Assess whether Arauco should build the large new pulp plant at Itata (expanded pulp capacity plus further diversification into sawmilling and wood-processing)? Why has Arauco moved away from its traditional “pulp alone” strategy? Is the new pulp plant at Itata consistent with its moving away from “pulp alone”?

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Arauco has three main product segments: pulp products such as bleached and unbleached Kraft pulp; forestry products like pulpwood and sawlogs and wood products that included lumber, remanufactured wood products, and panels. The president wants to invest 61 billion USD to build a chemical pulp plant. It already has a capacity of 850000 tons, and this would increase to 3.2 million tons, and two years back, it has invested 150 million USD in the Valdivia plant with a production capacity of 700000 tons. This would make its total capacity to 4.1 million tons. In 2003, the sale of pulp was 709.8 million USD, or 49.7% of the sales.

The current demand for paper and pulp is decreasing, and the demand in Europe and the US is falling with a reduction in prices. The company is generating almost 50% of its sales from pulp, and it would make an only marginal rise in earnings by building the plant. It should NOT invest in the new venture. The market demand is for other wood, panels, lumber, and other products, and the company is moving into these markets since the earnings are higher and the potential for growth exists.

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Academic.Tips. (2022) 'Assess whether Arauco should build the large new pulp plant at Itata (expanded pulp capacity plus further diversification into sawmilling and wood-processing)? Why has Arauco moved away from its traditional “pulp alone” strategy? Is the new pulp plant at Itata consistent with its moving away from “pulp alone”'. 10 November.

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Academic.Tips. (2022, November 10). Assess whether Arauco should build the large new pulp plant at Itata (expanded pulp capacity plus further diversification into sawmilling and wood-processing)? Why has Arauco moved away from its traditional “pulp alone” strategy? Is the new pulp plant at Itata consistent with its moving away from “pulp alone”? https://academic.tips/question/assess-whether-arauco-should-build-the-large-new-pulp-plant-at-itata-expanded-pulp-capacity-plus-further-diversification-into-sawmilling-and-wood-processing-why-has-arauco-moved-away-from-its-tradi/

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Academic.Tips. 2022. "Assess whether Arauco should build the large new pulp plant at Itata (expanded pulp capacity plus further diversification into sawmilling and wood-processing)? Why has Arauco moved away from its traditional “pulp alone” strategy? Is the new pulp plant at Itata consistent with its moving away from “pulp alone”?" November 10, 2022. https://academic.tips/question/assess-whether-arauco-should-build-the-large-new-pulp-plant-at-itata-expanded-pulp-capacity-plus-further-diversification-into-sawmilling-and-wood-processing-why-has-arauco-moved-away-from-its-tradi/.

1. Academic.Tips. "Assess whether Arauco should build the large new pulp plant at Itata (expanded pulp capacity plus further diversification into sawmilling and wood-processing)? Why has Arauco moved away from its traditional “pulp alone” strategy? Is the new pulp plant at Itata consistent with its moving away from “pulp alone”?" November 10, 2022. https://academic.tips/question/assess-whether-arauco-should-build-the-large-new-pulp-plant-at-itata-expanded-pulp-capacity-plus-further-diversification-into-sawmilling-and-wood-processing-why-has-arauco-moved-away-from-its-tradi/.

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Academic.Tips. "Assess whether Arauco should build the large new pulp plant at Itata (expanded pulp capacity plus further diversification into sawmilling and wood-processing)? Why has Arauco moved away from its traditional “pulp alone” strategy? Is the new pulp plant at Itata consistent with its moving away from “pulp alone”?" November 10, 2022. https://academic.tips/question/assess-whether-arauco-should-build-the-large-new-pulp-plant-at-itata-expanded-pulp-capacity-plus-further-diversification-into-sawmilling-and-wood-processing-why-has-arauco-moved-away-from-its-tradi/.

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"Assess whether Arauco should build the large new pulp plant at Itata (expanded pulp capacity plus further diversification into sawmilling and wood-processing)? Why has Arauco moved away from its traditional “pulp alone” strategy? Is the new pulp plant at Itata consistent with its moving away from “pulp alone”?" Academic.Tips, 10 Nov. 2022, academic.tips/question/assess-whether-arauco-should-build-the-large-new-pulp-plant-at-itata-expanded-pulp-capacity-plus-further-diversification-into-sawmilling-and-wood-processing-why-has-arauco-moved-away-from-its-tradi/.

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