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Chile is Hot Hot Hot!
By David C Skul
Since the mid-1950's Chile's wood product trade has been rapidly expanding due to the cultivation of "plantation grown" softwood and hardwood trees. Chile's unstoppable growth is also projected to rise within the next 15 years, making Chile an even greater player in the world's wood product market. Chile is not the only country in South America benefiting from such fast-growing plantations. Both Brazil and Peru are beginning to enter the wood product market, but not with such ferocity and versatility. Chile has systematically managed to capitalize on both the raw product production and the bi-product product production of its wood products.
Experimentation with such fast-growing hardwoods, primarily eucalyptus, has produced positive results prompting Chileans to establish more experimental plantations. Such bold moves are based on the notion that the fast-growing hardwoods could outperform Radiata Pine and provide the industry with an increased volume of high quality fiber as well as saw or veneer logs within 14 years of plantation establishment.
Two trends worth noting, particularly among the larger wood product companies in Chile, are the high levels of horizontal integration within the plantations total operations and the extensive investment made in technology used throughout operations. Both of these trends can be expected to continue. Hardwood and softwood markets are here to stay.
Another significant trend emerging within Chilean wood companies is the investment in other Latin American countries. The recent signing of various free trade agreements with Central American countries, including Costa Rica, has resulted in the establishment of satellite businesses that directly market Chilean wood products. A Mexican wafer board manufacturer and an OSB plant in Brazil are part of Chile's ongoing mergers. While plantations continue to emerge in Brazil and Venezuela totaling a near $40 million in investments, Chilean firms are confident the returns will be far greater than even they could have imagined.
So what does this all translate to?
Chile has clearly proven itself to be a wood producing success story. Because of trade incentives, Chile has established some of the world's most impressive plantations and no longer relies on native forests. In addition, the Chilean wood products industry has implemented a fully integrated supply and management system that represents one of the best models of efficiency within the industry. It can be expected that Chile will continue to prosper and emerge as one of the world's most important wood products supplier resulting in an increased global reliance on South American and Latin American plantations.
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About the Author
David C Skul - CEO LinkAcquire.com and Relativity, Inc. is pleased to serve his clients through traffic generating articles and one way links.
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