo were absolutely stunned to learn that one company, Comaco S.A., had already loaded a full woodchip carrier at San Vicente International Terminal (SVTI) following the earthquake, and the vessel had set sail towards Japan as our conference began!

The vessel's unlucky captain had actually sailed into port at 7:00 am on February 27, just a few hours after the quake hit some 150 km north of SVTI. The port authorities would not permit loading until a full inspection of the facilities had been completed, which was finished on March 9. Unlike some woodchip loading ports, there is no woodchip storage pile at SVTI. Instead, the chips are stored at Comaco's woodchip plant, located about 5 miles from the port. Francisco Baeza, Comaco's manager in charge of loading, coordinated a fleet of 18 trucks to ferry the woodchips to the dock, where the chips were dumped onto several portable conveyor belts for loading onto the vessel. The vessel was 3.87 million cubic feet, and it took six days to load 43,000 green metric tonnes of eucalyptus chips on board. This was actually quite close to the normal loading rate for this facility!

However, conditions at SVTI are certainly not "normal" today. The website Portstrategy reported that Berth 1 at SVTI had sustained "serious damage", and that "... a major problem remains given the collapse of many of the access ways to the terminal. Embankments are being built to overcome these new bottlenecks."¹ This report was filed on March 17, almost two days after Comaco had finished loading its woodchip vessel! One can only imagine the clogged roads and chaotic conditions that Baeza's fleet of chip trucks had to overcome in loading this vessel --- SVTI is only a few miles from the completely destroyed Talcahuano port. And this in a region where some 2 million people were estimated to be homeless immediately following the earthquake!

Comaco S.A. has been exporting woodchips to Japan for many years, and takes their commitment to their customers very seriously. And, as in so many other things I've observed in Chile, it probably never occurred to Comaco that they couldn't load that vessel, so they just went ahead and did it. Certainly the Chileans I spoke with at the Sao Paulo conference were already seeing that the rebuilding of their country will help give their new government a chance to spur their economy, create many new jobs, and make their country even stronger than before. It will be inspiring to watch this story unfold.

Readers may want to consider making a contribution to Chile's rebuilding effort. One of my favorite organizations is Habitat for Humanity, which has a continual presence in Chile: https://www.habitat.org/cd/giving/donate.aspx?link=252

1. http://www.portstrategy.com/news101/news-extra/chilean-earthquake-disrupts-ports