CMPC estimates 2015 Capex at $1 billion; looks for new opportunities to grow in tissue

CMPC estimates 2015 Capex at $1 billion; looks for new opportunities to grow in tissue


(News from RISI) Last year, CMPC’s Capex reached $1.6 billion, including the Guaíba 2 project, a new tissue machine in Mexico and new cogeneration plants.

CMPC CFO Luis Llanos said: “We will reduce Capex after Guaíba is finished. The total Capex estimated for the year 2015 is $900 million to $1 billion; half of that would be Guaíba, then we’ll have a smaller number in 2016.”

2015 will be a landmark year for CMPC, the company said. “The Guaíba pulp expansion is the largest expansion in our almost 95-year history, increasing our pulp capacity by more than 40% to 4.1 million tpy while lowering our average cost of production.
“This world class facility is now more than 90% complete and is on track to begin production at the end of the second quarter of the year, providing pulp for our well-established global client base.
“Elsewhere, we have smaller projects that will increase our tissue capacity in Mexico and advance our progress towards energy self-sufficiency.”

CMPC plans to start up a new 1.3 million tpy bleached eucalyptus kraft (BEK) pulp line at its Guaíba mill in Brazil by the end April.

The new 50,000tpy tissue paper machine at CMPC’s Altamira unit in Mexico is scheduled to start up in the third quarter of this year.

A new cogeneration plant will also begin operation at Altamira in the third quarter.

CMPC is building another two cogenerations plants – one in Puente Alto and another in Talagante, both in Chile, with start-up planned for the second and third quarters, respectively.

Llanos explained CMPC is still looking for opportunities to grow. “But of course our debt level is high due to the Guaíba project, so it is early to think about growing more before our leverage returns to at least 2.5x.
“The sectors we have priorities would be tissue and pulp – we are confident that tissue is an area of growth; for pulp, those projects require more time to be done, so in the short term we will grow more in tissue,” he said.

CMPC’s leverage level was at 3.4x at the end of fourth quarter 2014, up from 2.8x in December 2013.