From eucalyptus to paper
The day began early at the daybreak when a bus picked the crew up from the hostel in Sao Paulo. We headed towards Jacarei some hundred kilometers away where the production plants of Fibria and Ahlstrom are located. Fibria is a world leading company in pulp production whereas Ahlstrom has a solid cutting-edge position in various special papers.
The first visit was to Fibria’s seeding site where it was demonstrated how Eucalyptus seeds are nurtured and gardened carefully with scientific methods in order to later plant them to the forest farm. Then, we toured the pulp production plant of Fibria where the almost completely automated process converted vast amounts of wood chips into neatly packed bales ready to be directly loaded into trains and shipped to harbor. Finally, it was shown how the Ahlstrom plant continued to process the pulp by converting it into ready-made special paper rolls.
The excursion had two elements making it extremely interesting. Firstly, the two companies operated jointly in the same premises in co-operation where Fibria produces the pulp some part of which is then used by Ahlstrom in paper production (rest of the pulp being shipped elsewhere). In fact, the paper manufacturing plant was even previously a joint venture between the two companies before Ahlstrom acquired the Fibria’s stake. Nevertheless, this kind of an arrangement demonstrated the potential co-operation between separate companies can achieve at best resulting in benefits accrued to both sides. Secondly, the excursion gave us the possibility to see the entire value chain of paper manufacturing process.
From the Finnish point of view, the excursion showed us in practice one of the underlying reasons for a hotly-debated consequence of globalization, namely the shift in competitive advantage. Our domestic forestry industry has been struggling for the past decades with no apparent change in sight. In order to produce 1.5 million tons of pulp annually, the area of the forest required is 150 000 hectares in Brazil whereas in Finland this figure jumps up to 1 080 000 hectares. This kind of advantage for Brazilian companies is explained by the more favorable climate conditions along with fertile soil. In addition, considering other factors, the total productivity difference in forest farming is roughly 10:1. All in all, this causes a major disadvantage in the cost of raw materials for Finnish paper production. Therefore, our companies face tremendous pressures to enhance efficiency or, unfortunately, move some of their operations abroad.