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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