CMPC and Arauco ride pulp rebound as CCU reshuffles under new CEO
Chile · Business
Key Facts
—Pulp prices. CMPC and Arauco are benefiting from a cyclical recovery in global hardwood pulp prices, lifting revenues and justifying massive Brazilian expansion plans.
—CMPC Brazil. CMPC is evaluating a USD 4 billion pulp mill in Rio Grande do Sul with initial capacity of 2.5 million tonnes per year, targeting board approval by mid‑2026.
—Arauco Sucuriú. Arauco is building the world’s largest single‑phase pulp mill in Mato Grosso do Sul, Brazil, with annual capacity of 3.5 million tonnes and investment of US$ 4.6 billion.
—CCU leadership. Eduardo Ffrench‑Davis becomes CEO of CCU on 1 July 2026, succeeding Patricio Jottar after 28 years, while Pablo Granifo Lavín takes over as chairman.
—Structural overhaul. CCU’s new CEO has launched a “Vamos por más” strategy, creating a unified Chile division and a transformation unit to streamline beer, non‑alcoholic and wine operations.
A Chile pulp rebound is lifting forestry giants CMPC and Arauco as they commit billions to Brazilian expansion, while beverage leader CCU undergoes its most significant leadership and structural overhaul in nearly three decades.
Pulp prices turn a corner for Chile’s forestry heavyweights
After a punishing downturn that squeezed margins across the global pulp industry, benchmark hardwood pulp prices have begun a cyclical recovery that is now flowing through to the earnings of Chile’s two largest forestry exporters. The timing is critical: both Empresas CMPC and Celulosa Arauco are in the middle of multi‑billion‑dollar capacity expansions in Brazil, and firmer prices provide the cash flow and investor confidence needed to see those projects through.
CMPC’s fourth‑quarter 2025 results, released on 30 January 2026, showed consolidated sales of USD 1,891 million and a 10 per cent quarter‑on‑quarter rise in net income to USD 37 million, driven by higher pulp volumes and pricing. Although first‑quarter 2026 net income fell 50 per cent year‑on‑year to USD 25 million because of planned maintenance at the Guaíba mill in Brazil, management pointed to cost discipline and a biopackaging margin recovery as evidence that the underlying earnings trajectory is improving.
CMPC bets USD 4 billion on a new Brazilian pulp plant
CMPC is not merely riding the price recovery; it is positioning for the next decade. In April 2026 the company filed with Brazilian and Chilean regulators that it had reached an agreement with the state government of Rio Grande do Sul to assess construction of a new pulp mill, a project it calls “Natureza.”
The proposed facility carries an estimated price tag of USD 4 billion and would initially produce up to 2.5 million metric tonnes of bleached hardwood kraft pulp per year, with room for future expansion. Chairman Bernardo Larraín Matte has described the initiative as part of a “new growth cycle,” though final board approval is not expected until mid‑2026, and the project remains subject to technical and environmental evaluations.
For investors, the Natureza project represents both a long‑term growth story and a near‑term capital allocation question. CMPC’s ability to fund a USD 4 billion build while maintaining dividends and balance‑sheet strength will depend heavily on whether the pulp price recovery proves durable.
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Arauco’s Sucuriú mill: the world’s largest single‑phase pulp project
If CMPC’s ambitions are large, Arauco’s are historic. The company, controlled by AntarChile and the Copec group, is building the Arauco Sucuriú mill in Inocência, Mato Grosso do Sul, designed to be the world’s largest single‑phase pulp plant with annual capacity of 3.5 million tonnes.
The project, valued at US$ 4.6 billion, received its installation licence from state environment agency IMASUL in May 2024, and a cornerstone ceremony was attended by Brazil’s Vice President Geraldo Alckmin. Arauco has also recycled capital to support the build, selling part of its Brazilian plantation portfolio to Klabin for USD 1,168 million, generating roughly USD 967 million after taxes and a profit of about USD 174 million.
Arauco’s chief financial officer has expressed confidence that the counter‑cyclical gamble will pay off as global demand firms. Yet environmental risks linger: the company faced a mass fish kill at its Licancel plant in Chile and watchdog groups have warned that the Sucuriú mill could threaten the Três Lagoas biodiversity area, raising ESG concerns that international investors and lenders are increasingly unwilling to ignore.
CCU enters a new era with board renewal and CEO succession
While pulp producers ride the commodity cycle, Compañía Cervecerías Unidas is navigating a different kind of transition. Long‑time chairman Francisco Pérez Mackenna resigned effective 31 January 2026, and the board appointed Pablo Granifo Lavín as his successor and Macario Valdés Raczynski as a new director.
The bigger shift comes at the top. Patricio Jottar, CCU’s chief executive for 28 years, will step down on 30 June 2026 and join the board, making way for Eduardo Ffrench‑Davis, currently general manager of the company’s bottling subsidiary.
Heineken, a key strategic partner, is deepening its governance role: Alexandre Othenio Carreteiro, president of the Americas region for the Dutch brewer, will become vice‑chairman from 1 August 2026.
Inside CCU’s “Vamos por más” restructuring
Ffrench‑Davis is not waiting to make his mark. According to an internal letter reported by Chilean media, he has already communicated a new corporate strategy called “Vamos por más” to roughly 10,000 employees, with structural changes taking effect from August 2026.
The reorganisation creates a unified CCU Chile general management under Matías Bebin Subercaseaux, consolidating the beer and non‑alcoholic beverage categories, and establishes a transformation unit to oversee technology, logistics, commercial and industrial functions. The wine business is also being reshaped: Compañía Pisquera de Chile will handle domestic wine sales, while Viña San Pedro Tarapacá focuses on exports and innovation.
These moves echo CCU’s earlier decision to relocate headquarters to its Quilicura brewery site, prioritising operational proximity over corporate prestige. For investors, the restructuring signals a push for efficiency and agility in a competitive Latin American beverage market where Heineken’s influence is set to grow.
What the Chile pulp rebound and CCU overhaul mean for investors
The three stories share a common thread: Chilean corporates are using a moment of relative macroeconomic stability to make generational bets. CMPC and Arauco are doubling down on Brazil as the world’s most competitive pulp geography, wagering that rising demand from tissue, packaging and textile markets will absorb the new capacity.
CCU’s overhaul is less capital‑intensive but equally strategic, aligning governance with Heineken’s global playbook and streamlining a portfolio that spans beer, soft drinks, water and wine. A proposed acquisition of Nestlé’s remaining 49.9 per cent stake in their bottled‑water joint venture, valued at approximately CLP 164,597 million (around USD 175 million), would give CCU full control of a key non‑alcoholic asset, though board approval is still pending.
For expatriates and internationally minded professionals living in Chile, these shifts carry practical implications. A sustained pulp upswing supports employment in forestry regions from the Bío Bío to Los Ríos, while CCU’s restructuring may reshape one of the country’s most visible consumer‑goods employers.
Both trends reinforce Chile’s role as a corporate headquarters hub for Latin America, even as the real operational growth migrates to Brazil.
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Frequently Asked Questions
Why are CMPC and Arauco investing so heavily in Brazil right now?
Both companies see Brazil as the most cost‑competitive geography for pulp production, with favourable climate, land availability and logistics. The cyclical recovery in global pulp prices provides a stronger cash‑flow backdrop to justify multi‑billion‑dollar projects, and both firms are positioning to capture long‑term demand growth from Asia and the packaging industry.
Who is CCU’s new CEO and what changes is he making?
Eduardo Ffrench‑Davis, previously general manager of CCU’s bottling subsidiary, becomes CEO on 1 July 2026, succeeding Patricio Jottar. He has launched a “Vamos por más” strategy that creates a unified CCU Chile division, establishes a transformation unit, and reorganises the wine business to separate domestic and export operations.
What environmental risks are attached to Arauco’s Sucuriú mill?
Environmental groups have warned that the Sucuriú project overlaps with the Três Lagoas biodiversity conservation area and could contaminate rivers, deplete groundwater and convert Cerrado savanna into eucalyptus monoculture. Arauco also faced a mass fish kill incident at its Licancel plant in Chile, leading to management dismissals and a temporary closure order, which has heightened scrutiny of its environmental record.
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