(Photo: Marcos Pereda, chairman of Grupo Bermejo, in the LIDE agribusiness summit)

Buenos Aires. This Thursday, October 18th, LIDE Argentina, an association formed by leaders of largest local companies, celebrated its annual agribusiness meeting with the presence of prominent businessmen like Gustavo Grobocopatel (CEO of Grupo Los Grobo), Ezequiel Garbers (Adecoagro, farming and dairy), Joaquin de Grazia (Granja Tres Arroyos, poultry production), Pablo Paladini (Frigorífico Paladini, pork), Martin Constantini (Frigorífico Rioplatense, beef) and Marcos Pereda (Grupo Bermejo, livestock, farming and forestry).

The eFarmNewsAr.com was a media sponsor of the summit in association with RIA Consultores, our mothership, and we assisted to the presentations. In this occasion, we consider as relevant to comment the Marcos Pereda’s talking on the forestry situation in Argentina.

He said that there are 1.3 million hectares of planted forest in the country, mainly eucalyptus and pinus, and in the Mesopotamia region (Entre Ríos, Corrientes and Misiones provinces). Mr. Pereda said that the country has a high productivity forest rate; it demands 9 years from planting to cutting, one year more than in Brazil but a year minus than in Uruguay.

But there are not industries in Argentina, basically cellulose plants, as there are in these two countries. “Today, Brazil, Uruguay and Chile provide 30% of the world cellulose exports and Argentina could be in this selected countries group” Mr. Pereda explained to the audience.

The lack of cellulose industries in the country are leading to an unusual situation: while annual wood production is estimated 20 million cubic meters, half of them is leaving in the trees because there is not processing capacity. At the same time, Argentina imports paper and has a foreign commercial deficit of US$600 million due to this lack of industrial capacity.

“It is reasonable to have 4 million hectares of planted forest in the country, but we would need between four to six cellulose plants with a million tons per year of capacity. Currently, with 1.3 million hectares yet we need two plants as Uruguay have. Think about this: each plant generates 1.5 billion dollars of annual revenues; this has a great impact on the local economies”, Mr. Pereda opines.

Pereda, chairman of the Grupo Bermejo, explained that due to the wood tonne has a low price, freight cost has a huge impact on the business profitability and it is absolutely necessary that it be processed in the origin. He added that the local forestry industry is working with governmental branches to create a business plan to 2030, and develop a competitive cluster.

After its lecture, www.eFarmNewsAr.com asked Mr. Pereda why there was no investment in the cellulose industry in Argentina. He observed that these investments required around US$1.5 billion per plant, and that similar investment needs a juridic and legal framework that provides certainty to the investors. “Actually, there is a restriction with the Land Act, that impedes to foreign investors to access to the landowning, a basic condition to analyses seriously a cellulose investment”, Mr. Pereda answered.

Contact Marcos Pereda: marcos@grupobermejo.com.ar