ALL to transport cellulose from Eldorado

Yesterday afternoon, ALL and Eldorado Brasil signed a contract planning for the transport of more than half the cellulose to be produced by Eldorado at their plant in Três Lagoas, State of Mato Grosso do Sul, the construction of which has already been started, through to the port of Santos in São Paulo. The total value of the contract, which will run for a period of 15 years and plans a joint investment of US$ 180.07 million, has not been informed. The industrial unit will start commercial operation in the second half of 2012 and will have a total capacity to produce 1.5 million tons per year of whitened eucalyptus cellulose.

The contract signed yesterday plans for the multimodal handling of 800 thousand tons of cellulose per year.  The transport of the other 700 thousand tons to be produced in Três Lagoas would be made by other logistics operators, and all modals are being considered by the company, which is controlled by J&F Holding, the controlling company of JBS Friboi, and with MCI Empreendimentos, of entrepreneur Mário Celso Lopes, as the second shareholder.

According to the Commercial Director of ALL, Sérgio Nahuz, a stretch of 90 kilometers between Três Lagoas and Aparecida do Taboado, also in Mato Grosso do Sul, will be served by trucks, also belonging to ALL. The road bridge extends to Aparecida do Taboado, where a transfer terminal will be constructed, says the executive. From there, the Eldorado cellulose will travel a further 900 kilometers by rail to the Port of Santos.

According to Mr. Nahuz, there will be a joint investment of some US$ 180.07 million, for more than 300 cars, 20 locomotives and also the construction of two transfer terminals – as well as the unit in Aparecida do Taboado, there will also be one in Santos.

The rail network, so says the executive, is already used for the transport of grain. Nowadays, between 60% and 65% of the 40 million tons handled every year by ALL correspond to the transport of agricultural commodities. The forest portfolio, which includes the paper and cellulose segment, will rise from 1.2 million tons to 2 million tons per annum, as from the implementation of the new contract.

In Três Lagoas, ALL is also responsible for the transport of whitened eucalyptus cellulose produced by Fibria, a company resulting from the merger between Votorantim Paper and Cellulose (Votorantim Celulose e Papel – VCP) and Aracruz, in the factory unit installed at the opposite point to that of the construction of the Eldorado unit. In the case of Fibria, with the implementation of a railroad bypass of 12.4 km in this municipality of Mato Grosso do Sul, and also a branch line of 40 kilometers connecting the industrial unit to this bypass, the cellulose will leave the production line straight to the ALL railroad carriages, heading for Santos. This transport is currently made by train and truck.

We will almost double the total size of our Forest portfolio with this contract, which is aligned with the strategy of cargo diversification, says Mr. Nahuz. First founded in 1997, ALL now operates a fleet of almost 1.1 thousand locomotives, more than 31.6 thousand railroad carriages and also 650 road vehicles. The Eldorado project in Três Lagoas includes investments totaling US$ 2.88 billion, with the implementation of the largest single line of cellulose production, considering the most advanced technology now available on the market. At the end of last year, the company signed contracts for the purchase of equipment estimated at a total of US$ 1.5 billion.