Brazilian forest company Fibria sells post in Conpacel for $ 1.5 billion Real

December 23, 2010 by timbercommunity

Fibria and Suzano announced yesterday afternoon trading from $ 1.5 billion of assets of the Company Concapel (Consórcio Paulista de Papel e Celulose ). Fibria is a company resulting from the union of Aracruz and Votorantim Celulose e Papel (VCP), said they accepted the proposal made by Suzano Papel e Celulose for 50% share of the Conpacel, previously a joint venture between the two companies. The transaction also involves the active role of the distributor of KSR, a former unit of the VCP for  50 million Real.

Fibria is a Brazilian company with a potent presence in the global forest products market. The company operate 6 mills, with a combined annual production capacity of 5.4 million tons of pulp. Fibria also have a 50 % stake in Veracel (joint-venture with Stora Enso), in Bahia.

The deal ends a partnership started in 2005, when VCP and Suzano joined the paper to prevent the advance of foreign competitors in the industry,.

The president of Fibria, Carlos Aguiar, told Valor that the proposal was received in Suzano this weekend and negotiation took place in "record time". "The proposal is very good for both sides. And the asset was already well known by the two companies, which facilitated the process," he said to Valoronline.

Foreign companies have shown interest in the shareholding of the Fibria Conpacel, but no firm proposal had been forwarded to the company. Suzano, in turn, has always declared interest in taking over the whole consortium, provided that the sale price was "interesting", according to the president of Suzano Mr Antonio Maciel Neto. He also said in a statement that the acquisition "confirms the company's strategy to always rely on competitive assets and to consolidate to compete in the regional leadership in printing and writing, to maximize the profitability of their operations role ; expand its distribution platform for regional role, and expand its market pulp business."

In evaluating Aguiar, the sale of 50% stake in Conpacel brings more tranquility to Fibria the resumption of expansion plans, which start with a doubling of the plant in Três Lagoas (MS), with startup scheduled for 2014. Then the company will inaugurate, along with its partner Swedish-Finnish Stora Enso, the second production line to Bahia Pulp in Veracel.

The financial settlement of Conpacel is scheduled for 31 January 2011 with the signing of the definitive agreement. The remaining $ 50 million relate to KSR, which was a business unit of fibre, and are subject to adjustment after audit. The sale of KSR Suzano to be consecrated until February 28.

The Conpacel, Consortium Paulista de Papel e Celulose, is currently made up of a pulp and paper factory installed in Limeira, in São Paulo, with a production capacity of 390 thousand tons of printing and writing papers and 650 000 tons of raw material annually. The assets include land and industrial assets 76 000
hectares in land belonging to 71 thousand hectares of planted forests, of which 53 000 hectares of its own and 18 leased acres.