Brazil's Arauco Invests $4.6 Billion in Pulp Mill, 3.5 Million Tons to Come Online in 2027

en.Wedoany.com Reported - Arauco is advancing the Sucuriú pulp project in Inocência, Mato Grosso do Sul, Brazil. With a total investment of $4.6 billion (approximately R$25 billion) and a planned annual production capacity of 3.5 million tons of pulp, the project is one of the largest private investments in Brazil's agribusiness sector.

The Sucuriú project marks Arauco's first pulp operation in Brazil and the largest investment in the company's history. The mill occupies approximately 3,500 hectares, adjacent to the Rio Sucuriú, and is supported by a forestry base with around 400,000 hectares of eucalyptus plantations. Land leveling began in 2024, and according to information released by the company in July 2026, the project is still expected to begin operations by the end of 2027, with a nominal annual production capacity of 3.5 million tons of short-fiber pulp once operational.

Nearly all of the pulp produced by the project is destined for external markets. To secure an export route, Arauco is building its own rail spur, the EF-A35, connecting to the marshalling yard of Rumo's Northern Network (Malha Norte). The rail journey from the mill site to the Port of Santos in São Paulo State spans approximately 1,050 kilometers, with Santos serving as the primary export gateway for the products.

This spur line is also one of the early implementation projects under Brazil's new infrastructure concession model. The National Land Transport Agency (ANTT) has stated that this is the first railway concession granted under the new model to truly enter the construction phase. Early media reports of the original project estimated the railway at approximately 47 kilometers in length, plus a 270-meter bridge spanning the São Mateus stream; the latest figures released by Arauco list 45 kilometers of external track, along with an additional 9 kilometers of rail within the mill. ANTT confirmed the groundbreaking of the spur in February, with completion expected in the second half of 2027, and estimates that once the mill is operational, all 3.5 million tons of pulp produced annually will be transported by rail to Santos.

According to Brazil's Ministry of Planning (Ministério do Planejamento), rail-related investments, including locomotives and wagons, total approximately R$2.4 billion. Arauco plans to deploy 26 locomotives and around 1,000 railcars, with a single-trip transport capacity of approximately 9,600 tons of pulp. The company estimates that once the railway is operational, it will replace approximately 190 truck trips per day, reducing CO2 emissions by up to 94% compared to road transport.

Carlos Altimiras, President of Arauco Brazil, stated that this investment reaffirms the project's public and strategic significance, as it will modernize regional logistics, enhance road safety, and reduce the environmental impact of operations.

Inocência is a relatively small city, and the scale of the project stands in stark contrast to its size. During the construction phase, more than 14,000 jobs are expected to be created; once operational, approximately 6,000 workers are expected to remain employed across industrial, forestry, and logistics activities. These changes are placing pressure on local construction, housing, commerce, food, transportation, and services sectors, while also creating new opportunities. The project is also part of Mato Grosso do Sul's broader economic expansion driven by planted forests, pulp, and logistics infrastructure.

The Sucuriú project also includes an energy system. The mill will generate over 400 megawatts of power from biomass, meeting its own electricity needs, with a surplus of approximately 200 megawatts available for injection into Brazil's National Interconnected System (Sistema Interligado Nacional). The project integrates forestry production, pulp manufacturing, power generation, and a dedicated rail transport system into a single operational framework.

In terms of product markets, the pulp produced in Inocência is planned to be sold primarily to Asia, Europe, and North America. The rail spur is expected to be completed in the second half of 2027, roughly in line with the mill's startup schedule. If the timeline holds, by the end of 2027, this dedicated railway will directly link the planted forests of inland Mato Grosso do Sul to international shipping routes at the Port of Santos.