Paracel activates infrastructure phase for its Paraguay pulp mill project

Laying the groundwork for global capacity

Paraguay’s emergence as a formidable player in the global pulp market is no longer a theoretical projection. Following the groundbreaking ceremony in the Paso Horqueta district in May 2026, Paracel has officially initiated the construction of the critical infrastructure that will sustain its future 1.8-million-tonne Bleached Eucalyptus Kraft Pulp (BEKP) mill and the surrounding industrial hub. For an industry accustomed to seeing massive capacity additions concentrated in Brazil and Uruguay, this development firmly places Paraguay on the map as the next major growth frontier for sustainable hardwood pulp.

Backed by a USD 165 million financing package from IDB Invest, this foundational phase focuses heavily on resolving the supply chain and energy prerequisites inherent to the country's geography. Because Paraguay is landlocked, competitive export logistics are paramount. The immediate infrastructure works include a state-of-the-art private river port on the Paraguay River, designed to seamlessly connect the mill's output to the Paraguay-Paraná waterway, ensuring efficient transit to Atlantic seaports. In addition to the river terminal, the project encompasses a dedicated electrical substation, high-tension transmission lines, and the specialized road networks required to handle high-volume, continuous industrial traffic.

By aggressively front-loading these logistics and energy investments before the core mill assembly—which is scheduled to begin in 2027 with initial operations targeted for 2028—Paracel is strategically mitigating the operational bottlenecks that frequently delay greenfield megaprojects in emerging regions. This sequencing demonstrates a mature approach to capital deployment, ensuring that the heavy civil works for the digesters and recovery boilers will proceed within a fully functional industrial environment.

Industrial synergy and cascading wood use

Furthermore, the development of the industrial hub in Concepción goes far beyond a standalone pulp mill, aiming instead to create a fully integrated, multi-product wood processing ecosystem. In a highly significant move that redefines regional resource efficiency, the Brazilian plywood giant Grupo Sudati announced its integration into the Paracel industrial park. Sudati will inject approximately USD 215 million to build its own production facility.

This partnership exemplifies the "cascading use of wood" principle: harvested trees will be meticulously graded and routed according to their highest value application. Straight, mature logs will be processed for premium plywood, while the remaining wood and industrial byproducts will feed Paracel's sustainable pulp lines. This physical proximity eliminates redundant transport emissions and maximizes the economic yield of every hectare planted. This synergy alone is projected to generate over 2,000 direct and indirect jobs, adding significantly to the 7,000 overall employment opportunities the Concepción hub is expected to create.

Securing the certified fiber pipeline

Securing the fiber base remains the unquestionable cornerstone of the entire operation. Paracel already controls a massive landbank of approximately 203,000 hectares, with over 100,000 hectares actively planted and operating under strict Forest Stewardship Council (FSC®) certification. To support the expanded industrial scope brought by the Sudati agreement, the companies have committed to afforesting an additional 30,000 hectares.

This aggressive yet environmentally grounded forestry strategy guarantees that by the time the mill's operations commence in 2028, the raw material pipeline will be mature, certified, and fully capable of sustaining maximum capacity without supply disruptions.

Establishing the logistics framework and securing a robust, FSC-certified fiber base prior to erecting the main facility is a masterclass in greenfield project execution that sets Paracel up for long-term operational stability. Will the creation of this heavily integrated industrial cluster in Concepción eventually shift the center of gravity for South American pulp production away from traditional strongholds? Follow The Paper for daily news, market signals and key updates from the global paper, corrugated and packaging industry. — Sigue toda la actualidad del sector en www.thepaper.ai