Jundiai, Brazail, May 16, 2011 (RISI) -In an exclusive interview with PPI, members of the Brazilian AkzoNobel Pulp and Paper Chemicals (Eka Chemicals) team express their vision for the coming years, notably what have become known as "chemical islands" to support massive pulp mills in Brazil, as well papermaking and water treatment solutions.
Antonio Carlos Francisco became the head of Eka Chemicals do Brazil in early 2010, having played a central role at Eka Engineering for the previous decade. Rogerio Menezes, finanical director, has seen his job become more challenging and complex because of the huge scale of projects and financial requirements. Pablo Wiedenbrug, operations director, is responsible for all of Eka's on-site production units, including Veracel Bahia, Fibria Três Lagoas, and now the Eldorado project. Julio Cabrales, commercial director, has led the company's growth in the Brazilian paper chemicals market.
In the following interview they express their vision concerning the unique challenges in Brazil.
PPI: Describe Eka's position in the Brazilian pulp and paper industry.
Francisco:Before talking about Eka, let me first compliment the visionaries who literally planted the potential for a world scale business in various regions of Brazil, which were very poor. I am referring to the eucalyptus phenomena, which has led to the emergence of pulp producing business giants, providing quality, high performance fiber resources to papermakers across the globe.
Building upon eucalyptus plantations, and decades of research into producing "fine paper and tissue" forests of trees, which are harvested in less than seven years, we now enjoy a business climate ideal for international success in pulp, especially in growth markets like China.
Supporting our customers' sustainable and growing businesses-built around nature-we are a true "symbiotic" partner, producing essential chemicals for them, while they provide the power supply to help us meet their needs.
This symbiotic relationship is based upon complimentary, but individual know-how, essential to overall success, and long term sustainability for each other.
Wiedenbrug:On the most fundamental basis, our relationships with pulp producers provide them with complete chemical islands--steady supply of all the chemicals they need, while we buy energy from them to power our operations. We both eliminate transport costs, and gain from being located beside each other. They generate power for us to make chemicals for them. Together we produce quality, long-term jobs. Partnership is crucial for their business, and ours. You could call it perfect synergy.
Antonio Carlos Francisco, (center left) president of Eka Chemicals do Brasil was recently joined for the PPI interview by team members Rogerio Menezes (left), financial director, Pablo Wiedenbrug( far right), operations director, and Julio Cabrales, commercial director.
PPI : Comment of the timeline of development over the past decade.
Francisco:Following upon success of large scale projects at Veracel, Bahia, which began back in 2005, Fibria's new mill project in Tres Lagoas in 2007, and now Eldorado Celulose e Papel's ground breaking launch, also in Tres Lagoas, we are marching in step with leaders, who are reshaping the pulp marketplace globally.
Menezes:For Eka in Brazil, the Eldorado project represents around 20% increase in total sales. This way, the revenue of Eka in Brazil goes up, contributing significantly to the AkzoNobel goal to reach EUR 1.5 billion in our country by 2015. The EUR 90 million investment at Eldorado is the largest ever for the BU Eka and, at the same time, also for the Group AkzoNobel in Latin America. Over the next fifteen years, we see a mutual opportunity for profitability and sustainability for the long term, because we understand the pulp business with considerable depth.
Just as we are focusing on this project, Eldorado is already expressing serious plans to double capacity.
Francisco:It's rare to see the balance of power shift in an industry in a lifetime, much less in a decade, but that's the story in Brazil today in the pulp segment.
Brazil is a place where huge announcements of investment and growth in the pulp and paper industry continue to repeat themselves, and keep getting even bigger. This will continue from 2011 through 2021, projected to equal or exceed the last decade.
PPI : What about the markets for pulp ?
Francisco:The growth and prosperity of Eka Chemicals in Brazil is happening in sync with the large-scale growth of paper machines in Asia and elsewhere.
This growth takes on another dimension when the impact of eucalyptus in papermaking is considered, because Eka has gained major paper chemicals business in China, for example, where eucalyptus pulp is playing a key role. We are closely aligned with the pulp from Brazil, and papermaking performance where the pulp is used.
PPI: Why has Eka been a good fit for pulpmakers in Brazil?
Francisco:Over twenty years ago our global management team saw the importance of building an engineering and construction group to support large-scale pulp projects, followed by ongoing production of chemicals on-site.
This decision, combined with a depth of knowledge of pulp bleaching, has enabled us to become a long-term and first choice partner for pulp manufacturers in this rapidly growing industry. In less than a decade we have seen our chemical island concept become the ideal match for pulp makers in this region.
Wiedenbrug:In support of Brazilian industrial leaders who chose to develop large-scale pulp mills in very remote regions, we have proven to be an ideal partner to deliver comprehensive projects from design through start-up and manufacturing, and then running facilities over long periods of time. Because our processes are energy intensive, we gain from the power infrastructure in place to run pulp mills. Therefore, besides being a reliable supplier we are also a good customer. The building of this strong relationship happens day by day. It's not simply a matter of building facilities, and then going away. It's a continuous effort to improve and optimize processes and human relations.
Francisco:While the boom for Eka Chemicals' in Brazil has been the widespread acceptance of chemical islands for bleaching, what's important but less visible is our role in raising performance of papermaking and management of process water.
Eka has earned a leading position in chemical islands because of a vision to see the potential of synergy on a massive scale in pulp production and business structure to make this happen.
PPI: How do these major pulp projects fit into the big picture in Brazil?
Francisco:Pulp projects happening now in Brazil fit into an entirely new context, because such dramatic progress has occurred over the past few years. Five decades have been condensed into one.
Menezes:This is an important moment of development and maturity of Brazil, where considerable investments are being made in all sectors. Everything is growing at an accelerated pace-purchasing power, jobs, and a diversity of opportunities.
Cabrales:There's a spirit in Brazil to lift everyone. The whole country is rising, and natural resource exploitation is a fundamental part of this development.
PPI: What about sustainability?
Wiedenbrug:My personal definition of sustainability is working in an efficient, responsible and profitable way for the long term, especially including benefits for the communities close to the plant. We take pride in developing people from villages close to the pulp mills, because these individuals and families become part of the long-term success.
PPI: Pulpmaking's rapid growth is evident, but what about papermaking, and other segments, like water management?
Cabrales:With the World Cup and Olympics coming to Brazil in 2014 and 2016, the need for improvements in water quality has been well emphasized. In Brazil, Eka's Purate systems are now utilized to provide water disinfection chemicals for not only industrial applications but perhaps more importantly drinking water purification systems - these applications include supplying chemicals for the metropolitan area of the city of Curitiba with a population of 3.2 million, and the city of Porto Alegre , with a population of 2.0 million people.
The on-site generation of chlorine dioxide using Eka's Purate technology for these applications enables the user to replace both elemental chlorine and organic biocides and is quickly gaining momentum.
In the pulp and paper industry the Purate system is the fastest, easiest and most cost effective chemistry to control biofilm and slime deposits, as well as improving sheet quality and performance on printing presses. Applications in other industries are also rising with several installations now commercial at some of the oil giant Petrobras' facilities.
Another pioneering element of our Purate system includes software and hardware systems to better apply chemicals, and monitor performance remotely.
On the papermaking side, silica nanoparticle technology has continued to grow, evidenced by Eka's investment at the Rio plant back in 2005 and further expansion since then. As the Brazilian paper industry continues to develop, we will be there with other paper chemicals, like sizing agents and rheology modifiers to help them improve for the local market, as exports, too.