In 2006 Brazil ranked the first in the world in paper and cardboard production

Jul 10, 2007. /Lesprom Network/. Over the last two decades, South America has recorded a significant increase in the production, consumption and trading of forest products. Brazil dominates the sector regionally. Its total industrial roundwood removals of 118.1 million cubic meters (2005) represented almost 70% of the region’s industrial harvest. Around 75% of Brazil’s industrial harvests were from plantation forests. The total revenue of the Brazilian forest-based industries in 2005 was $27 billion, as disclosed by the Brazilian Silviculture Society (SBS). As such, these industries are an important contributor to the national economy, attributable for almost 4% of GDP. In 2006, exports of forest-based products from Brazil totalled $7.7 billion, representing 5.6% of total exports. Pulp and paper were the single largest component by value at $4 billion. Imports, by contrast, amounted to $1.2 billion in 2006, being essentially limited to a few specific products, such as long-fibre pulp, newsprint and coated papers. Imports also include capital equipment, such as timber harvesting and transportation equipment and production machinery. Overall, therefore the forest-based products sector delivered a healthy external trade surplus of around $6.5 billion. Pulp production reached 1.1 million tonnes in 2006, recording growth of more than 7% over 2005 – further over the five years ended 2006, the country’s total pulp output increased a staggering 50%, ranking Brazil in sixth place globally after the US, Canada, China, Finland and Sweden. For 2007, the local industry is forecasting pulp production to increase by a further 6%, significantly ahead of global demand and therefore increasing Brazil’s market share. Despite the strong real, Brazilian pulp exports powered ahead with a near 16% increase in volume, from 5.2 million tonnes in 2005 to 6.0 million tonnes in 2006, equivalent to around 54% of total pulp production, or nearly 69% of bleached eucalyptus output, since all exports comprise bleached short fibre pulp. In value terms, the increase was even higher, up 20%, from $2.0 billion in 2005 to $2.5 billion in 2006. The markets are worldwide – Europe (50%), Asia (29%) and North America (20%). Paper and paperboard output was approaching 8.8 million tonnes in 2006, up nearly 2% on 2005. At this level of output, Brazil ranks first worldwide. With total consumption of almost 8.0 million tonnes in 2006, and with just under 6% growth over 2005, this indicates a per capita consumption of almost 43 kg/inhabitant/year. This is well below the global average of around 54 kg. For 2007, growth of almost 3% is forecast in paper and board production with growth in consumption in the order of 4%. In contrast to pulp, paper and paperboard production is mainly for the domestic market, with exports representing 19% (or 1.7 million tonnes) of total output in 2006. Exports were down more than 5% on 2005, reflecting both a redirection of output to meet domestic demand and a reduction of competitiveness in export markets with the appreciation of the Real. Nevertheless, because of currency appreciation, the dollar value of exports rose by nearly 1% to around $1.5 billion in 2006. The main export markets in 2006 were Latin America (49%) and Europe (25%). Newsprint production reached 135 000 tonnes in 2006, against local consumption of 590 000 tonnes, with Canada being the main source of imports. In tonnage terms, newsprint is the main import category of paper, with volumes rising more than 20% in 2006 due to strong local demand. In the case of printing and writing paper, production was around 2.5 million tonnes in 2006, with consumption of just under 2.0 million tonnes. Around 75% of production comprises uncoated woodfree papers. About 800 000 tonnes were exported, with a focus on uncoated woodfree papers, and almost 300 000 tonnes were imported (coated and uncoated papers). Packaging papers represent just under half of domestically produced paper and board volumes, with around 45% of primary output used in integrated conversion. According to BRACELPA, production totalled 4.2 million tonnes in 2006, of which containerboard (corrugated case materials) comprised almost 70%, cartonboard around 13%, kraft papers 10% with a range of other papers such as wrappers, making up the balance. Against this, apparent consumption stood at 3.5 million tonnes in 2006, giving exports of around 700 000 tonnes with kraftliner being the principal export category. Imports are negligible. Overall, local consumption of containerboard, cartonboard and kraft papers grew slowly at not much more than 1% in 2006. However, producers are expecting local demand to pick up in 2007 in line with higher GDP growth, which is forecast at around 4.4%. The production of tissue paper totalled almost 800 000 tonnes in 2006, and is almost exclusively aimed at the domestic market. Output was static last year, but a redirection of some of the small export volumes was able to meet growth in local consumption of about 4%. With its abundance of low-cost virgin fibre, the use of recycled fibre in Brazil is seen as complementary. Data from BRACELPA shows that the use of recycled paper as a furnish has increased significantly, rising from 36% in 1995 to 47% in 2005 of total fibre usage in papermaking, when around 3.4 million tonnes of recovered paper were used. Over 60% of recycled fibre is used to make corrugated case materials, with tissue making using a further 15%. In 2006, according to figures from the ministry of development, industry and trade (MDIC), exports of sawn timber, wood panels (plywood and composite) and remanufactured wood products reached $3.2 billion, equivalent to around 40% of total forest-based products exports, against $3.0 billion in 2005. Production of sawn tropical wood from native forests at mills principally in the Northern region has been fairly stable for a number of years at just over 14 million cubic meters. Around 13 million cubic meters is consumed domestically, mainly by the civil construction sector, with the balance exported, representing about 1.5% of world trade in sawn tropical wood. Around 1.0 to 1.3 million cubic meters per year of tropical hardwood plywood is produced by countless mainly small producers and with a large share of this being exported. Production of tropical plywood has remained fairly stable in recent years but like all production based on native timber – producers have been suffering in the transition to the National Forest Programme. Although tropical hardwood plywood once dominated, production of softwood plywood has moved into the ascendancy, with production reaching around 2.4 million cubic meters in 2006, an increase of almost 70% on 2000, with around 75% of output exported. The main export markets are the US, the UK, Belgium and Germany. Brazil has developed an export oriented softwood plywood industry, which has been strongly competitive in international markets based on its low cost plantation pine resources. The domestic market has been less attractive due to strong price competition from low cost composite panels, especially in the wooden furniture market. Despite this growth, both production and export volumes of softwood plywood have stalled since their peak in 2005, when exports totalled nearly 2 million cubic meters, due, amongst other factors, to the appreciation of the real. In dollar terms, exports of softwood plywood peaked at $521 million in 2004, falling to $510 million in 2005 and to $438 million in 2006. In addition to the challenge of an appreciating currency, producers are suffering from some wood shortages, the forest blackout, new competition, such as China with its lower labour costs, as well as a range of tariff and non-tariff trade barriers in export markets. Brazil has developed a modern composite panels industry with production rising strongly in recent years, reaching around 4.6 million cubic meters in 2006, up more than 60% on 2000. The domestic furniture industry has been the main driver of this growth. In the same year, exports were over 500 000 cubic meters, slightly above 10% of output. In practice a much higher proportion finds its way into exports through remanufacture into furniture. Figures from SBS suggest around 46% of output represented particleboard, followed by MDF, with 37%, hardboard with 1% and OSB with 6%. The production of composite panels is based on plantation fibre- pine or eucalyptus.