Zucamor prepares for market recovery with new Fosber corrugator

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Zucamor prepares for market recovery with new Fosber corrugator

December 02, 2014 - 03:26

Economists say that Argentina will remain in recession until 2015 and should start growing again in 2016. The unofficial inflation rate in that country is estimated at 40% in 2014 and the number should repeat next year. In that scenario, major packaging paper producer Grupo Zucamor is moving to bypass its competitors and be prepared for the future. "We want to be ready to compete globally and also meet the domestic demand when the country's economy recovers. The combination of high inflation rate and demand reduction has negative impacts to our business, that's why we need to be more competitive," Zucamor's commercial director Daniel Wanschelbaum told PPI Latin America.

The latest step taken by Zucamor in that direction involved the installation of a new Fosber corrugator at the Quilmes plant, in Buenos Aires province. "This is the most modern corrugator in the region and it can produce up to 70,000 tonnes/yr (110 million m2) of corrugated board," said Daniel, adding that the equipment is not yet running at full capacity, as it replaced another corrugator which was operating at the same plant and is now being transferred to the company's San Juán unit, in western Argentina.

Zucamor is the second largest corrugated board producer in Argentina with an estimated 15% market share. The company's total corrugated board production capacity is 250 million m2. Wanschelbaum mentioned that the Argentinean corrugated box market should decline by 6% this year and by a further 3% in 2015.

Another recent investment made by Grupo Zucamor involved $75 million in a biomass energy project at its Papel Misionero plant. "Now we are moving on with the installation of a high consistency refiner, which should be operating in the first half of next year and will help us to improve our competitiveness in sack kraft paper production," Daniel explained.

Currently, Zucamor is the sole sack kraft producer in Argentina, making around 55,000 tonnes/yr. The company also produces around 35,000 tonnes/yr of kraftliner. "The paper bag market has been affected by the construction industry's low performance, which is likely to decline by 7-8% this year and by a further 6% next year. As a result, demand for paper bags should fall by 8-10% in 2014," Wanschelbaum said.

Zucamor's Puntapel plant, located in the San Luis province, has an annual capacity of around 120 million paper bags.

Wanschelbaum also said that Zucamor has been advancing in the recycled containerboard market. "Our objective is to continue incorporating new technologies to be able to produce more resistant paper with lower basis weight, which is one of our box customers' demands." The company produces 120,000 tonnes/yr of testliner and fluting at two mills in Argentina (Ranelagh and Mendoza).

As for forests, Zucamor has 23,500 ha of lands, of which 13,000 ha are planted with pine. The company's annual turnover is $280 million.

By Renata Mercante, Editor, PPI Latin America,rmercante@risi.com