CF0402 Caso Aracruz
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Casos FDC Copyright© 2004, Fundação Dom Cabral O CF0402 – June, 2004 ARACRUZ CELULOSE AND THE CONSTRUCTION OF THE LUCIANO VILLAS BOAS MACHADO BARGE-SHIP MARITIME TERMINAL Cláudio Bruzzi Boechat Nísia Duarte Werneck Letícia Miraglia Centro Alfa – Campus Aloysio Faria Av. Princesa Diana, 760 – Alphaville Lagoa dos Ingleses 34000-000 – Nova Lima, MG – Brasil Tel.: 55 31 3589-7377 Fax: 55 31 3589-7402 PROIBIDAe-mail: A [email protected] REPRODUÇÃ – www.fdc.org.br Aracruz Celulose and the construction of the Luciano Villas Boas Machado Barge-Ship Maritime Terminal ARACRUZ CELULOSE AND THE CONSTRUCTION OF THE LUCIANO VILLAS BOAS MACHADO BARGE-SHIP MARITIME TERMINAL* CASE ABSTRACT opposing opinion camps: for some, the news brought hopes that the city – once one of the The case discussed here involves events related most important towns in the southern to the project of a maritime terminal on the portion of the state – would resume growing; coast of the northeastern Brazilian state of for others, there was a concern that the new Bahia. The region where it was to be built is company would negatively impact the very close to a National Park comprising islands region's natural environment – among the with reefs, natural pools and vast sea life. wealthiest in Brazil. Annually, from June to December, the area is visited by "jubarte" (humpback) whales, The city is located quite near the Abrolhos which come from Antarctica seeking warmer Marine National Park, a set of five islands with waters to reproduce. reefs, natural pools and abundant sea fauna. Every year, humpback whales, leaving The company responsible for the project is Antarctica to seek warmer waters where they Aracruz Celulose, worldwide leader in the can breed, visit the area. production of bleached eucalyptus pulp sold worldwide to manufacturers of tissue, To Aracruz, the maritime terminal project printing and writing, and specialty papers. would represent reduced expenses with Fearing the environmental risks involved in freight. The local community would benefit this case, the company developed different from the creation of some 300 new jobs during activities designed to avoid or at least construction phase, and nearly 600 direct and minimize the possible impacts. Otherwise, indirect- jobs upon the startup of operations. the decision already had been taken: the Furthermore, heavy truck traffic would be project wouldn't leave the drawing board. reduced on roads between Bahia and Espírito Santo, where the company's pulp mill is The case addresses the 7th principle of the located. But the US$51 million investment United Nations Global Compact risked never actually materializing, if ("precautionary approach"). environmental threats were to be confirmed. What could be done in order to determine the true extent of environmental risks? Was it I - INTRODUCTION possible to prevent or minimize them? What should the company do in order to bring the When Aracruz Celulose announced the community into the discussion process? If construction of a maritime terminal in locals could not be persuaded, even with the Caravelas, Bahia, the population split into two * Cláudio Bruzzi Boechat, Associate Professor FDC; Nísia Duarte Werneck, Researcher FDC; Letícia Miraglia, Assistant Researcher FDC, developed this case sponsored by Aracruz Celulose, based on data collected from the business reality and for exclusive use as didactic material and as the basis for class discussion rather than to illustrate either effective or ineffecitve handling of an administrative situation. Copyright© 2004, Fundação Dom Cabral. To order copies or request permission to reproduce materials, call 55 31 3589-7250 or e-mail: [email protected]. This publication may not be reproduced without the permission of FDC. 1 Casos FDC – CF 0402 required licenses being obtained, would it be producer. The new Veracel pulp mill is worthwhile building the terminal at all? scheduled to start operations in 2005, with the capacity to produce 900,000 tons/year of It was thus, with so many questions to be bleached eucalyptus pulp. faced, that Aracruz started its work in Caravelas. The first people in charge of Aracruz Celulose's forest areas, located in the answering the questions were Forest Manager Brazilian states of Espírito Santo, Minas Gerais, Tadeu Mussi de Andrade, responsible for the Bahia and Rio Grande do Sul, cover a total technical and financial feasibility studies, and 363,000 hectares. Of these, 242,000 are Transport and Wood Handling Manager Fábio destined for eucalyptus plantations, while Velloso; they began in 1998 by conducting 121,000 are covered by native forests owned reconnaissance in the small Bahian town. by the company, respecting an internal policy With the studies approved by the Aracruz of maintaining one hectare of native forest for shareholders in November 2001, each two hectares of eucalyptus plantations. Environmental and Industrial Safety Manager Alberto Carvalho de Oliveira Júnior and Ownership control is exercised by the Environmental and Corporate Relations Lorentzen, Safra and Votorantim groups, Director Carlos Alberto Roxo initiated work holding 28% of common shares each, and by to obtain the environmental licence. the BNDES (National Bank for Economic and Social Development) with a 12.5% stake. The company's preferred shares - representing more than 50% of the total shares - are negotiated II – THE COMPANY on the São Paulo, New York and Madrid stock exchanges. Aracruz Celulose (www.aracruz.com.br) is the world leader in the production of bleached Being located in Brazil constitutes a eucalyptus pulp, sold worldwide to competitive advantage for Aracruz. The manufacturers of tissue, printing and writing, country is responsible for more than 50% of and specialty papers. It produces around 20% the bleached eucalyptus pulp produced in the of the world's eucalyptus pulp. About 95% world. And its importance on that market of all that the company produces is exported tends to grow because the productivity of to countries in Europe, North America, Latin tropical forests is significantly higher than tree America and Asia. growth in the northern hemisphere. Comprising three production lines, its manufacturing complex located in Barra do Riacho (Espírito Santo State) is the world's ARACRUZ AND THE ENVIRONMENT largest single site pulp facility, with capacity to produce 2,000,000 tons/year. The Guaíba The world demand for paper is growing. The (Rio Grande do Sul State) unit is responsible production is made with wood. In the for 400,000 tons/year of the company's overall northern hemisphere, native forests are capacity. Aracruz Produtos de Madeira, a normally used to produce pulp, while in Brazil high-tech sawmill dedicated to the industry uses plantation lumber manufacturing solid wood products, located exclusively. The eucalyptus, due to its fast in Nova Viçosa (Bahia State), and the growth, has always aroused the interest of maritime terminals of Portocel (ES) and companies, but initially it was used only as a Caravelas (BA) complete the company's secondary fiber in paper production. Aracruz production system. The company also has a developed the technology that made feasible 50% ownership stake in Veracel Celulose, the commercial growth of eucalyptus for the which is being built in Eunápolis, Southern production of pulp used on the manufacture Bahia, in partnership with Swedish-Finnish of premium paper. group Stora Enso, the world's largest paper 2 Aracruz Celulose and the construction of the Luciano Villas Boas Machado Barge-Ship Maritime Terminal Because of the high demand of wood and early an Odor Perception Network program, it wood management technologies, the pulp controls gaseous emissions from the mill with industry had a bumpy relationship with help from local dwellers living in areas distant environmentalists. The development of new up to 70 km from the manufacturing site. wood handling and monitoring techniques Further actions are taken to prevent and contributed to a more productive dialogue. control atmospheric emissions, effluent Added to this was a growing awareness of discharges and waste generation, in addition companies about their impact and the need to environmental education activities. to minimize it. According to Aracruz Celulose's Corporate Communication Manager, Luiz Fernando Brandão, the company's challenge is to "be as big as its III – THE ARACRUZ EXPERIENCE IN customers," supporting their growth and CARAVELAS always "supplying the market from sustainably managed forests." We arrived at Caravelas with the mission to get to know and report Aracruz Celulose's Aracruz's Environmental Management experience in the city both before and during System is certified by ISO 14001. The the construction of the maritime terminal. We certificate was achieved in 1999 and sustained were to begin by interviewing Mr. Alberto ever since. In addition to maintaining one Carvalho de Oliveira Filho, the company's hectare of native forest area for each two Industrial Safety and Environmental Manager, hectares planted with eucalyptus, the who had experienced first hand the port company runs biodiversity monitoring implementation process. projects on its reserves. Moreover, since 1993 it has been studying the relationship between "The person who actually had the insight about eucalyptus plantations and the regional this place was Mr. Lorentzen, a great leader and environment, under its Watershed Project. one of the best environmentalists I've ever met," he said, praising one of the company's In the last ten years, investments made in shareholders. "Mill A was built in 1978 from a state-of-the-art equipment and technologies perspective of sustainable development, at a have enabled Aracruz to achieve significant time when few people even knew what that improvement in key indicators of meant. That was a major advance and all eco-efficiency in the production of pulp. The thanks to him. He is often on the mill floor, he company uses steam generated from the knows the engineers well, he has been the burning of eucalyptus and industrial process Chairman of the Board for years, and he's indeed waste as fuel, and it is self-sufficient in electric a man with a broad vision," he proceeded.