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I UNITED NATIONS INDUSTRIAI I »trtmtuct | IHMI HRUL NO I TAMII DKVFI.OFMh % r ORGANIZATION 4^4"- July 20, 197? K-1TJA 07 ; ILO! Rev. November 10, 1972 I < » Rev. March 29, 1973 ; t II ¿¿?s/ J isif} ¡I FS Ï. •r U PRELIMINARY STUDY ON THE INDUSTRIAL UTILIZATION OF BAGASSE IN THE PROVINCE OF TUCUMAN H ARGENTINA

II UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION i VIENNA, AUSTRIA

\\ I!

• • sí * S STADLER HURTER LIMITED

Englnt«r* - Designar* - Consultane* il ei 1501 St. Catherin* Street Weat s * Montreal 107, P.Q. o î Canada 11 © !

R-193A/07/3101 !l •MI.COMUITANT'

I ' ACKNOWLEDGMENTS

Stadler Hurt er Linited wishes to exprest appreciation

.' t\ to the following groupa and individuala whose participation

and contributions of time, knowledge and experience facilitated

performance of the work: I! - The Government of Argentina, Dr. Ernesto Juan Pare liada, v Ministro de Industria y Minería de la Nación. Operativo Tucumán, Ingeniero Roberto J. Alvarez, Coordi- -i nador General para la Transformación de la Provincia

de Tucumán.

- The Government of the Province of Tucumán i i Ingeniero Agrónomo Juan Luis Perez Albert , Secretarlo de Estado de Comercio, Industria y Minería de la

Provincia de Tucumán. '!! I I! Ingeniero Agrónomo José* Ploper, Secretario de Eatado de Agricultura y Genaderia de la Provincia de Tucuman.

;! - United Nations Development Program, Buenos Aires, Dr.

Miguel Albornos, Resident Representative of UNDP for

Argentina and Mr. Paul Oeinaki, Deputy Representative. l! There were of course many other associations, government

.'! agencies, and staff personnel, too numerous to mention, who also

rendered great aes 1st ance and to these also wa express our thanks. ÎI I Btméii amiti R-193A/07/3101 I Ü BMWHII . CONIMTAMTI V I ;j In parformane« of tha neceaaary investigations, particularly í in tha acquisition and avaluación of Information cf aaaantlally Argant ina natura, Stad lar Hurtar waa capably aaalated by tha

firs of COARA Conaultoraa Asociados, Buanos Airas. The knowledge

and experience of thia firm concerning national circumstances

and procedures contributed greatly In maintaining Argentine

perspective and in carrying out the study in accordance with

it conditions and requirements of particular significance to

Argentina. Tha validity of tha report an-, ita conclusions must

be attributed In large part to tha participation of this national

firm and the competence of its ataff members and specialist

aaaociates. 11

I I ;!

( i cu I UNITED NATIONS INDUSTRIAL mrcMactf «Ml • s MO. MO I V: DEVELOPMENT ORGANIZATION ¡Ì -Jidjfm. 1972.... : R-193A 0"» ¡3101 ti Rev. November IO, 1972 **<• 1 ">' vil > « i; ; i TABLE OF CONTENTS ij Page» A. INTRODUCTION A'l-A/f il il A.l Contract and Parties Involved A/1 A.2 Background Information A/l A. 3 Aim of the Study and Scope of the Work A/4 A.4 Evaluation of Study Resulta A/6 1 • s • li SUMMARY Of CONCLUSIONS AND RECOMMENDATIONS B/i-B/3

B.l Conclusions 3/1 B.2 Recommandât ione a/3

ïï MARKET SURVEY AND ANALYSIS C/l-C/44

C.I General „ c/i ! C.2 Historical Data C/17 C.3 Market Projection C/21 C.4 Miscellaneous C/32 C.5 Discussion and Conclusions C/35 I C.6 Definition of Cost Models C/42 I AVAILABILITY Or BAGASSE D/l-D/.0

D. 1 General D/l I D.2 Bagasse D/5 OTHER RAW MATERIALS - AVAILABILITY AND COSTS E/l-E/6 I îl E.l Chemicals E/l « « E.2 ruel £/3 ! ïî E.3 Long ribre Pulp E/4 E.4 Vaste Papar .» E/5

I is SERVICES - AVAILABILITY AMD COSTS F/1-r/ö II r.l Water jr/1 r.2 Power y/1 Í • < Si P. 3 Transportation p/5 t il

• I Mimait Mwutmr ••rimaci IMO«! H>I>L UNIDO MO. I M> lì L ; I ¡Ì July 20, 1972 R-193A 07 3101 'il vii - TABLE OF CONTENTS- (Cont'd)

; i Pages f ilI G. LABOUR AND MANAGEMENT G/l-G/21

H G.1 Organisation G/l G.2 Personnel Requirements and Cost . G/l G.3 Personnel Availability C/5 G.4 Training G/8 G.5 Accommodation and Transportât ion G/li G.6 Management Contract G/l1

H. PAPER MILL LOCATION ALTERNATIVES H/l-H/10

-1 H.l General H/l H.2 Discussion . H/2

• I H. 3 Conclusions H/8

SELECTION OF PROCESS I/1-I/43

1.1 Introduci ion 1/1 1.2 Bagasse Deplthing, Handling, Transportation and St orage 1/8 I 1.3 Pulping Process 1/33 1.4 Préparât ion and Recovery of Chemicals 1/36 1.5 Pulping Yields 1/42 I 1.6 Chemical Requirements 1/42 1.7 Recoramendat ions 1/43

I PAPER MACHINES J/l-J/9 ; • • ; J.l General J/1 t J.2 Proposed Paper Machines J/3 J.3 Proposed Paper Furnishes J/4 J.4 Pulp Requirements , J/7 u J.5 Papermaking Che-nical Requirements J/9 St ;: BAGASSE REQUIREMENTS K/l-K/7 [ it •5 K. 1 IntroductIon K/l K.2 Deplthing Loase« K/l [ a < K.3 Pulping Loss K/5 Ü K.4 Summary of Loases and Bagasse Requirements for Pulp f H FroduccIon K/5 I MUélt MmrHr UNIDO M>IM«CI ; IP.MI I M*l»l. tNS*OTt. . CONSUMANTI MO MO. Í MO 0»T« - —f -- 4 4 - I ;r July 20, 1972 : R-193A 07 3101 it "•• lli°'vll i « I r, TABLE OF CONTENTS- (Cont'd) : i I is Pages L. COST OK BAGASSE .L/l-L/8 Í III« L.l General j#^ !! L.2 Discussion L/2

DESCRIPTION OF PROPOSED MILLS M/1 -M/19

M. 1 General M/^ M.2 Deplthing Installations at Sugar Mills M/2 ï! M. 3 Depithing Installations ar Paper Mill M/5 M. 4 Sequence of Opérât Ion M/8 Sí CAPITAL COSTS N/1-N/19 -1

N.l General Ny^

N.2 Cost Est lautet N/9 N.3 Foreign Exchange Requirement.' N/9 t N.4 Time Schedule N/ll Í 0. MANUFACTURING COSTS 0/1-0/10 0.1 General 0/1 É 0.2 Variable and Fixed Costs 0/1 I 0.3 Costs of Production 0/4 •S Í p. FINANCIAL AND ECONOMIC ANALYSIS P/l-P/ l'V Es P.l Tables P/l 5? P.2 Methods and Assumptions p/i Í U P.3 Analysis # p/5 P.4 Balance of Payments Benefits • » P/6 Q. DEVELOPMENT PROGRAMS Q/l-Q/2

! •; R. IMPLEMENTATION OF PROJECTS R/l-R/2

R.l General si R/l R.2 Formation of Company R/2 a « R.3 Selection of Consultant« t R/3 R.4 Preparatiti of a Definitive Feasibility Study ...!..'.] R/6 H R.5 Financing the Project R/7

R.6 Method of Contracting " R/15 R.7 Conclusions R/24 I Btmélmx Mnrfr •triMMC* INOII «C*IAL .COMMUTANTI UNI no i% 4 July 20, 1972 R-193A 07 3101

»»•• v o» v i i

t » ¡; ; i - TABLES - 1! II NUMBER DESCRIPTION PAGE

I-C Historical Apparent Consumption C/20

2-C Historical Data - GNP and Population C/20

3-C Apparent Consumption Adjusted hy Promedios Móviles C/23

4-C Population Adjusted by Promedios Móviles C/24

5-C Annual Apparent per Capita Consumption C/24 H 6-C Coefficient of Elasticity - Corrugating Medium and Llnerboard C/26

7-C Demand Projections C/29

8-C Unsatisfied Demand C/31

1-D Moist Bagasse Used as Fuel in Tucuman D/6 ! 2-D Sugar Production in Argentina, Imports, Exports, Consumption, and Stocks D/7 h 3-D Sugar Production in the Province of Tucuman D/8

s;¡s 4-D Moist Bagasse Produced in the Province of »! Tucuman D/9

1-E Other Raw Materials Availability and Cost E/2 ïï .: is »! 1-F Cross Investment Return on Generated vs Purchased Power r/4

o« l| lì it ® I UNIDO iiriMNCi ! iMOti ¡ «m AL ITAMI MO. [ MO j NO.

I July 20, 1972 R-193A 07 , 3101 p*.f.f vi or vu

I • < - TABLES- (Cont'd) f ii NUMBER DESCRIPTION PAGE 1 -G Coat of Expatriate Assistance (Model I) G/13

III« 2 -G Coati of Expatriate Assistance (Modela II & III) G/14 u;r 3 -G Head Office Expenae G/15

4 -G Coat of Mill Adminiatrative Peraonnel G/16

H 5 -G Coat of Operating Peraonnel G/18

6 -G Cost of Repair and Maintenance Peraonnel G/19

7 -G Ü Suanary of Arger.Une Peraonnel and Annual Coats G/20

l-H Annual Tonnages Whole Meist (501) Bagasse t Produced H/3

I 1-1 Chemical Coats 1/5

2-1 Capital Costa of Complete Recovery Systems 1/40 ( l\ 3-1 Chemical Consumptions per O.D. Ton Pulp 1/43

I fi! : n 1-J Standard Weighta and Speeda for Production I of Corrugating Medium and Linerboard J/2 2-J Paper Machine Major Components J/5

I 3-J O.D. Paper Furnish Requirements per A.D. Ton lì Pulp J/7 il 4-J Annual 0.0. Preparation Requirements J/8 I 5-J Annual Papermaking Chemical Requirements J/9 il 1-K Annual Bagasse Requirements K/7 I «s Î I tlméJt Mmtfr IttriftlNCI INDI» • •»•• AL UNIDO NO . NO NO •MWMMU . COMMUANTS »Tl - j ---<-• I July 20, 1972 R-193A 07 3101 "•« vif" vii f > • • TABLES- (Cont'd) S J ; 1 I! NUMBER DESCRIPTION PAGE " i m i lì 1-L Estimated Costi of Hoist Depithed Bagasse «: for Various Mills L/8 •i. ;

îï l-N Model I - Summary of Direct Capital Costs N/12

î • 2-N Model II - Summary of Direct Capital Costs N/U • f• V. 3-N Model III - Summary of Direct Capital Costs N/16 i - 4-N Models I, II & III - Summary of Indirect Capital Requirements N/16

î s 1-0 Model I - Manufacturing Coats 0/5

î?• m 2-0 Model II - Manufacturing Costs 0/7 I î « S • S; 3-0 Model III - Manufacturing Costs 0/9

îï «. a ° 1-P Model I - Income Statement Projection P/9 I t\' • s; Model I - Resume of Financial Appraisal P/10 • « 2-P is r » I î : 3-P Model II - Incorni: Statement Projection P/ll ;s • a Model II - Resume of Financial Appraisal P/12 • ; 4-P I sí *S 5-P Model III - Income Statement Projection P/13 •! •; ¡5 6-P Model III - Flow of Funda Projection P/K M I!

S!i t ® I f MMUMT Mmrtmr ; • •MMIfCa INDU | MIIIAL MO HO MO I ii o»rt ' July 20, 1972 ¡î R-lTiA 07 L 3101 is Rev November 10, 1972 »« A/1 I í « PREtIMINARY ÌTUDY ON THE INDUSTRIAL UTILIZATION OF BAGASSE IN THE PROVINCE OF TUCUMAN - ARGENTINA I IS ii INTRODUCTION i i A 1 Contract and Partie» Involved Having received from the Government of Argentina a request -î s: for assistance In administration of a study, m the integral Si n Industrial utilisation of bagasse In Tucumán province, the î' » •• iî United Nations Industrial Development Organization issued an

international tender call for proposals for the preparation of

a study.

Subsequent evaluation of submissions received resulted in

award of the study to Stadler Hurter Limited, Montreal, Canada, il and a contract (UNIDO No 71'S3) for performance of the

I lì necessary investigations was accordingly effected between UNTDO

and Stadler Hurter Limited. By prearrangement, Stadler Hurter I ti !S • • retained the Argentine firm of COARA, Consultores Asociados, ¡S I Buenos Aires, to assist with tne work. *: I A. 2 Background Information M a) General î jl The province of Tucumán is located approximately due ?! Il North and 1200 km. from Buenos Aires and is among the group of "Northwest Provinces" whose development potential is II* • of current interest. The other provinces in the group are l g I it Mimait Murtmr H l4)A/0// f.Oi Pan« A/.' I il MMHII . CONIUITANTI I» Cat amare a, Salta, Jujuy, and Sam i»t • -Vi raster A Si I i¡ comprehensive program (NOA Program) twt ( it t >:<• region and thus improve it9 economic pout UJP reía' ive : ü -ti.ei II more advanced parts of Argentina. In the North-Sc/.th direct ion Tucumän lies completely

». between parallel 26* and parallel ¿8* So th whi.' render» r the climate suitable (though not ideal) for t tie cultivation Ú of sugar cane. Based on this agricultural resource a large

carte sugar industry has developed over the years to such an

extent that, despite the fact that it is the smallest of all t.e of the provinces of Argentina, Tucumán has in the past supplied

i up to 601, and at present contributes over 501 of sugar

produced in Argentina. Its sixteen operating sugar mills

I (or "Ingenios") In 1970 manufactured over 491,000 metru !! I tons of a national total of 908,000 tons of sugar. !S Due principally to the sub-tropical nature of the climate

the crushing season (zafra) in Tucumán is unfortunatsly

limited to less than four calender months. The general

economy of the province is in consequence adversely afíecte i

by th« problema arising from the relat ively short periods of jl saasonal productive activity and the corresponding lack of employment which exists between crushing seasons. i :i I ttméit MnwHr R 193A/07/3101 Page A/3 WMIIII . COMSUlTANTI I if J« b) jugar Cane Bagasse « - I i: When aunar cane ia crushed to extract the Juicea I containing the sugar a fibroua reeldue ia left which ia i! known aa augar cane bagaaae. Regarded essentially as waste, f thia material haa traditionally been utilized as the primary li fuel for generation of procesa heat requirements thus solving

the disposti problem in a manner which yields a benefit to in. !l the overall economy of sugar production. Since, on a dry haaia, the ratio of bagaaae to sugar in Tucuraan ie approximately U 51 1.5 : 1 It is evident that large quantities are produced and 1 Is burnt in th« Ingenlos of Tucumán. f ií In comparatively recent tImea a number of potentially i mora profitable waye in which augar cane bagasse can be

utilised hava baen developed and implemented in many augar I producing areaa. Bagaaae being essentially fibrous in nature • theaa developments generally have been oriented towards

I manufacture or substitution of exiating products which use !< I cellulose fibre aa the baaic raw material although other I applicationa have alao been found. Since th« bagasse which ia generated représenta a I s: convenient, reliable, economical and readily ava i labia fuel I II for the augar mill bollara, it ia obvioua that, if it is to ba diverted for other purposea, an acceptable eubatltute I f !l I is Muait Mwr*mg R-193A/07/J101 - Page A/4 I «Wmil» . COM!UlTAMTI fuel 01 at least equally desirable characteristics must Hi be provided. The availability of auch alternativa fuel í !i la the fundamental and major factor in determining the coat of the bagasse and, therefore, the practicability of

utilizing it for establ1 aliment of other industries.

The existence of an adequate supply of natural gas li and a conveniently located distribution aystem in Tucuman «I should eliminate any problem with regard to substitute

Í } it fuel. H i w A-3 Aim of the Study end Scope of the Work Pro« the terns of reference in the Contract and pertinent

I ¡ information in other documents r'.ie aim of the study, in broad

I definition, ties been interpreted to be to determine the manner in 1 Si which the bagasse from the ingenios of Tucuman cat. most effect ively Hi be utilised to improve the economy of Argentina in general and conditions In the province of Tucuman In particular.

?« The acope of the work hat eccordingly oeen related to this I concept and the study haa been developed to Indicate, technically, I financially end eoclally, the most advantageous course along which the industrialization of bagasse should be directed and, at the

I i! same time, the aspects which would merit exploration in finer l detail through apecific feasibility studies i t i m R-193A/07/3101 - Page A/5 iitCONMTAjrre

Th« batic aesumptlon ha« baan made that in order to have a

significant economic effect on a national and provincial scale

the project» to be considered must be of substantial magnitude

and must use the largest possible quantities of the bagasse

available. For this reason, attention has been concentrated

on the possibilities of manufacturing pulp, paper, and board

products. Other types of product can be made from a bagasse

base but markets are very limited and the consumption of the

bagasse Is accordingly relatively minor. Conversely, the scale

and rate of development of psper and board products manufacture

«ire in general limited only Ly the continuous and rapid growth

of market demand or by the availability of the bagasse itself.

Progress in this type of industry has, mor e ver, accelerated

rapidly in the past two decades and bagasse-based pulp, paper

and board mills are presently operating profitably in many

parts of the world using proven and well-known technology.

In accordane« with the specification in the Contract and

th« above assumptions, cost models have been developed for small,

medium and large pulp and psper mills, the selection of the

relative capacities and the products to be manufactured being

baa«d generally on the indications of the market study and,

for the largest mill, the most economical availability of bagasse. I Mimait Murtt R-193A/07/3101 - Page A/6 I lì «"»MIHI . CONIMTANTS That« cost modelt (referred to In the report as Modal I,

I Modal II and Modal III) ara prasantad in adäquat* datall to Í parait valid comparisons to ba aada In rafarance to technical, economic, financial and social aspects.

The approximate timing of the first project haa been

'\ determined ard tra direction which future development should

follow haa miao been explored. Lacking information concerning

when or how much capital will ba available we can only speculate

as to which alternative might be selected for initial

implementation. Consequently, the planning of the overall 'Il development program can only be praeented on a contingency basis.

I Based on the results of the complete investigation,

conclusions have been stated and recommendations made.

A.4 IvUatlon of Study Results

Argentina, in common with moat Latin American nations, i I! haa traditionally had a rsther volatil; economy although, ill In a relativ« sansa, it has been mora stable than moat. Within I i the last two years, however, this condition haa datarioratad seriously to the point where, during 1971, the Argentine rate

I of inflation was among the highest in the world and little

indication of substantial improvement appears likely for 1972. I !! > il As a consequence of this rapid inflationary trend auch factors i !l • I - ì° **éli «Tarter R-193A/O7'3101 - Page A/7 •Unum . COMMT ANT<

•il as aalary and wag« ratas, product prices, costs of fuel and

power, foreign exchanga ratlos, etc., have been In a state of

constant flux during the period of the subject study, varying

not only in value but also according to different rates of

exchange. Unpredictable adjustments have thus been occurring :i at frequent and irregular Intervals and In almost all of the factors relevant to financial analysis.

Under such c lrc utas t «rices It has been considered Impractical

le to attempt analysis incorporating current figures a* they evolve. if t i| As the only practical alternative, all auch factors have there- fore been referred to their values in the last quarter of 1971. I ! The rata of exchange to be used for converting $• into US $ and vice versa presents particular problems. Not only has

Argentina currency bean subject to continuous change in value I lì referred to the US S, but the US $ Itself has recently been I devalued. For these reasons, the coaaaerclel rate of 5 $* per US $ which preceded Introduction of the financial rate on !» I September 19, 1971, has been used throughout the report. Since financial appraisal will apply to conditiona aa they

were at the reference period, later Interpretation will require » l! an analytical approach, exercise of eound Judgment, and a thorough knowledge of the changas which have subsequently occurred. If all

factors have inflated in proportionate ratio, the conclusions

i ! • I iS R-19JA/07/3101 - Paga A/8 I M . COMMUANTS darived in the report will remain valid. If, on the other hand,

I on« or Bore of the laportint valuae hat varied disproportionately, I tri« results of tha financial analyaia will have to ba adjusted f accordingly.

! I I t i I I I v I :! I F i! Ü 11 II fi !l I ftasfiar Mmrimr •I R-193A/07/31O1 Page 3/i •NtMIHt . CONSULTANTI I if I« SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS

I B. 1 Conclut lorn

Í (a) Por maximum effect on national and provincial economy,

0- only the largest possible projects should be considered is (b) Realistic estimât« of time required to implement a large project placea initiation of operation early 1977 and I! full product ion 1979

(c) Markst analysis and projections indicates substantial

it demand for printing and writing papers, tissue, sack, bag

and wrapper, llnerboard and corrugating medium.

Ml (d) Demand for llnerboard and corrugating medium is increasing

[ ! •ors rapidly than for other papers and manufacture

utilises maximum quantity of bagasse thus these are the l! products to be Investigated, I (•) Paper machinée trimming 3.2 matters and 5 matera will yield :• ì maximum flexibility and economy in conversion of products

t* to containerboard.

(f) Cost modela to be developed: í (1) 166 ADTD corrugating medium (11) 330 ADTD llnerboard

f ii (ill) 496 ADTD both products

<•) Bagasse produced in Tucuaín is more than adequate for two HI mills of the largest capacity. l i m I M Mêmélt Murfr K-193A/0./31O1 Page B/2 I il •NWMf HI . CONIUlTANTt I (h) Substitute fuel would be natural gas. (i) Chemlcala, water, power, and t ranaport at Ion facilities I are available In necessary quantities and at reasonable costs.

(J) Any project would employ mainly Argentine personnel but

some training in pulp and paper manufacture and temporary

assistane« frota foreign specialists will be required.

(k) Logical division of the province would be two tones - I«I1 If ont in th« North and the other In the South. Sufficient i bagasse will be available In either zone for supply of

th« largest siili considered. Indications art that coats I ii would be soaewtiat hlghtr in the Southern zone.

(1) The soda process would be the most suitable and economical 1 Si for manufacture of bagasse pulp. Handling transportation

and storage of bagasse would be in bulk futm, "!! I (•) Estimated total capital requirements (Direct, Indirect and Working capital) would be !»

! Model I - US $ 36,810,000 ($* 18A.050.OOO) I Model II - US $ 65,060,000 ($» 325,300,000) Model III - U« $ 91,800,000 ($* 459,000,000) r ! (n) Financial analysis Indicates Model II and Model III to be viable projects and about equally profitable. 1 ¡I Model I (corrugating medluaa only) is not viable under ui the conditions assuead for financial analysis. w I is ftaafi«xr JTwtor R-193A/O7/3101 Pag* B/j MMftMHI . CONIMTANTI

(o) Prograuaa tor futur« development would b« baaed on •I! Model II or Model III. Í (p/ There it no doubt that the bagaaae fron the augar tailla of Tucuain can ba utilised auch »or« profitably than at

praeant.

(q) A definitiva faaalblllty study auat ba atad« to parait I: a pac If le ealaction of tha projact to ba carrlad out. B.2 IllçaaajndAtlSDJ. !h (a) Thla raport ahowa daflnltaly poaltlva rasulta thua laaadlatc s* action ahould ba takan to lnltlata lapleaantatlon of Modal

i e. II or Modal III.

(b) In via« of tha rapidly changing condition of tha Argentina

aconoary during tha progress of tha atudy tha financial

ii analyaia should ba adjusted to präsent condition» to I verify that tha financial Indication» remain valid. (c) Tha regaining »taps to ba taken are outlined and explained

11: in Saction 1. ?»

;! i sl! 'J i il « I R-193A/0//J101 - Page C/l MWNIMI . COM.UtTANTI I i! C. MARKET SURVEY ANL ANALYSIS

I Cl SsMui i (a) Discussion of Product! that can be produced from Baiasse A wide range of pulp and paper producta can be made

entirely or largely from bagaaae and many are being produced

comaaerclally today. It must, however, alwaya be remembered

il that pulp produced from bagaaae la a ahort fibre pulp

rather almi lar in characterlatlea to hardwood kraft.

ir Conaequently it haa certain limitât Iona in ita applicationa

becauae of Ita )awar atrength properties. Short fibre pulps

ara wall aultad for the production of papera and boards i !i where high strength la not a prima requisite. Where high I strength Is required as In the case of wrapping, bag and sack papers, short fibre pulps cannot be used at all or

only In limited quantities if the highest grades of such I Ü»5 I papers are to be produced. ?» Countrlaa which have extensive resources of raw I Ü materials suitable for the production of short fibre pulp and limited availability of raw materials suitable for the

production of long fibre pulp tend to use substantially

! higher than normal proportions of short fibre pulp in their

papar products. While, from the end use point of view,

satisfactory paper products can be made in many cases, using

a major proportion of short fibre, the sale of most of these i il I BtméJi I I. COMMUTANTS R-193A/07/3101 - Page C/2

products is limited to the national market because, on a

quality basis, they could not compete abroad with equivalent i paper« utilizing a I igher proportion of long fibre pulp.

Therefore, in such nations, when considering the

manufacture of paper products utilizing largely bagasse

pulp, the papers and paperboards should be divided into two

categories - those which could possibly be exported, and i ¡u those which would be very difficult to sell anywhere but M 11 on the national market. In general, papers that are exported Internationally [ ! are standard grades produced In large quantities in

Integrated pulp and paper mills on large high speed paper 'il •achines at the lowest possible cost. Corrugating medium il! produced from bagasse Is fully equivalent In every respect to the best produced from wood and could certainly be

exported If markets can be found. Also, some of the lower •i grades of standard business bona] papers (mimeograph) and glassine can be produced in qualities equivalent to

international standards and might find a market abroad. i! The use of glassine in packaging is, however, declining as this paper is increasingly being replaced by plaatic

!! film.

• I 1 II •NMNMtl . COHIMTAMTI R-l9 3A./n7/-- ,)| Page C/t

Newsprint Is another possibility. The stutiy included

in Appendix I reproduces some conclusions Included In our

report of the "ESTUDIO DE INVERSION DE UNA PLANTA DE PAPEL

PRENSA (PAPEL PARA DIARIO)" prepared by our firm for the

Argentine Government in 1970. The production of newsprint I; fro» bagasse is still in a very early stage of development. i On the other hand, the national market for newsprint will i ¡! be completely covered with the projects for manufacture of Si it with poplar and willow from the Delta, which have

already started, according to the decision of the Argentine l i Government on the basis of the Investment Study for a a Newsprint Mill.

Mi However, if export of newsprint is to be considered,

the newsprint would have to be of a quality matching • i: International standards. To date any newsprint produced fron bagasse, while quite suitable as a substitute for 1 1 i standard wood pulp newsprint in protected markets, has I ¡I differed so obviiusly from standard newsprint in opacity, ink absorbency, printability and brightness that it could i: not be run mixed with newsprint from other sources without being very noticeable. Advertisers object rather strongly il! »• -• - • - ;i if their advertisements do not show up as well as those of m I ftarffer Mmrf, « CONIMIAMtl Ml K- iyjA/O/niOI - PflRe C/A I!) i other« In a newspaper Issue, This difficulty could of I ! course be overcome if publishers or markets could be found that would use only bagasse newsprint, but usually II publishers like to be free to purchase at the best price from several sources so that, in the end, the best way to li aaaure the possibility of export is to produce a product matching standard newsprint in appearance, printability

it and runabillty. i I All these reaaons make it impossible for us to recommend its «election for the bagasse plant. I ¡ In «ame instances where paper of internationally acceptable quality can be made using a high proportion of

«hort fibre pulp, other factors may limit the sile to local

or national market«. Sanitary ti««ue paper, for example, !! is bulky and chi« place« limitation on the distances over

which it can be shipped economically. Bond, book and

;! writing paper« are produced in a very large variety of

grade«, weight«, and finishes (it is not unusual for a

paper mill to produce 400 to 600 different grade«) and are

ordered by the customer in email lot« to precise

!! di % I

K-lyiA/07/jl01 Page C/'i 1 II. COMMUTANTI

1, spec li teat ion.'., wh >, h mak.es bales Mit tit nit beyond a

certain range. With minor exceptions s-th papers art- ili produced and sold in regional markets. Papers such as llnerboard, sack, bag and wrapping

paper, when made largely from bagasse are saleable only

on the national market. For these prud.uts high strengen

la required, and if these products are produced largely

from bagasse pulp the strength of papcis and boards

! produced is not great enough to make them acceptable on

1 the international market in competition with the same i products made from long fibre softwood pulps. i ¡i Bagasse pulp is not sold on the market in appreciable quantities. At present almost all bagasse pulp produced

«ii is used in integrated mills manufacturing paper as the

end product. However, as a market has developed for > i; hardwood pulps in recent years, it should be possible tu market bagasse pulp since its properties are similar to ( !i those of hardwood kraf t. i Only bleached bagasse market pulp can be considered. i The market for unbleached pulp of any kind is very small. The mills using unbleached pulp in large quantities are

those producing llnerboard, sack and'wrapping paper, for t m I if dit Mmrfg R-193A/07/3101 - Page C/6 •MMIIIt . CONtMTANTS I ;i which bagasse pulp is not wall suited, and in any case

such Bills almost invariably produce their own pulp in an

/ I Integrated operation. Corrugating medium can, of course,

il be produced fro« unbleached bagasse pulp, but it is always is produced in an integrated operation and consequently cannot be considered «• a market for unbleached pulp.

i; Bleached short fibred pulps are used extensively in .1 mills producing fine papers such aa bond, writing and white i» it printing papers, specialty papers, tissue paper and specialty

boards.

Bleached bagasse pulps are very similar in characteristics ( ii to bleached hardwood kraft pulps for which (in spite of the I generally depressed condition of the paper products industry),

there is an appreciable and Increasing demand on an inter-

I i! national basis. The marketing of hardwood pulps is, however,

well established and production facilities are in general

r1 being expanded with the increasing demand so that bleached i bagasse pulps would be placed in the position of breaking

Into an existing and highly competitive aituation. There

appears to be little doubt that such oagasse pulps could 1 li eventually capture a portion of the bleached short fibre l H pulp demand but sine« the product Is relatively new to 1 :i export markets the development of substantial sales potential

would be difficult. t !l w> I ?s MtméJmr Murfr R-193A/07/3101 - Page C/7 •NSWint . COMIUITANTI I M V Dissolving pulp, despite th« lnroadt made by plastics Ì h and other synthetic fibres and filme, le in continuing

E I demand for the production of rayon, tire co-d, celluloee il acetate, cellophene, CMC (Carboxy Methyl Celluloee) and nltrocelluloee. The market ie, however, currently depreeeed

and the rete of growth li email. Unlike peper pulp, fl^re

il length la of little or no importance In the ceee of dieeolvlng

pulp (In most epplicatione the pulp le actually chemically V le dleeolved), end it le the chemical and molecular properties that are of importance, hence dieeolvlng pulp may be produced

from abort or long fibred celluloeic raw materiale. s* I I The term "dieeolvlng pulp" le a generic name. There I ara many varletlae; each with properties to suit a particular

and product. Dieeolvlng pulp for the production of celluloee I acátate, for example, la quite different from that ueed for tha production of cellophane. And although dieeolvlng pulpe ! of eome typea can ba made economically from e perticular raw !»

;! material, it doaa not follow that all typea of dieeolvlng pulp can be made from the a erne raw material. Depending on

and uae, dieeolvlng pulpe vary in alpha celluloee content i; from 881 to 98.81 and In pentoaan content from 1 to a maximum of 51. There are aleo wide differencae in molecular

chain length and chain length uniformity, viecoalty, and

tolerance of impurities. i ii A I Î2 fteeffor Mmrti R-193A/07/3101 - Pâ«e C/8 I MMMMI . CONttHTANTS I No disiuviiK pulp it currently produced from baratte. I. There li, however, considerable publisned literatee on I laboratory ttudlet and tetti on the production of dissolving pulp fron bagasse by the kraft or toda proceea with acid,

•teas, or water prehydrolytts. The reaearch data available

la large i y of in exploratory nature and not all of tht pulp I! propart lea that are critical were evaluated Prom the data «I available It can be aeen that although it la readily potaible

I len to obtain a pulp with an alpha content well above the Minimum 1 requirements for the lowar gradea, the pentoaan content la I cloae to the «axlau« allowable for the loweat grade oi

I il dieeolving pulp. The pentotan content no doubt could be

decreased by more rigoroua prehydrolyalt at the expenae of ! yield, or by cold caustic extraction In the bleach plant,

I again at the axpanaa of yield, (plut a very high capital !! I I! coat). A lowar pentoaan content, however, in itself doea not necessarily «Man a satisfactory dissolving pulp. Mi Reactivity and chain length uniformity are critical factors Í i for aany applicai lona and, aa bagasse is a rather hetero- 1 ganous raw material, there are no doubt soma limitations i: Moreover, impurities In bagassa are high and whether thete I! can ba reduced to the tolerancaa required reaalns to be •rowan. m I fméli Mmrtf R Ì9 3A/0 7/31O1 - Pag« C/9 I •MWH . CONtUtTANTI I Baaed on the evaluation of the published data available, we believe it may be possible to produce the f lover grades of dissolving pulp suitable for the production of staple fibre viscose and perhaps cellophane. We believe il It would be impossible to produca acetate, polynoslc, super tira cord, and tire cord grade dissolving pulp from bagasse, I! and we greatly doubt that nitrating, CMC ur continuous fllaaant super viscose grades can be made from bagasse

Ivan In the caae of dissolving pulp for staple fibre viscose, SI considerably further research work Is required to definitely

prova the technical feasibility of the production of i H dissolving pulp from bagasse. We do not think that the production of dissolving pulp fron bagasse should be

Mi considered because of the high technical risk and the currently I II depressed market. i Particle board (aglomerado) and fibre-board can be produced from bagasse. Plants which have been built are, In

general, of relatively small capacity averaging about 50 tons/

day or 15,000 tons/year. For all intents and purposes, except

possibly In the wood-poor countries, the commercialisât ion i! of euch board has not yet made appreciable Inroads iato the potentiel particle and fibreboard applicai Iona. In the !! construction induatry, for Instance, which representa a

i ii • I is 9§méimr Inter R-193A/07/3101 - Page C/10 tHMHHI . COMUMTANTI I !! major source of demand for this type of material, wood

I baaed composition boards and plyvoods dominate the market. Í The products made from wood have superior strength, better dimensional stability, generally more rugged characteristics

and, in moat casts, lower overall coat.

Several Argentina construction firma stated that trey I! had made trials using bagasse particle board for formwork but had found it to be less economical than traditional Íl u wood-based materials. Bagassa particle boards and hardboards have In some

1 ! casas baen successfully used as filiar material for veneer I ¡I overlay in the manufacture of furniture, doors, decorative i ;i paneling, etc. This market, however, obviously has very limited scope. I n In their present form it is fait the* construction >* I board« from bagasse would ba limitad to national and even M regional markets because of cost and quality considerations t I and that before larger markets can ba captured they must break into the established trade in wood-based composition

boards and plywoods on the basis of superior quality and/or li lower prices. Continuous research and experimentation is in progress !! towards the development of more economical and better bonding

I !l • I Aarfter Murfr R-193A/07/3101 - Page C/ U •HI . CONIMIANTt I SI materials, mor« «fficltnt manufacturing processes and

I general overall Improvement in quality and cost. It is

forestan that bagasse construction board may eventually

be competitive at least with wood particle boards and

hardboards, and even with plywood, In national markets.

An interesting note is that during the period of this ii study negotiation was in progress towards the possibility of manufacturing some 10,000 tons/year of bagasse particle

it board at Ingenio Nuttorco in the province of Tucumán. The Ï i í I principal feature of the proposed product would be the use e. of a soya bean glue binder which has been developed through

government sponsored research and which shows promise of

Improved quality at reduced cost. The market for this

board is, however, expected to be confined to furniture

I 11 manufacture. Aside from paper and board, other potential uses for

i! bagasse have been, and are being, investigated. Among I 3 these the principal ones are furfural, activated carbon, yeast and animal fodder.

Recent studies by Stadler Harter reveal the following i: general information concerning these products: Furfural as, a chemical intermediate, Is used principally

for tetrahydrofuran which, to a large extent, is being replaced ' Il i i m I R-193A/07/31O1 - Page C/12 I I . COMtlMTANTf II by acetylene and fotmaldehyde. It la alio used to produce

I resins to be uaed as moulding powders, and In the production

of aaphaltlc battery cases, laminating varnlahea and

furfuryl alcohol. Until recently, it was used as raw material

for manufacture of adlponltrll« (for nylon 66). This .'I application has, however, almoat disappeared with the introduction of less costly ciclohexan« and butadeine.

The world demand is estimated at about 150,000 tons/year,

and production capacity at 180,000 tona/year. Approximately U 301 of the total demand Is supplied by the Quaker Oat a Co. i I Markets are principally in the U.S.A. and Europe and difficult I ¡ to enter. I Although no furfural is baing produced from bagaaae at prêtant it should be possible to make furfural from bagasse. I The process would consume approximately IS tons of O.D. ! I bagaaae par ton of furfural produced. The studies made on is the economica of producing furfural from bagaaae have shown

that it is at beat a marginal operation. ;! I Production of furfural from bagaaae pith, aa a by-product of paper manufacture, is questionable from a technical point I! of via« and alao not vary economical. Activatad carbon, or activated charcoal, is an amorphous

!! form of carbon which is traatad to praaent a very larga

aurfaea araa. It la porous in at rue ture and It la thia i ii m I m is tUält Iirtif B-193A/07/3101 - Pag* C/13 ««•Milli . CONIMTANTS

•3 character 1stU which provides Iti ability to absorb

gaset or vapours from gases or dispersed substances from

liquids.

1 « i! The major demand Is for use In sugar refining. Estimated quantity consulted by the Argentine susar industry

Is 2,000 tons/year maximum. It is quite Ilk«.y that this

consumption will decrease If recent technological developments

for reactivation are applied.

it Our atudlet have shown that )t Is unlikely that production I of activated carbon froa pith would be economical considering collection and transportation problems, the calorific value fc* Í ! of the pith, and the need for development of suitable technology. It la possible that production from whole

bagasse could be profitable provided that sufficient unsatisfied I il demand exists. Bagasse contains, together with other carbohydrates

I! which are reducible, 18-20% of pentosans, mainly xylose and ?» ;! di- and trl-sacharidea, which are readily fermentable to

yeaat. It would appear more practical, however, to utilice

•»lasses or molasses residues as a culture for yeaat l! production if the need for such manufacture is indicated i! Animal fodder has been, and la being, produced frost augar manufacture by-products, I.e. molasses and pith. i !i 0 I

• t. K-193A/07/3101 - Page C/ 1« SMSMIHt . COMMKTMm I ¡j The mo last«» ha* ex «lient nutritive value for cattle

but muet be mixed with pith to paraît the animal» to digest i ! It properly The pith exposai a large surface area and can abaorb up to thirty t lata a Ita weight A coswnon mixture Is

301 «tt separated pith and 101 of 80* Brlx molasse«, which

ia pallet liad for marketing

t.i: Tha aarket for auch fodder la usually of relatively

••all alia and such an enterprise would appear to be better ! u adaptad to exploitation by an individual Ingenio rather than

on a provincial basis.

The awntloned products and SOM atore minor ones such i lí as gardening auioh, chicken litter, etc. all present Halted 1 aarkets, Halted bagasse utilisation, and doubtful if not ii negative econoay.

I i¡ b) Froducts and Markets Studied

For reasons given in the discussion C.l.(a) aarket I Í ! pulp, dissolving pulp, furfural, actlvatad carbon, yeast, i ii anlaal fodder are not considered worth further study, and I the study has been 1 Laited to nine categories of paper, pulp and/or board products have been studied in detail in

! the aarket survey. Thesa are as follows : II - Frlnting and Writing (See also Appendix AX. 5 a) - Tissue and Su If it o (See also Appendix AX. S •)

- Fulp (See also Appendix AX.5 b) i ¡I ® I Itaeffar Mmrtmr R-19JA/07/3101 - Page C/1', I MWMIMI . CONIUITANM Sa.K, t)« » «tua wrapper (See also Appendix AX. > i) "» v S i I i! Llnerboard (See also Appendix AX.' e) I! - Corrugating medium (See also Appendix AJt. > e) - Particle board (See sl«o Appendix AX. S f)

- Hardboard (Flberboard) (See also Appendix AX.5 g)

- Newsprint (See also Appendix AX. bh)

î All nine of the products have been carefully Investigated !n. ì to determine historical apparent consumption and future growth i ï potential both on a national basis and for the LATTA Pact and Se s* other nations bordering on or near Argentina The results of i I» preliminary analysis Indicate that, in general, the LATTA I H natlone either have or will have sufficient productive I i' capacity to satisfy expanding market demand for most of the II products considered, or alternatively, that for products that I í¡ must be imported by these nations, Argentina would not be able to enter the markets on a competitive level with ! ¡I established suppliers. Considerations of export markets t lì have thus been eliminated. I The present internal situation la that, except for (' newsprint and long-fibre pulps, demand Is essentially í¡ satisfied by existing productive capacity. Preliminary projections indicate that Increase In demand for particle

!! board and flberboard will be relatively slow, and that, even

in 1979, unsatisfied demand will not be appreciable and will i li • I I I . COHfMTANTt R- 191A/07 /110I - Page C/Ih probably be supplied from existing sources. Consumption of

Í newsprint, of course, shows a continuously increasing trend r at a substantial growth rate. However, the technical inconvénients for ita production using bagasse as raw

material, and the fact that the Argentine Government is at

present taking positive action to start up newsprint plants li using willow and poplar from the Delta, to cover the total needs of the country, make us reject this type of paper aa

Ir a final product for the bagasse plant. s* [ ! Of the product* which have been inveatigated there remain only printing and writing papera, tissue, sack and 1 i beg papera, and llnerboerd and corrugating Medium. The indicated lncreaae In demand for these papers Is progressing

at a more or leaa rapid rate, particularly for the so-called

"industrial papers", i.e. sack, bag, wrapper, llnerboerd and !! corrugating medium.

The Information collected concerniag markets, and demand ¡I for all nine products, and pertinent economic and social statistics is presented in the Appendix for reference. The

remainder of this chapter, for the sake of brevity and li clarity, will analyze only those products which are of primary interest which are, as ment lone a* above: « IIk ;i - Printing and Writing papers

1 • Tissue MI m I R-193A/07/31O1 Page C/17 •MINIMI . COMtWTANTf I i Ì I Sack, Bag, and Wrapper Llnerboard and Corrugating Medium (*)

!! (*) Than ara considerad together because, being the component« of corrugated contalnerboarda, they are complementary to each other.

C.2 WUtortçal Dita

(a) itnuji I! The corteuaptlon of papar producta throughout the world J has maintained a continuously increasing trend throughout U •any dec ade a and, it appears, will continue to increase

in the foraaaeable future. The average overall Increase

in global demand for all papers haa been estimated at SX l li per year during the 1970'a. Being an average, this figure

i! varies over a wide range according to specific products and

different nations. Total demand for Latin America It Is

I ll expected will be higher than the average at 7.31 with Argentin« >* i Ü estimated at 71. Ctneral Indications are that world demand ?» for paper products of all kinds will have doubled within i the next 20 years. Im Argentina paper manufacture dates back to 1873,

making It one of the oldest established induatriea in the

nation. Development, however, has been generally limited to

satisfaction of internal demand and no appreciable export trade !! In paper haa developed. Mills are therefore of relatively

small capacity and specialised In the manufacture) of che noit I !l essential types of paper. The Industry as a whole haa a I IS Mimali Kmrtmr *5 R-193A/07/3101 - Page C/18 INWNIIII . COMMUTANTS I I I ! certain lack of flexibility to absorb major market fluctuations. Variation« either upward or downward can •;

have serious effect on the Industry as It presently

¡i exists. Q - \t The existing fibrous resources of the country, although

lacking the vast volume« of long fibre woods found in North

».i; America and the Scandinavian countries, have however been

exploited to only a minor extent up to the present.

I le (b) Apparent Consumption

In refsrence to statistics concerning historical

consumption of paper products in Argentina the interpretation i of recorded data and segregation according to individual j; products has been rendered most difficult due to differences

in the format used in classifying various types of paper

products anda tendency to include some products under !! irrelevant headings or «imply under "Other Papers". Each

!» official, snd presumably reliable, statistical «ource

;! appears to have it« own unique system of categorizing

paper products and quite often under similar headings data

from different source« «how grossly dissimilar figures.

For Instance, Ministry of Trade and Commerce table« include

"•ulfitos" under Kraft although sulfito, as the name implies

ha« little or nothing In common with kraft paper«. In l II w I te Mtméìf MwrHr R-193A/07/3101 - Page C/l9 •fe •MINIMI . CONIUITANTI i fi I recent years INDEC has been showing these two papers f separately but no indication is given as to how they were classified previously. Similarly the Ministry

records include Liner and Corrugating under Kraft

papers - a generally correct classification, but not

very useful when attempting to separate out data about

these specific papers.

As a consequence of this confusion in statistics Ir il from different sources It has been necessary to correlate [ the figures from relevant governmental agencies and Í industrial associations and to use judgement and reasoning in arriving at realistic estimates of consumption according I I to specific products. In some cases the figures which I li have been educed might, therefore, show appreciable .i differences when compared with those of other agencies

I or associations. Such differences are in most attributable !> I to lack of precise definition for the papers to be included in a given category with consequent inclusion of irrelevant l papera, and/or omission of types which properly fit into

the category.

l! The values for historical consumption shown in

!! Table 1-C (below) are considered to be reasonably accurate and realistic. i li li I 11 ftetffer Murfrr R-193A/07/3101 - Page C/20 i MWNIIII . CONSULTANTS Va

I TAB1.K ! »

HISTORICAL APPARENT CONSUMPTION (THOUSANDS OF TONS) ¡I Printing and Sack anc Linerboard and Year Writing Tissue Wrapper Corrugating Medium

1960 66.61 8.77 53.11 1961 95.03 14.44 78.86 1962 86.36 18.21 67.57 1963 78.13 13.78 65.62 1964 93.07 17.33 79.23 71.41 1965 110.90 23.07 106.04 55.52 1966 125.39 18.80 115.68 84.44 le 1967 98.96 22.19 100.67 107.48 1968 105.39 24.55 116.55 129.21 1969 104.24 31.32 130.63 141.60 1970 123.81 33.09 140.44 134.34 I II SOURCE: INDEC AND OTHER

(c) Popular. ion and Croat National Product

I Ü TABLE 2-C j I HISTORICAL DATA - GOT AND POPULATION

Population GNP Peaos Ley 1960 i ¡i Year (Thoua. of Inhab.) (000,000's, i 1960 20,669 10,063,4 1961 20,923 10,777,9 1962 21,180 10,596,8 1963 21,441 10,345,2 1964 21,705 11,422,0 1965 21,972 12,468,6 1966 22,242 12,559,2 Ml 1967 22,516 12,871,1 1968 22,793 13,464,9 1969 23,073 14,531,6 'I 1970 23,364 15,229,0 SOURCE: CIDIE on data from BCRA • I is ttmäJt MrnrH, R-193A/07/U01 Page C/2I I ISMS . COWSWtTANTI I T'lf t .ih l.i'• ! * iiuTi'5 f IT fulfil lat i on, which are obvie si» estimates, show a uniform Increase of «pprox

! L.2Ä per year. The accepted value for use In statistical

calculations has been taken as 1 5X, however, as used in

recent studies made by United Nations and Studies for

International Collaboration Bureau (Oficina de Estudios para i: X. la Colaboración Economica Internacional), and CEPAl., •I Analysis of GNP figures for the period 1960/70 shovs I it an avcragt increase In total GNP of 3.91 or 2,71 per capita,

referred to the value of the peso in 1960. I «. C.3 Market Projection

( (a) General

Many factors such as rate of Increase in literacy,

rate of Increase in Industrial development, rate of increase

II in disposable incóete, rate of increase in GNP, and rate of ;> El Increase in population can be entered into calculation ~>f

!' future demand or consumption. Of these, the two most

significant Indicators are rate of increase in GNP and rate

of increase In population and these are the values which

have been applied In projecting demand for the fevi

I i! categories of paper being studied here. [ i! Argentina has a high degree of literacy (921) so any Increase in this respect would be Insignificant. Rates ~>f ( ii i4M I II ttmëJf Inf«, R-193A/O7/3101 • Page 'J12 I i! •HI . CONIMI ANT« 1 1 Increati In industrial development and alta in disputable i incoi* are reflected In GNP, thus attempt» to apply these 1 other factors would needleaaly complicate projection

calculât lona.

Population Increate, for all practical purpoaet, la

considered to be l.5l/yr. and It not expected to change s I etgnifleant ly during the period ander atudy. ¡I The historical average rate of increase In GNP over the past tan yaara hat been 2.71 per capita (Appendix Page

AX/5). Tha future average rate of Increase in GNP hat been

estimated by COMADK (National Development Council) at

11 essentially 5.51 total or 4.01 par capita (CONADE Development

Plan 1970/74). The arithmetical average of the hlttorlcal

ii GMP per capita Increate of 2.71 and the Government agency »i estimate of 4.01 In future has thus been used as a reasonable • I! value for projection of future consumption, i.e. 3.351 GNP incraaae/yr Hi The way in which this figure it applied will be discussed subséquently in this chapter.

It should be noted that 1971 rste of increase in GNP

: vaa 2.41 but since last year was characterised by a very rapid inflationary trend this figure probably would have !! little significance over tha long term.

Fürth«r information ragardlng market information may be

found in Appendix Section AX. I, AX.2, AX. 3 and AX.4 I R-193A/O7/3101 - Page C/23 I i COMSIMTANTI (b) Promedio» Movi les I ti In order to reduce the effect of the normally large

fluctuât Ioni which Invariably are found in annual figures

the statistical device of "promedio« movile»" (literally

"moving average«") has been applied to historical dati

Successive five-year periodi have been averaged for historical i; apparent consumption and also, fr.r the purpose of maintaining uniformity, to population data. Since in the case of apparent r ir consumption many of the fluctuations are caused by inventory,

incomplete statistics or poor estimates, the figures derived

are essentially realistic and, because the averaging produces Í II a nor« uniform progression of consumption values, they are easier to work with for projection purposes.

Tables 3-C, and 4-C »how historical consumption and

i il population data adjusted by this method.

I TABLE 3-C 1 APPARENT CONSUMPTION ADJUSTED BY PROMEDIOS MÓVILES ¡1 (Thousands of Tons)

i ! Printing end Sack end Linerboatd and Years Writing Tissue I Wrapper Corrugating Medium i! 1960/64 83.84 14.51 68.88 1961/65 92.70 17.3* 79.46 1962/66 98.77 18.24 86.83 1963/67 101.29 19.03 93.44 1,964/68 106.74 21.19 103.42 89.61 1 1965/69 108.98 23.98 113.69 103.65 II 1966/70 111.55 25.99 120.57 119.41 í ii W SOURCE: Own Preparation I

is «tasti« Mmrfw R-193A/07/3101 - Pa ge C/2 4 I il aMSNNSMI . CONSMTAMT« I TABLE 4-C POPULATION ADJUSTED BY PROMEDIOS MÓVILES

{ (Thousands of Inhabitants)

1960/64 21.183,6 1961/65 21.444,2 Is 1962/66 21.708,0 1963/67 21.975,2 1964/68 22.245,6 1965/69 22.519,2 1966/70 22.743,6

! it (c) ?n CsDita Conjunction

Since GMP has been considered in (a) on a per capit a

!! basi Ls, Table 5-C (using promedios »oviles of historical

« commmption and population) shows average per capital i! comlumption for the four paper categories.

II TABLE 5-C ANMUAL APPARENT PER CAPITA CONSUMPTION

Print ing and Sack and Linerboard and !» Years Writing Tissu« Wrapper Corrugating Medium

;! 1960/64 3.95 0.68 3.25 1961/65 4.32 0.80 3.71 1962/66 4.55 0.84 3.99 1963/67 4.61 0.87 4.26 1964/68 4.80 0.95 4.64 4.03 1965/69 4.86 1.06 5.06 4.60 i! 1966/70 4.90 1.14 5.30 5.25

:• SOURCE : Own Preparation t f il • I R-193A/07/3101 - Page C/25 IS • COMMUTANTS 1 II 1 (d) Elaaticlty of Demand Referred to C*P 5 The elasticity of demand referred to GNP la the rate [ ( of lncreaae In dastard for a glvan product par IX lncreaae

I In GMP. Thus, dividing the avaraga percent Increase In 1 li per capita consumption derived fron figurée In Table 5-C by the hlatorlcal average lncreaae In GNP par capita (2.71)

the following elasticity coefficients nay be calculated:

Printing and Writing 1.37

Tleaua 3.33 St 1 Sack & Wrapper 3.16 iI, Linar and Corrugating 5.22 l il Tha elasticity coefficient of 5.22 for corrugating I ¡i medium and llnerboard, whan derived in thla manner, appears excessively high. The I demand Increase per year using

I this elaaticlty would be almost 19% which yields very large !! I and aiaoat incredible future demand quantities especially in the last few years of projection. Thla distortion is

I ;! probably caused partially by the shorter series of historical

data and partially by the rapid adoption of a relatively new

product at a rata which is not likely to continue. 'Il! If, aa shown below, tha coefficient of elaaticlty In I' this cas« is calculated using the historical figures from Tables 1-C and 2-C a more rational value la derived: w I

lì Mtméit Mmrfr R-193A/07/3LO1 Page C/26 I MWNIMl . COMUITANTI ¡i

TABLE 6 C

11 COEFFICIEOT OF ELASTICITY - CORRUGATING MEDIUM AND I.INERBOARLi

App. Cons. Populat ion Com/Cap Chang« (000'• of t oni ) (000'a) (Kg) (X)

1964 71.41 21,705 3.28 1965 55.52 21,972 2.52 (23.2) 1966 84.44 22,242 3.80 50.5 1967 107.48 22,516 4.78 25.8 1968 129.21 22,793 5.66 18.4 1969 141.60 23,073 6.15 8.65 V 1970 134.34 23,364 5.76 (6.35) \t Total 73.80 l li Average 12.301 Coefficient of Elasticity - ILi . 3.46 I il 3.66 "°t?- It la eat Ima tec that the average increaae in GNP per ! capita for the period 1964-1970 wou Id be In the order of 3.46t rather than the 2.71 uaed for the period I960 -70.

I II Check calculations of elaatlcity for the other three »* papera, made in the same manner as those In Table 6-C and

covering only the period from 1964-70, give the following

results:

Printing and Writing 1.31

Tissue 3.30

Sack and Wrapper 2.83

These values correspond «fell to those shown on paga !! C/Ï5 thus indicating that the elasticity of 3.46 for liner 11! I is ftaefJu R-193A/07/3101 - Page C/27 I II , CONS WtTANU i« I and corrugating would be more icunatr than that derived by the promedio raovll method (viz. 5.22) ii It la considered, however, that for printing and writing papers, tissue, and sack and wrapper, where the

historical eerles covers a longer period the original

method of computation would be somewhat more accurate.

The elasticity values to be used for projection would i:x.

thus be as follows:

it Printing and Writing 1.37) ) Tissue 3.33) See Pig» C/23 ) Sack and Wrapper 3.16)

l i Linar and Corrugating 3.46

! As additional Indication concerning the relative

validity of the projections shown in Table 7-C (below),

I l! tha projected figure« for Argentina In 1970 and 1979 relaie I to recorded Canadian consumption for the year 1970 as ?» follows: I Kg/Capita 1 of 1970 Cdn. Canada Argentina Consumption 1970 1970 1979 Arg.1970 Arg. 1979 ! Printing * Writing 30 4.9 7.8 16 26

25 ! Tissue 11 l.U 2.8 10

Wrapper fc Packaging 75 5.30 11.3 7 15

Linar fc Corrugating M 5.25 15.8 15 45 'I A 1

I IS ' t, R-19ÌA/07/Ì101 - Page c/?8 I • CONUHTANTI

it,1 I \¡ il Í , It li the Consultant's opinion that the above comparison with Canada lendi credane* io the

projected demand valúas which have been calculated

, li for Argentina. It appears reasonable to predict is that over a period of nine years the consumption •i In Argentina for the papers considered will lncrcaae In the proportiona Indicated under the heading le " X of 1970 Canadian Consumption".

i i <•) Projected Kate of Demand Increase Ml Using the pertinent factors thus far derived i the projected rat« of future demand Increase In il percent per year can be computed according to the I í! formula: I Estimated future rate of demand increase. GNPX elasticity and annual 1 Increase in I!« j! population I Ml M f ii © I iriMNCI IMDtl ••«'«! '• ' !iO I LTANTI July 2i'i, I1)12 R-19JA O? , i 101 Re v . Novf n be r 10 , i 9 7 2 '*" C/29 TABLE 7-C

DEMAND PROJECTIONS it il (Thou •ands c »f Tons) (*) Printing ind Sack and Liner and Ytar Writing Tlisue Wra ppe r Corrugating _- 1975 166.39 47.14 213.24 ¿65.41

i?'; 187.27 59.82 267.87 349.39 it 1979 210.77 75.91 336.50 449.74

1980 223.61 85.51 377.15 506.32

Í 1985 300.51 155.13 667.03 894.29

Batla of Projec- tion 123.81 25.99 120.57 119.41

Ilaat. coeff. 1.37 3.33 3.16 variée

Per capita GNP 3.35 3.35 3.35 3.35

il X Increate In pop. 1,5 1.5 1.5 1.5

GNP x Ela*t. coeff. • annual X Ine rea a* In ti pop. 6.09 12.65 12.08 18.99 ¡r

i; (*) Applying elasticity coefficient to the laat historical consumption for printing and writing and to the last proandlo •ovil of conauaptlon for the remaining papers, and the rate of ine rea a« of GNP resulting froa the arithmetical average of per capita historical GNP and that projected by CONADE H 4 1 Qj ) 1 R-193A/O7/3101 - Pag« C/30 i! II • CONSMrftMTI i (f) Unaatlafled Demand Iü The tormages shown in Table 7-C Indicate estimated total ! future demand for each of the paper products. In order to

í! arrive at figure« Indicative of mill capacities which would

be Installed it is necessary to deduct the portion of this

il future requirement which can be aupplied by operating mills

the idle manufacturing capacity which could be reactivated,

and alao any expansions of existing facilities or new mills

f which are planned for manufacture of any of the producta we íI U* are conaiderlng. 11! Present manufacturing capacitlea are a matter of record li and may be determined quite accurately. Estimation of the proportion of idle capacity which it might be possible to Mi reactivate la a somewhat more complicated matter since it la difficult to know without complete detalla juat how much of

auch capacity could be economically put Into operation and, 11: of that which could be started up again, the proportion which 1 might be applied to each product. Similarly, plans for 'i axpanaion or for new facllitlea can only be evaluated approximately from the point of view of which are moat likely

to go ahead, which are doubtful, and which might never be

reallted or may only be implemented aubsequent to the period •!! under consideration. The manner in which futura manufacturing capacity was

e a tima ted la diacuaaed in the Appendix and e a tima te a are

in • conaldared to be realistic. (Sub»Sac. AX. 17) ; I s o I —- ' - r~ " • T> 00 0 _ O •o î • L :- ki C o o f o - "1 £ in "t " s a IN IN 0 ki • < i O I ' it > £ O m ci ci Cl c» • T) m Cl TJ «J 0 ! : '7 c « kl T t . * W Ou c * ci Cl A" CN rvj CM IN O ^ o> -A r B. Ä * O 3 00 II

• -o Cl 0 o- ki e S m 00 0 :| <» » ao 00 = a ""' 0 Cl r^ s 1 M 5 & t a. ki * S Cl * * » ¿i m ki oo ao oo 00 \ U ft. •o o>1 8 ON Oi »1 o "- -* •"•' -* U <•> «A jf in Cl l ao S o o f>> 0 r» 0 CI 0 l * ** Ä

Q • T» 0 -a «»> «Í lA U Q w e in IN O o> in g ¿ e 0 O* m -i ! 1 Ci •-t M S A $ iH i 00 00 oo 1 S • TJ lA S U-l lA in M k> 0 O O O s •H 2 £ 3 H I & !! t-< » -o <» (M n H ao Oi Ml 3 r». » »ri «n m 5 -Í 4/1 r>" oo m r« Oi r» r-» •4 Jï O rv r» JI •H •«-i e CI (M i»» <« m C) «N i* £ O Í > «0 «M t 1• I at l-M «N Cl !! *| —i i kl in Ol O m o • r-. i o> 0^ Oi Ol _l 11 •» . *-' • "* Ûil • 91 M ¡i I I R-193A/07/3101 - Page C/ 32 I 'I MMMMI . COMMTANT1 i) Tabla 8-C (page C/31) ahowt estimated unsatisfied demand which may be expected to exlat at various times in the future.

The estimated 1979 tonnages of unsatisfied demand 'or

each product are those which have been used in determining

the alii capacities which could be installed for each of the •s four producta - assuming of course that no new facilities of which we have no knowledge at thla point would be brought ; i; ¡i into production. j i ¡i C.4 Ml seal lana pus 1 il (a) Papar Product Prices K In view of the ganarally public nature of market prices 1 II for paper producta in countries which have highly developed i papar Industrias it has been somewhat surprising to find chat, !! In Argentina, such Information Is not readily and freely 1 l! available. This situation, we believe, is temporary and has beer, cauaed by the rapid inflationary trend of the past few

11: years, but It has, nevertheless, introduced difficulty and !»1 'i complications Into the evaluation of projects proposed In this I I report. The costs of manufacturing In any country or for any » i! product are usually difficult to ascertain for legitimate business reasons but they can usually be approximated by !! Indirect methods. In this caae such Indirect methods had to be i applied to determine market prices. i il I MUdli Hmrfr R-193A/07/3101 - Page C/33 INWNIiat . CONSULTANTI i : The procedure used was Co determine the ratio of mark-up considered reasonable by paper suppliers and brokers

and to work backward from this to calculate the prices charged

by the manufacturers. The firms and individuals approached

proved most reluctant to reveal even "order of magnitude"

figures (presumably because such information might later be

detrimental to their own interests) and, it is suspected that

v in some cases information obtained was misleading. it It is felt however that analysis of information from a

number of sources combined with judgement as to the reliability

of each source has permitted reasonably accurate estimates

I il to be made. These are shown in Sub-Section AX.S of the ! Appendix and have been used in evaluating the financial

viability of proposed projects,

(b) Official Sources of Information and Statistical Data

Many agencies and associations have been quoted and

referred to in various parts of the report and the Appendix.

These arc listed below with abbreviations which have been I used. 1 Abbreviations

I- A.P.P.: Asociación de Pabricantes de Papel ALALC : Asociación Latlon-Ame ricana de Libre Comercio I ! BIRA - BND : Banco Industrial de la República Argentina - ;« Banco Nacional de Desarrollo B.C.R.A.: Banco Central de la República Argentina C.I.D.I.E.: Centro Internacional de Investigaciones Económi- cas

I !l • I

•Is t Mimélt Mmrfr R-L93A/07/3101 Page C/34 I wimnii. COMMUTANTI C. I.F.: Cost, Inaurane« and Freight r C.F.I.: Consejo Federal de Inversionea CONAOE: Conaejo Nacional de Desarrollo DENEI: Dirección Nacional de Eatadiatlca Industrial FOB: Free on Board INDEC - INEC: Instituto Nacional de Estadísticas y Censos N.U.: Naciones Unidas N.A.B. : Nomenclador Aduanero NABALALC: Nomenclador Aduanero de la Alale O.E.C.E.I.: Oflnclna Eatudtos para la Colaboración Economica Internacional P.B.I.: Producto Bruto Interno S.N.F.: Servicio Nacional Forestal

Sources of Information » Je s* Secretarla de Transportes, Ferrocarriles Argentinos il Asociación de Fabricantes de Papel I t.'i I lí Asociación La ti no-AJO« ri cans de Libre Comercio . ¡; Banco Nacional de Désarroila-Banco Industrial de la Rep. ¡i Argentina i il Banco Central de la República Argentina Centro Internacional de Investigaciones Económicas i Consejo Federal de Inversiones i ii Dirección Nacional de Estadísticas Industriales Instituto Nacional de Estadísticas y Censos ! i Ministerio de Comercio

Ministerio de Hacienda i i! !l Dirección Nacional de Aduanas i Centro Acucarero Argentino

Oficina de Estudios para la Colaboración Economica Internacio-

nal i !l írÜÍ. I IMUH JTwtar •.-193A/07/3101 - rage C/35 «•«Man* . cowwt urn I II I Servicio Nacional Porestal Ministerio de Agricultura y Ganadería da la Nación

I Gobiarno de Tueurnan

Centro Argentino Asucerero

Centro Argentino del Ceaento Portia id

.'I Federación de Obreroa y Eaplesdoj de la Industria del Papel,

lì Carton, Qulmlcoi y Afinei

Instituto Argentino de laclonallsaclon de Materia les ! it Agua y Energia Electrica, Kap re sa del Istado I ! Gas del Estado Centro de Eatudlo dal Traneporte

Asociación Mutual y Crealal de Transportadores da Carga de i ¡1 Tue untan I !l Federación Argentina de Entidades Eapretsrias del Autotranspor- te de Csrgaa I i! C.S Discussion and Conclusions (•) General

'i! •sfora additional discussion of the products vhich have i boon detailed above SOM consideration must first be given i il to the tlaa at which a project or projects basad cm this study could be put into operation. This is necessary in 'I! order to be able to Judge the magnitude of unsatl •fled deaand which will exist at that tlaa, and thus to know • LU capacity

limitations. t ;i • I R-193A/07/3101 - P.g* C/16 'i! i.comwmti ' ¡i Subsequent to accalcane* of the atudy report the principal i í addle lona 1 atapi to final laiplaMntatlon would be- - atudy of report data and formulation of deci alona

and policy concerning tha apaclfic project on which

tu concentrata future attention :i 1; - requeit for tandera for a definitive feaeiblitty 1 ¡ a tudy for the aalected project, aaeeeanent of i 'i aubalMlon and award of tha contract for tha i \i a feasibility «tudy i Î - performance of tha detallad atudy, evaluation of the 1 II conciliatone, dec la lona to proceed and determination of qualifying or Halting factors 1 i fonia ti on of a coapany 1 l! - arrangea«at of financing - engineering, construction and start-up of the mill 11¡ Tha period of tiae required to perfora «11 of theae V essential functions can be very Indefinite - dependant to a 'i'I great extent on the degree of urgency and priority accorded i by tha proaoters. Asaualng proapt attention and, to save time,

soas overlapping or "telescoping" of the various stages, it

Is eatlaated that tha earliest realistic date for coaaencemtnt

of operation for any project would be the beginning of 1977.

Dilatory action, indecleion, or general inattention could, i !l © I R-193A/O7/3101 - Page C/37 I • COMMUANT! III1

result in delays ««asurad in year« or aven completa lota U í of lntareat. However, on the aaaumptlon that all poaalble would be

dona to initiate the new Industry aa quickly as poaslble,

1977 has been assumed aa the first year of operation and, I! estimating two years to eliminate problema and achieve full anticipated efficiency, 1979 would be the flret year at

full rated production. le Unaatlafled demand and all other pertinent factors such as,

11 for instance, bagaaae availability, have therefore been pro- I ! jected to 1979 for the. initial project. It Is evident frasi above Table 8-C that profitable 1 li industries could possibly be Implemented based on the Manufacture of any of the products shown. In each case unsat- Ml isfied demand (1979) will be of appreciable magnitude and 11: calculated ratas of demand increase indicata fair-to-good l 3 futura potential. Thua, in order to select the.product or products which •

I will render optimum baneflta economically and socially, they

are discussed individually in the following paragraphs,

(b) Printing and Writing Papera

The estimated unsatisfied demand of 48,000 tons/yr is 1 I! well within the range for a potentially profitable enterprise. i ¡i m I «terffor attutar R-193A/O7/3101 - Page C/38 I WIMHII . CONIMTANTI

The firm of Ledenma S.A.A. I., for instance, has operated for I !! tome 7 years at a production rate of approx. 10,000 tons/yr.

and propoaea to more than double this production rate in the

next few yean.

The technology of manufacture for printing and

writing papers la, however, quite complex and the consumption

of bagasse (compared to the volumes available) would be

relatively small, It it 5< (c) Tissue 1 I The estimated unsatisfied a.. of 35,000 tons/yr. t. represents a large mill for manufacture of paper of thla type

I I and, quit« probably production of tissue on this scale could I I be a feasible and profitable business. It must be pointed out however that, even at a consumption of ?,5 kg/capita, such

a mill would supply the needs of over 1/2 of the population of i I! Argentina. As mentioned previsouly, because of Its bulky i li nature the shipment of tissue Is uneconomical beyond a i relatively short range thus it is usual to confine such r manufactura to relatively amali plants conveniently located near area« of population concentration. Tucuman unfortunately i i! Is some 1200 km from the largest population center (Buenos

Airas) and savings made possible by large scale production i !! i could conceivably be offset by marketing costs. a I is R- 193A/07/3101 page C / 39 I il I • COMMUANTS (d) Printing, Writing and Tissue - Combined I ! Combining production of these papers into one mill la another poaeihl Uty which might appear f'taible, I.e. production

of 83,000 T/yr. While thay are quite similar in the pulp

production procaaa and in the fact that they are bleached i: papara, the actual conversion Into papers of such diverse charactarletics requires quite different technology and r Ï équipaient. Printing and writing paper machines are limited it In apead to about 400 meters/min. but tissue Is produced at

spaada approaching 1000 m/rain. In practice It Is normal to i Ü use two different types of paper machine for optimum economy I Of production, for printing and writing a machine with a > ü awl tiple cylinder dryer section is required but for tissue a "Yankee" dryer is convtntional. Thau for printing and

writing at least one quite large machine would b* required and 11; for tissue one (and possibly two) separate machines would be i li ne ce s ear y for the projected tonnages. I The limitations mentioned In (b) and (c) would also I still apply. i i! (•) tack. Bat and Wrapper Sack, bag end wrapping papers together with corrugating

medium and liner board fall into the category usually known i as "industrial papers". Se I is R- 193A/07/3101 - Page C/40 I 3 MMIIII . CONMKTANTt In an area ./hete acme SO-70,000 tons of paper sacks «re

uacd for packaging sugar the manufacture of auch paper woulu

appear to be a natural and logical selection. Projected

unaatlafied demand at 138,000 tons/yr. la, moreover, 3 to 4

tínica that for fine paper*.

at Sack paper from bagaaae unfortunately, however, cannot « be produced without ualng a large proportion (up to 501) l| ! of long-fibre pulp to achieve satisfactory strength properties. Ì It n Thua utilization of bagaaae la greatly decreased and Manufacturing coat la proportionately Increased by the

requirement for expenalve long fibra pulp. Although the i Î manufacture of these typea of paper might be profitable, the r lower consumption of bagaaae and the increased requirement for I H long fibre pulp (which must be Imported) combine to make these •> producta less attractive than the other lnduatrial papers vhich I are dlacuaaed below, !» (f) Llnerboard and Corrugating Medium i ;i Theae papers (or paper boards) are the compenenta which

when processed and asaembled form the most coaamon type of

contaloerboard. The normal ration of llnerboard to corrugating

l! in contalnerboard la 2:1 approximately; thua, although they

have been tabulated under one heading In Table 8-C, the !! projected demand of 215,400 T/yr. In 1979 may be conalderad

aa 143,600 tona of linar and 71,800 of corrugating. I !l w I ti k- 1 9 JA/07 / il ni p-Re C. ".1 I il •Itmilll . COtttWt TANTI i : I At this point in the Argentin«- economy the growth of

demand appears vary rapid which it probably due in moat part

f !! te the fact that it hat only ralatlvaly recently come Into

general uae (recordt date back only to 1964). The figurai

for untatltfied demand (Table 8-C) indicate that for the •'I yféT 1979 llnerboard and corrugating medium potential market ».i: will be 4.7 timet that for printing and writing and tissue

and 1.6 timet that for tack and wrapper. it Corrugating medium requlrea no long-fibre pulp and

llnerboard only about 30* (25t In tome catet), to that the i ij requirement for coetly Imported kraft pulp la reduced to reaaonable proportions. Although the bagatae uaed in auch

manufacture la pulped at higher yield than pulpa for the i i other papera dlacuaaed, the consumption of bagaaae la maximum because of decreased content of other pulp and the size of

•ill which can be built to meet the unaatitfied demand. !• The technology of manufacture of corrugating medium it ;! uncomplicated and that for llnerboard la only elightly more

elaborate, and production tonna get per unit width of paper ¡i machine ara high. The optical qualities of both products, particularly corrugating, are relatively unimportant which

means the water quality requirements are not stringent and

chemical requirements are relatively low. i ;i • 1 I R-193A/O7/3101 - Page C/42 I I • COMMUA*« I AU theae aspect« ire Important and particularly advantageous In the province of Tucuman where baga a a« 1«

r!i plentiful, papermaklng akllls are rare, water muat be uaed

several tlmea over, and chemicala must be brought fron

other parta of the nation,

•i (g) Conclusioni

I! Considering than tha fundamental concept which has been

adopted, I.e. the largest possible industry using to the it •taximusi the quantities of bagasse available and also ij considering all other pertinent aspects and conditions, the decision has been made to concentrate investigation on the

sMinufacture of liner board and/or corrugating medium. I "¡i Tha remainder of this report therefore will discuss III utilisation of the bagassa from tha Ingenlos of Tueurnan only >' for production of on« or the other, or both of these II! products, C.» Definition of Coat Hádala

Tha contract for this study (UMIDO 71/53) requests development

of cost models for small, medium and large mills, leaving to the

Consultant the decision as to which,, capacities might apply to each

i: classification. The decision having bean made to concentrate on

linarboard and/or corrugatine medium, tha definition of the three !! mill capacities amargad rather eimply through the application of

practical considerations and tha mora or less coincidental in • I H-193A/07/3iOl - Page C/ 4 •p I.CONIMTAMTt relationship between the production characteristic! and conditions

of the two papers.

Conversion facilities for manufacture of contalnerboard and

fabrication Into boxea are already In existence In Argentina and

it has been sssumed that these plants would expand as the market for

'i their products lncreaaes. Since It Is normally more economical to

Increase the capacity of existing plants than It is to plan and

build new ones, it haa bean concluded that any paper mill proposed Üit would produce only the Materials to enable the existing converters 11 to keep up with growing demand. Thus any new paper mill would (Í manufacture and ship paper In rolla leaving converting to others. In order to reduce converting waste to a ainiaua it is ï i ii necessary to make roll wldtha as auch as possible in Multiples of 11! Che sites of the fluting machines which are used to transform the i* flat corrugating medium into corrugated paper. The liner board also I II I must confora to these sites. A survey of fluters in existing converting plants revealed the aost common widths to be 1.40, 1.70 I and 2.20 asters for paper 1.30, 1.60 and 2.10 aetera wide. I Computations using these latter figuras revealed that sheet widths of 3.2 asters and 5.0 meterá would suit the largest number of hi width combinations and produce the saallest losa, thua paper

machines of these widths ware selected. 1 Calculation of practical production rates for these paper machines using average aheet weights snd, from experience, average ill'I © I fS R-193A/07/3101 Pag« C/44 • t • COMtMlTANTI I ; ? I operating speeds, showed that on llnerboard trlnoilng 5.0 meters average production would be 330 tons/day, and on corrugating medium

•t 3.2 meter trim average production would be 166 tons/day. it I.e. almost precisely In the ratio of 2:1 required for container-

board. i: Additional calculations verified that production of both ». products In the same mill (496 T/D) would utilize the major portion

of bagasse economically available from the Ingenlos located In

u either the Northern or the Southern region of the Tucuman augar belt.

The moat practical Coat Models to be Investigated thua ware t. determined to be:

I i Coat Model I 166 T/D corrugating medium Mi Coat Modal II 330 T/D linerbosrd Coat Model III 496 T/D both products

.1 The capacitlea are realistic taking into account market i I demand, bagaaae availability, and practical mill sizes, and have !' also the advantage that a good comparison of relative financial

I ;! aapacta should be poaalble.

Reference a to Modal I, Modal II and Model III in aubaequent li parta of the report pertain to milla aa apeclfled above.

! in MW I R-mA/07/ìini Pag« D/l WHIIIII . COttttHTAMTS

•il AVAlLABIL:TY_Or BA^ASSt

1 D- l Gsjnartl (See alto Appendix Saction BX.l) I lii <•) »»!»" '"<* Sugar Production Une ton of whole moiet (bOl) bagasse obtained from

each 3.4 ton of can* proteased This represents approximately

291 of the can«. In some augar trills the amount of bagasse

obtainad la eomewhat higher than this provincial average.

(°) Baiasse uatd at fuel

l Üit Bagaste * • waste product used as fuel to generate S* steam, In order to fulfill steam and power in sugar mills

(See Table 1-D). Steam plant Installations In Tucuman il sugar «Ills ara generally old-fashioned. The ingenlos produce i! refined sugar (*) and SOM have alcohol distilleries <**).

Consequently, they have no surplus bagasse, and they

Il usually have to use additional fuels, to generate luftuient

stesa and power (***). Supplementary fuels consumi y used

ars natural gas, fuel-oil and wood. !»

;! In case bagaaae is diverted for other uses, the need

of alternative fuels must be taken into account, on the

basis of calorific values and boiler efficiencies. I!

(*) Lets than 10X of Tucuaan sugar production is coamercialUed !! at cruda. (**) Sugar ailla having distillation plants ara: Agallares, Nils Vitta, Concepción, La Corona, La Florida, La Trinidad, Leales, San Juan and San Pablo. (***)Tabls 1-D ah ova bagasse used at fuel in the varlout sugar íI «lili. I afáfteffor JTi !| R-193A/07/31O1 - Page D/2 I • I . COMMUTANTI I Ü During the visit to several tugar mills in Tucuman, their representatives expressed their concern about the

problem of fuel. The sugar mills should have a&*urance

that they will have the alternative fuel in the required

quantities and a somewhat higher price than the replace- ^1 ment fuel valu« should be paid In order to make it I! interesting to sell bagasse instead of using it as fuel. Other uses of bagasse are presently not significant

le in Tucuman, and they do not amount to 21 of the total ii production of bagasse.

Ml Bagasse la mainly used for paper production in Leales i ¡ and Celulosa Argentin« plants. Leales use 20-251 of their bagasse for a 25 T/day corrugating medium plant. Celulosi

Argentina produce about 16 ton/day of corrugating and

I wrapper, with small quantities of bagasse obtained from !! • ii the Concepción sugar mill. !» Nunorco sugar mill is studying a project for manufacture I;! of particle board using bagasse as raw material. Production I would reach 30 T/D, and the project was well received by

national and provincial authorities. 1 S! (c) Suaar Industry in Argentina Argentina sugar production amounts to leas than one I Í;i million tons in 1970, i.e., more than 11 of the world

i il • I «t-elfor JTwtor R-193A/07/3101 - Page D/3 MWMini. CONIIHTAMTI 1 lì production. All tugar produced is obtained from the

sugar cant. The area of production, 200 thousand Ha.,

is located between 22* and 28* Southern latitude (See

map Fig. I-D). Cane yields are somewhat low at about ii 47 tons per hectare. Installed production capacity of Argentina sugar mills is 2 million tons.

Since 1967 production has been regulated according

to export requirements and consumption estimates, avoiding

! accumulation of excessive stocks, according to a system

established by Law # 17163, Export requirements correspond

•: to Sugar Act (USA) and the International Sugar Agreement, i i and presently these amount to more than 70 and 50 thousand tons respectively (See Table 2-D). 'ii National production is divided into three zones: M! - Tucuman province - Northern region (Salta and Jujuy provinces) ! ¡I - Littoral region (Misiones, Chaco and Santa Fe provinces) I ;! Tucuman has 16 sugar mills in operation, which in í I 1970 produced 54X of total sugar production of the country. Cultivated area In 1970 is 140.6 thousand hectares (69.21

of the national total).

The situation of Argentine sugar production was completely !! modified In 1967 by Law # 17163. This law regulated production

by a system of share« to cane producers, after having determined i :i ® I R-193A/07/3101 Pag* D/4 »I I* . COIMWlTAMTt I II tonal and national totala. Quota* aasigncd In 1969, 1970

and 1971 war«, Tucuman 321, Northern ton* 42X and 61 to

th* Littoral.

(d) Tue uaian

(1) General Information

Situation: 22*6' / 28* South*• latitud« 64*30*/ 66* 11' longitud*

Arcai 22,524 km2

!! Population (1970): 765,962 Inhabitant* ir Population danalt«: 34 inhab./km2 i ¡I Climat«: Van* and humid. Rains per year vary from t: 500 mn in th« Southaaat to 1600 on in th* Southwest. Average annual rainfall for i ¡i San Migu«l d« Tucuman la 933 mm. Unemployment general rate: 10X (April and October)

«i; (il) Sutar Industry In Tucuman

Operating season for Tucuman sugar mills lasts I i! bettman 120 and 150 day*, and it usually begins during . !» the first week of June and ends on th* second week of I¡I October. Furthermore, Art. 20 of National Sugar Law I states that November 15th is the last date to finish

operations. About 551 of the cane is hand harvested, l! 42X is harvested semi-mechanically and only 31 entirely Ü mechanically.

I' !l! m I 1-193A/07/31O1 - Pag« D/5 I II . CCNMUMITI r : Tabla 3-D ahove lugar production by augar mill i i and tha avaraga for cha Laat 10 and 3 yeara, thla laat avaraga haa baar calculated In ordar to give

an ldaa of tha altuatlon aftar tha cloalng of ione

augar milla dua to 1965/66 ctlala.

•i D.2

li (a) iMHIf fl9fr«t9n ln TWtffW"

Tha quant It laa of bagaiaa obtained ara ralatad by ! ralatlvaly flxad coafflclanta to tha quant Itlaa of can*

procaaaad and, of couraa, to augar production. Thla

i mean a that variât lona in bag«aaa aupply ara parallel

to variation! in augar production. Saa Tabla 4-D. 'Ï

I I! I ;i l l! ¡i I il m I : ! - 1 5? 1 •• • • _ r~ - yI i • 1 i I »•» IU x : t — a 1 < ' — » Xì -î r, lA O r - cr _ <*> O ~> O X X •J- O O —• « CD O r. >N f» O '* r , lA (A X íN ao ! ' * i j «<."• < < f- '- t O .A i—i tr> -.* * <* —• C

; r- m X) O ao .f ni» ./•> r-« -Í X T f - I I x —« r- O —«

j J- -H A X" '¿ J¿ 1" 1 m r- O tr o A J- f>» J OC r» r_4 r-- lA v^ LA "Í ^ CJv Xi 4 f— ao 'N •A Sí \ 1 - o ¡ 1 1 o* •A (N xi a> ao >t X" r«. a* rA •* O cr » r- m. - ri H »> » -Í C7- c> *A r^ r~ < m ,4 O -< (N u-i á¿ X) ao It j Z J O H M « Z •-) m xi ao| ao h. ° •* ^ ri O m O IX Xi IN x> Q O ^ a 1 ~J *•Z • < 4 H O N » -J -* ir» »j tri ao si x> O ~ ^ ^ IN x> es O ••» 00 ~J a* x< O m 00 ,, H X «í ^í X> c* r- O <""> n J <»> ao O ao mi El «Í 4 r« -< x> x> r- ^J CTi| m —i —* -t i C h I O

IA w fN ;! XI (J -* 1*1 oo o •tf —i ~> oo o >ñ ft (N vO >í ~í ri 00 o «Í .* *t r~ IN O â Xi r» ri <*i fNI o -« ~+ r-* —< ri -* ^ ** ao -•'

o (N < z < M (A a i-l | 3 ¡i te m g « s «¡S R fi o ^ Su O •"« fe 3 H o Ou S s m s 1 O O £ S § 1 (A i-i IN kl O N E ss < í Í « ri Z r- M 2 . < M « Ü Z 3 Z ri OC < i» O O* < < u < < i en o cj J t/> M J W 3 3 (A < z G Iri ri > o" 0 IN z >. 1 > 9 1 « [ ! a-) a! n I UN •Xi (•NI in O ao -o O

CI

i -y —• O ao -e o ao —•

J. O c g (M ao o> JO ao NO oo in x>

00 O» C*N .-I CM O -* 0* 1/1

—« o* n Ö

O m CNI o 00 CM O OO CM a- u i/i 5Í 0* O* (M 1/1 CM *0 ci < oo m >» CM s* lT> r«. en CM ui NO O* ON O i/i 00 O

ON 00 ao s ao N© O E O ON NO O» Il ON CM CM 3 N© PI < M -I

C»N x> ON •J ri in CI N© CM Ü x> o" ci ON ON O o m •M N© m CI CjN N© •X) in NO ON r» m !! ^» vO CM x> CM I N© in O*

CM ao O S f-> o» CT« «M O m

r» CM ON o» ON oo ON ci 3 N© O ON m 00 C/> ci (M c-> r». O fM CM ao R oo 3 (A C S3 O g g S 8 «0 H H H

CM 1! r» &> —i S !! •i § s O I «S tE W fit, (A 3 * e H ¡IC H J w > •> M u < > á 8 CA S 01 o K o en «I 0« H C5 Hi CJs è s Cu M a fc ¡i _, ... ^-. z « 0 .e 00 00 ao in 30 ao 0 ao ao O »ni m I \i »A i/"l A in, : • rs sO vO E t r. =J s£) rs. -^ rs Cs) u-i >n -< ao m r- O O -.0 .£> lA ci n >n rsi ^i <""> rs) rsi rs) r»> •0 JC ö- ••- a •J. Î rs. 0 O <"> <*> O m ao fi rs rn in es) 0 00 O rs, in i >- -X) ^ ^ -"" ÍN (N sj (V) vO N J 4 M "^ -* rs) rs) ao 00 ...-. OS iG 0< il 0É «-> II) ID O -^ r*» r »/"i H st in in ^ m m » in rs so 0 O* «r» 0 ^ < ss in in 0 fs| r~ rs» es) os ^i so CM sj- rn in 0 C C >"• sO vO H ^ fg H m -4 m Psi r"i ^ 0 ^^ m r*. H -4 rg if) ao 0 2 II »4 0 —* st st •f ï U 4 0 ^ N f^ tC 00 r~ H ao rs O m 0 ^ st rs st so rs. rsi rsi a. C 0 a» rs fi >n 10 F4 r** csi csi ao _, — rs t~* ** *4 rsi »n -< f» rs) in es ~+ ^ rn (M pst os M -* m se O» O» st st S. H M It 4» S O- in rsi 00 -4 so vo rs « so ao 0> rs. -* vO rs) o> rs rs 0 ao in ^ rs J= c Id O ^ » n N g O* O sO m ) so •* rs. Q 0» r-i CI sO -4 rs| Csi 5 ••4 C H 5 « I e w i4 00 M 0 O se rs rn 4 to N sO l/S fO d n »4 CM _> m »î ^0 *4 "4 (M -4 ao rsi <* U 2 ¡'s ^4 in ri .t in -4 •* N H OO »4 -4 m m in rs « K4 «4 st st

IN THE PRO ss TABLE 3-D i=3 « 4.

SS 4J "O

• SM £ C) H ^ \0 ^4 .-t Csi m •* 0 © •^ O r* O» sO rsi rs) sO « ri in 0 SV O Os j> m ¡n 00 « ao rs in en O« «1 e x> î 3 I ä tv to * 4 4 >< m O rsi csi .* O <""> r» O —1 O rs 00 00 rsi rs. rs Os OS so r*> O« s* rs r-t H ri ao W ao' «4 0< -4 M <*> •st in >-i rt 91 H 4 m O CS) S* PS O o> t) rs »4 rs) rs) rn iA psi ao n n N o\ rsi csi rn ps in —1 l! >4 V) * s^ O ri CS S X O s¿ O !! 1— 3 Í 1 M 0 H C 41 1-4 ok rs > > 0 •< 8 c ¡i 0 CA 00 I ptf •* < » z a. ö H • SAM JUAN LA FLORIDA DPT. CRUZ ALTA

CRUZ ALTA « DPT.CHICLIGASTA

V) LA TRINIDAD SAN PABLO < lit LA FRONTERITA DPT. PAMAILLA BELLA VISTA

>' CONCEPCIÓN LA CORONA STA. BARBARA DPT. RIO CHICO MARAPA 5^ •j x «a S AGUILARES H 4« H 0« 1 I

?» to o &• —* O- «O «t o «ti«» O f- (N «y> P*> «O C P* f à f• Q -* 00 <7^ m a« «M n «j O c"i ao ri o fl n < «e i—• r« «e IA «t 00 ao r-> «««i Pî •—« rsi ^^r^ro ril (M -• < n .$ «A «A oo «Í O ff< <""> H H OO O «t M M » «T> «O «A fM r» O"» » ao Ifl ri IÍI (S >© > Y p~ r« CM il 00 P"> «O O 00 «t A m r- p«i rii r« O* O <•* (S «* «/> O r- «0 «Í in >t r» r~. «0 «o ,«, !_| ft ri ft fA f* (M ri

S , r >nn«o«T ' i «A«î» «O t«. » N ^ O «Í « r«- rA c* •-! 5 «o N i «t O 1 _ «A m f/v P«. «n 4 «t o

O -< O

(A 38 O (N O "> f» «o o >-« p» o <*î(S'-I«O ri o » o p~ !! H H «O S «T> O «J«Í «* «Í (N rsi P» O «í o <*•> r» ao r« r« IN o ri n «M r- x cu x «»> O r» CO «J O ri r« 00 O «A oo •* •< «-< es <*• P» <•"> ao i/i r» 00 et «C -î «t «0 N O p. p» O fl N ¿ ««t O"« kTi

lA U !! U 00 I «/) «O O <"1 O oo —' c~< iA «n O «Í «o o «A —< «O M O O fM lAl f. «D O «T> O O >**i o «o «C lA r» o ao en «M t/l «A lA r^ P«. 00 ao -* «e «e «a> r* m er< «s cío**«» ao -<-*-<>« f* r-i io r» r^ m oo o •* «e es a> ri 00 O » lA ro IN (T* «* <î «* >* ao «n «* •* «s ^ 1-4 ft ««t f* «N ao I

CA 3 l! d *<* s 3 en 3 !! U j o CM

1 I i ï* a PAO INA 0/13 I PAGE D/IO I EUH

! f

i I

IIi l I o o II < UJ I O f

REPÚBLICA ARGENTINA

ZONA AZUCARERA # PROVINCIA DC TUCUMAN I

R-193A/07/H01 Pag« E/l I HMit.COmWfAMTI E. OTHER RAW H AT EHI Ai à - AVAILABI. ',TY AND COSTS

E 1 ChemK aU

(•) QSMlâi

Of the chemicals which art Important for the bagaaee

conversion tnduatry, the following hav« been Investigated:

- Line (Calclua Oxida)

¡i Lime at one ! I1 1 Sodium carbonate 'l - Cauatlc soda

i g Aluminum tulphata

- Chlorine

Sulphuric acid

Starch

Ream aite

and the availability and coat have been investigated,

Hoat chemical« are available In Argentina, acme have > i: to be imported. 1 Limited quant Itiaa of eulphuric acid (HjSO.) will be ? required for feed wat er treatment and atock neutralisât Ion. Small amount a of starch, realn, alum which are alao

needed In the procesa would be purchased from local auppllers

: to Che pulp and papar induatry. Mi Table 1-E shows the varioua chamícela with their avail- ability and coat.

An electrolytic plant la not needed alnce the milla a • ccmeldered in the model* produce unbleached pulp. H

I •—---f j - -i- ! * » » '• • r ï S ! 1 » m • 1 - I ; • : r. * -< i & . • 1 3 I - 5 M i : °' ¡¡ 5 » -i• ! • O ¿ -> »• 1i «»t à ¡ 1 1 3 n . i s S lac g II 5 st 2 S g X

i 1 4 s - 1 •N s ì — • a M -.1 U a : u J o • H ri 1 1 I ï h 'i 3 -M j 1«; « Ü1 4 -1 • E • S à f 3 1 SS %\ î II k 3 »• • 3 8 1 j i 1 Î ¿M 1 lì • J u * 2?1 3»! • ì 1 I 1 1 II • jî 1 r> v a i k • 1 }il! i I î 1 • 1 I ! i ;! ! ! 1 il 2 1 . S f 1 i . 1 § Si 8 I! -J i ai à 3 35 i * s IS !! s ! ì jj il ti t 1 *El h ¡gI * r il a. i« (J Bi f " i< il t -1 t li I R-193A/07/3101 - Page E/1 I TANTI

E 2 Fuel

Bagasse , aa a aolid fuel, la a iub-product used In generating H; at »am, In order to fulfill steam and electric power needs fot the different proceeaee In the sugar mills. As mentioned in Section

D 1, any type of combustible may be uied to replace the bagaste,

.'I when availability and technical characteristics make substitut ion

possible.

As the result of preliminary atudy of documentation available, il and field Investigations in the province of Tucuman, wood has been 11 discarded. Due to the lack of adequate legislation on the subject, wood sources near the sugar mills have disappeared, and trans- i i portation from places where it is available has become very costly.

Same situation appears as regards coal.

Mi Prom remaining fuels, i.e., fuel-oil and natural gas, the

latter has to be considered for the sugar mills, due to its lower Mi cost per calorific unit, and reliability of supply. Furthermore, due to the agreement between Bolivia and 'i! Argentina governments on gas supply, Tucuman is crossed by a numbsr of natural gas nains, and some sugar mills have already

begun to us« this fuel. (Sa e Map Fig. I-I). S GAS DEL ESTADO furnishes the natural gas at specified pressures, which are nsver lass than 43 kg/cm on the main pips-

line, and not lass than 10 kg/car* on secondary branches. i i % I

R-193A/07/3101 Page E/a I tàMl i : Pressure reducing piente, ee well ee fecllltlee from them, muet be paid by the coneumer. Ratee (Dec. 1971) as below:

FROM TO cu.mt/mo. cu.mt/mo. $/cu.mt.

- 6,000 0,1740 il 6,001 15,000 0,1071 13,001 30,000 0,0901 30,001 150,000 0,0841 no,ooi 900,000 0,0800 900,001 3,000,000 0,0761 3,000,001 6,000,000 0,0742 6,«30,001 •• Or" «or« ° 0,0721

! re 0.003 $/cu.mt. on the first 6,000 cu.

•t. and 0.001 $/cu.mt. for monthly consumption exceeding thle

K figure. Calorific value of natural gae is 9,300 kg-eal/cu.mt., I il and boilers operate at 85-90X efficiency. 1.3 Lon« Fibre Pulo

Long fibre pulp le almost totally imported, and that from i ¡i countries outside the LARA agreement Is subject to duty ranging

from 5 to 201. ! mçt « s Crude kraft long fibre pulp, Clf Buenos Aires: (•) Ixtra-LATTA ione

Prices obtained were averaged, and the average of taxes

was added to this figure, thus resulting 171.00 US$/ADT.

(b) LATTA «one

Prices obtained were averaged, thue resulting 170.00 US$/ADT

Freight: By rail, carload lots, Buenos Aires-Tucuman: ~

I I-193A/07/3101 - Pag« 1/5 I TAUT» I batvaen 40 and 30 $*/t (8-10 U$S). Figuras uaed for cost calculations wart U$S 170.00

I 11 plus U$3 8.00 fralght. Í ¡I 1.4 Wjltf T§t1\ II Vaate papar In sufficient quantities Is reaálly avallabla In Argentina, stoatly froa tha populatad araas bacausa of tht

higher concentration of uaa.

Fricas for aecond class newsprint Including any freight

laudad in Tucuatam is takan at $• 310 par A.D. aatrlc ton 1 il I ¡i • i; M! I I! •i il ' !!

i !J H

• »«111 ll*l_hfa

[TINOGASTA

[MONTEROS]

INGENIO .APROVIDFNCIA NGfcNIO N_. ; \ •£— ' ^ \\ iNQ€ MOU CORONA#„.

• NOE MO SANTA RCi

INGENIO TRINIDAD

INGENIO HARÁ» « Vili« Alb» V

/

REFERENCIAS

...... LINEA DE TRANSMISIÓN 132 KV .«•GASODUCTO EXISTENTE —, » » EN EJECUCIÓN

i • M^^t«l-*-L ». Il >i>ii'ilil>' J, I r.A.li^J.JIiWntlfi« fc'i

MONTE l [FAMAíLLAJ INGENIO LA t-WONTER!TA INOENIÜ SAN RABL', Luies

«NIO UPBW'Pf NCIA NGtNIO ÑUÑORC0 ( Fa nl«r«*< • •••••••••••»•••«•••••••«•»•••«••••••••««••«•••••••••••••••••i

NGENIO SANTA »OSA

í; • *#-B*n* visu /•/

\ IOAD ^' -"!

*+' v '*>t '< INGENIO LEALES ^ y

/ /.

/ y •v'\ ÈLRUZ AU

/ [LEALES]

ZC PF

ES

t^ffiiJElLii i

—J ZONA DE INGENIOS AZUCAREROS PROVINCIA OE TUCUMAN ENERGIA Y COMBUSTIBLES!

ESCALA „. 1 2 50 000

apa* S It 3

L_ I R-193A/07/3101 - Page F/l • •COMMUTANTI

1 SERVICES AVAILABILITY AND COSTS

F.l Water

The availability of water hai been incorporated into

Subsection H.2 (b) in the dlacuaaion of alternative mill locations,

and little supplementary information need be added here.

Specific information hat been difficult (in fact impossible)

to obtain but in interviews with Government officials and ingenio

managements we have been assured that water in the quantities

required for any of the three mill alternatives, i.e. up to i 60,000 cubic meters/day for the largest mill, can be supplied on a year-round basis.

The cost of any special arrangements which might have to be

made to supply water to the paper mill would not be excessive

particularly if it la located adjacent to one of the larger

ingenios. !! i: P.2 L230I (a) Cenerai I» ¡I There are two electrical power systems in Tucuman - on« national and one provincial. The systems are, however,

interconnected so that for most areas of the sugar belt,

high tension transmission lines are within convenient range

and, in general, the supply of power for any of the alternatives

•Î should present few problems (See map Figure It). i !l PIP rMD i I I

Mimato R-19JA/07/3101 - Pa3e F/2 I MWNIHI. COMMUTANT» Power thatavteristici are 50 cycle, three phase,

I Because of the interconnections with otber systems,

interruptions in supply would be expected to be relatlvel/

infrequent. Except for emergency lighting provisions,

therefore, the papet mill would not require to have stand-

by generating capacity. i; Power transmission is for the most part at 132 KV on the main lines thus, since voltages in the mill would be

3300 maximum ranging through the various standard voltages,

depending on application, down to 220 V, two transformation

stages might be required. Alternati »ely, ft might be

i ¡i possible to connect to an existing 33 KV substation, n

which case new transformers would be required enly at the

paper mill. In either case the cost would be chargeable I ii to the project and the transmission line would be provided 11¡ by Agua y Energia. The cost of a primary substation, should it be necessary, would be included in mill capital ili costs. Since, however, particularly in the North it is i considered quite probable that 33 KV power would be ! available, funds have been allowed fot the secondary sub- ! i: station only. •Î The costs of power have been based on the rates HI applicable to the last quarter of 1971, as follows: l ÍI • I roa« I R-193A/07/3101 - Page F/3 I MWMIIII . COMMUTANTS Per Kw contracted $a 16.46 per month

Per Kwh consumed $a 0.029

Certain minor taxe« may in some circumstances apply

to these rates, but these have been ignored.

(b) Cost of generated power

In the calculation of manufacturing costs, it has been

assumed that the power necessary for each of the paper mill

alternatives would be purchased at the rates specified for

the Tucuman area la "Regimen Tarifario No. 708/70".

At their respective consumption rates, power cost for

all thro« mills has thus been computed to be $* 0.0545 per

KWH or, at 5 $«/US $, 10.9 mils.

For comparison the following calculations show the

estimated cost« of power which would result if generating

equipment were to be installed in the different mill«.

Factors common to all case« are:

Kilowatt hour 860.4 Kg. Cal.

Calorific Valu« - Natural Ca» 9300 Kg. Cal./m3

Generating Efficiency 851

The gro«« return on investment for generating power

in each of the three models 1« shown In Table l-F.

I • o I r*

!ï I O

«o M o 3 « —I 1-1 c U «I a « I ï fi >< 4-1 oí M « W M 41 4J <* S! «I >s «i « > M « C o O M -* o M u O C c O H •ri T) O O CT. 41 CM

IX u •o • 3 3 4J U ti (ft m s u • oo tri in 4> *J 0* « 3 oo wt p» h «• ! U O •H 0 o O o H *J u 00 m m i« u o r* 0 3 V O eC o? > » ë < Ou -H o •H 3 S as M 8 •O • § M a i V CA S N • v0 ri M 2 « D in .fi o u9 m U «V Wl 2 g 3 u BU m O I 5 « (N ü 4-1 V U C <* 41 > y 0 I Ì u) !! te 0 C « U 0

« 4 I S g I! 8-2 s! «M u a. «ri cr. 41 0 M iS 4 ö n 5 TI I-I Q. i «J « N X 4) •n se u Jtî 'S 3 « « 2 l!

I 1 O IN 0

> I i li H ! I R-193A/07/3101 - Page F/5 I > CONSMTANTI The figures developed above thus indicate that savings

of at least 50% In power cost would be possible by providing

for in-plant power generation. It should be noted also that

loan interest at 151 and repayment in 10 years have been

used intentionally to show a conservative estimate of the

savings. If money is available at lower interest and for a I! longer term, the savings would be proportionately greater. These are attractive figures and it is recommended that u in a complet« feasibility study for any of the three projects li the Inclusion of in-plant power generation should be fully Ml investigated. i il F. 3 Transportation I Within the province of Tucuman transportation facilities are

excellent Two paved national highways (#9 and #38) pass through

the area, there are many paved secondary roads to the larger I* i I! municipalities, and these are fed by a complex network of consoli- !• dated and dirt roads. All roads remain in good condition even during the perioda of heaviest precipitation. In the area of the

'? sugar belt tha terrain is almost uniformly lavai with a very slight I I • lope generally to the East and somewhat towards the South, I i! Conditions for road tranaport therefore leave little to be desired. Several relatively large trucking companies have headquarters

at San Miguel da Tucuman so that competitive bids on trucking

I contracts should be possible. This is particularly interesting SI Si I R-193A/07/3101 - Page F/6 . 'I MMHMI , COMttKTANTl

from the point of view of bagasse transportation.

All ingenios, of course, are accessible by means of quite

satisfactory roads since the major part of the cane la delivered

by tractor-trailer trains.

Similarly rail facilities are more than adequate. Two

railway systems operate in the province, Ferrocarril General Mitre I! (standard gauge) and Ferrocarril General Belgrano (narrow gauge). The combination of the two different gauges might cause minor

u problems in respect to some locations but service to and from most areas can usually be supplied without difficulty. Both

rail systems connect with moat of thelarger centers such aa

Buenos Aires, Rosario and Cordoba so that shipment of supplies

to the mill and finished products to the consumers should be

relatively simple to organize and arrange.

The map, Fig. II-F, gives a good general picture of road

and rail distribution, although on such small scale it is not

I !! possible to Indicate the many minor sideroads and spurs which !»

! ;! could be of interest. I Cost s of transportation are indicate! 1 for chemicals , kraft f pulp etc. In the relevant sections of the report and in I the i i! Appendix. I il The largest tonnages to be shipped out of the province ;i would, of course , be the finished paper. Coatii for such shipment ili I R-193A/O7/3101 - Page F/7 I ¡I •MINIMI . CONHHTANTI in box cars-carload lots of not lei» than 507. of rated car

i 5 loading would be:

CORDOBA ROSARIO BUENOS AIRES í » Distance Coat/Ton Distance Cost/Ton Distance Cost A"" i $• $• $•

F.C.G.M. 643 km 31.44 842 km 42.43 1143 48.87 'I F.C.G.M. 563 kto 34.24 926 km 40.09 1221 51.21 Transfer from one gauge to the other would have a surcharge

of $• 2.90/ton. u Standard gauge load limit 50 tons

Narrow gauge load limit 35 tons

II Ratas for road transportation ara mora difficult to specify i since truckers arc inclined to adjust their charges according to I circumstances prevailing at any given time. Also, because of

I ii rapid inflation, they are reluctant to quote on a contingency

basis. The rates which have been obtained, however, are more or

less competitive with the rail shipment costs shown above.

i ¡: It is felt that the major part of product shipment would I Ü probably be by rail but in sons cases road transport might have i I advantages. It is also considered quite likely that for the tonnages I! Involved discounted rates could be negotiated. A realistic rate would possibly be about $* 40 per ton. !

i il H \ 'INO GAST Al

MONT tfôs]

IM«N APCCN'Df KÙÀ N'*VO Ki

REFERENCIAS CAMINO PAVIMENTADO SECUNDARO CAMINOS NO PAVIMENTADOS FERROCARRIL LINEA PRINCIPAL) (RAMAL) • PUNTOS ACOTADOS DEL TERRENO

IHK- _?"^3fcW''WN^^fft». ^5

•« M"NT£çOS' TA MA! UÀ" •Mi VC A ' SON r F ¡T'A K *,F V'v 'JAN ^*H.

LU1«

J S <9TV ; '• ».." .A V* \p ^ NO»CQ ¿maiiié

rà '^BS-^A - S'A

ViSté

Í - !

INGENIO -EALES I

[LEALES,

mmmm*3*~" ni la » „1 ^

ZONA DE INGENIOS AZUCAREROS PROVINCIA DE TUCUMAN CAMI NOSJ FERROCARRILES

ESCALA. 2 5000 i iitrni. 3 R-193A/O7/310L Page G/1

LABOUR AND MANAGEMENT

G. I OmenUetlon

Th« Organisation Chart - Fig. 1-G illuetrates a typical

arrangement and assignment of functlona which would be lultablc

for aach of the thraa alata of mill undar consideration.

Administrative and auparvlaory poeltiona down to the levai of

the varloue mill auparIntendant a are shown and, below that level,

the reaponalbilltiea of aach auparlntendant are indicated in

broad acopa.

It may be seen that total personnel subdivides into four

eaeentlally distinct groups.

- Head Office

- Mill Admlniatration

- Mill Operations

- Mill Repair and Maintenance

The functlona of thaaa individual groups are different in

perspective and performance but all must cooperate and correlate

well to achieve a smooth running, efficient and, above all, a

profitable operation.

G.2 Personnel Requirementt end Cott

(a) Foreign

It la considered very improbable that any of the

propoaed milla could be completely ataffed right from the

outset by Argentlnea possessing all of the skills and I MâmëJf Mmttor K-193A/07/3101 - Page G/2 «•Ml. CONItaTANTI

! experience necessary for efficient start-up and operation.

For certain mill management positions in particular, willing-

ness to work and learn, and potential ability and enthusiasm

cannot substitute for eKperience in the complex equipment,

techniques, system» and procedures involved In paper manufacture.

For the purpose of achieving a well organized and profitable

operation as quickly as possible it has thus been deemed

advisable to provide for the temporary employment of foreign

ir experienced personnel to administer some of the key functions li I until Argentine Nationals can be fully trained to assume the responsibilities of these most important management posts. I ¡I Table 1-G has therefore been prepared to show the extent and coat of foreign assistance considered necessary

for the smallest mill, and Table 2-G shows similar Information I ! for the medium and largest capacity mills. i In the estimation of costs, it has been assumed that

I I • alary levels would conform to North American Standards and I ;! that usual concassions such as exemption from income tax, i ! and free housing, medical care and local transportation would be granted. The f^rst of these advantages would involve ! II no extra cost to the prjject(s), but the remainder have been ! < i allowed for In the column headed "Annual Allowance". Return transportation expense for the men themselves, their families

and a reasonable amount of household effects, has also been is A ine luded.

1.0 ' If ¿J II ill i o 8

125 14 16 I ¡i R 193A/07/JIOI - Page G/3 I • 1 . CONIMTANTI In referente to the Item "Recruiting Expense and Pee"

it hat been a i tumid that the recruiting of expatriates would f be arranged through Contultantt qualified to evaluate the ik.lllt of the applicants. This it a conventional method >f I, li finding and selecting the moat suitable candidates for the various potitions and carries with it the advantage that '\ provltlon may be, and utualiy is, included for handling all

administrative matters in referente to expatriate personnel.

Ir Under tuch an arrangement the Contultant would continue to si observe carefully the performance of the selected men in the

positions to which they have been assigned and, should it

prove necessary, would arrange to replace any who thow them-

I •elvet to be below the required ttandard. In addition, since

i i> expatriates are normally retained unde- two-year contracts,

the Consultane would renegotiate the contracts of those men !! scheduled to atay three yeart, or would arrange for replace-

ment of pertonnel who do not wish to remain after the original

li contract period. The »urn allowed for this item has been ettimated on the baalt that the Consultante reeponslbilitles

in thia respect would encompass the full scope which has been l! outlined. The possibility cannot be ignored that some of the !! positions suggested for expatriates could be filled by

Argentine, or at least Latin American, personnel at salaries li m I ftaeffer R-193A/07/3101 - Page G/4 I •ISSIISS» . COmUlTANTI and allowances aubstantia!Iv lover than those estimated In

Tablea 1-G ar.d 2-G. A very significant advantage In the

elimination of language difficulties would, nu doubt, result

from employment of such people If they ci.i be found. However,

since expatriate assistance Is normally considered to be an

indirect capital expense to be written off over a fairly I! lengthy period any variation from the totals shovn would have relatively Insignificant effect on the overall cost of

It product ion. 5< (b) Argentin«

For estimating purposes It has been assumed that: I I! - As indicated above certain mill executive, operating, and maintenance management functions would be performed ill initially by expatriates possessing krowledge, skills I l! and experience particular to the paper industry. f I! - Each position held by an expatriate would be understudied ?» by an Argentine of adequate skills and ability to permit f ;i him eventually to take over the full duties and responsi- I I bilities of the function for which he is being trained. - A suitable prestart-up training program would be implemented I i! to ensure that other men in various key positions will possess adequate skills to permit them to work efficiently

and to impart their knowledge to others being trained on

the Job.

• I BtméJi fwMr R-193A/07/UOI - Page G/5 I BN*«IIHI , COMMUANTS il All Head Office personnel and, wit!» the exception of the

position» lo be held Initially by expatriâtes, alL mill f personnel would be Argentine. Accordingly average wage rates have been estimated with reference to the provisions ü of national labour agreement s, and salary levels in 'A accordance with current standards in Argentina Based on these assumptions Tables 3-G, <4-G, 3-G and

6-G have been developed to show the approximate number of

people and annual costs for each Cost Model and each of the It principal sub-dlvlsions of personnel. For convenient reference

'. Table 7-C sunmarlies the four precading tables in terms of

the number and costs of personnel required for the three

alternative mills. il It will be noted that, although the productive capacities of the three "Models" are in the general ratio of 1:2:3, the !! additional personnel and costs do not even approach these

i; proportions thus illustrating one aspect of the advantage of I;! scale. I G.3 Personnel Avallability

(a) FOMIM

In most of the positions suggested for expatriates

experience in the manufacture of bagasse-based paper, though

! ¿•titrable, would not be a prerequisite. The principal require- m ment* would be sound basic knowledge of the duties and I Jtetffar «farlter R 193A/O7/3101 - Page G/6 i H •NMHMI . COMMUANT! • ¡I responsibilities of the positions vhich they have been

11 »fleeted to administer combined with willingness and

ability to impart their knowledge to the Argentine trainees.

The Paper Mill, Pulp Mill, and Control Saper intendent s, and li to some extent the General Superintendent, h ove ver, should alto have a record of proven competence in the processing

of bagasse Into papar.

There is no doubt that adequate incentive in addition

le to th*j challenge of contributing to the success of a new I 5 4 1 i enterprise would interest well qualified man from most of e. the industrially advanced nations of the world. It is thus 1 Sí considered that the principal difficulty in this respect Ï! 1 would occur In selecting the most suitable candidates. O (b) Argent ine i II Aa indicated in sub-section G. 2, for any of thr proposed 11: projects, that intention is to staff the Head Office and the I! complete mill from the available manpower resources of l? Argentina. Even In the cases where foreign petoonnel have i I been recommended to assist during the early years provision has been made for the employment of Argentines who would ! i! eventually take over the various positions. In common with many other large industries the preferred

location for the Head Office would probably be Buenos Aires

but, If desirable, It could also be In Tucuman province. At [¡i # I R-193A/07/3101 - page C//'

• i either location there should be ¡10 problem in attracting

I !( competent people to perform the various necessary admini-

I strative functions. f I Ì The Northern ingenios ere more closely grouped thus, I economically, this area would be a convenient site for the Initial mill. At least five sugar mills and also the city I of San Miguel de Tucuman would be within easy acceas. With such resource« to draw upon, little difficulty should be

I It1 encountered in finding suitable people to fill all admini- strative, operating and maintenance Jobs not requiring

specialised paper-making skills and knowledge. Similarly, 1 professionale such aa engineers, chemists and accountants, mature men with trades foreman qualities, machinists,

electricians, pipefitters and other tradesmen, secretaries,

typlats and clerks, and all necessary common labour should

also be available from the appreciable labour pool in the

i t area, or certainly from within the province.

Recruiting of the supervisory and operating personnel

i who would be actively involved in the pulp and paper production

processes la expected to present somewhat of a problem in l! finding the required number of suitably experienced men. •very effort, therefore, muet be aade to ensure that the !! maximum number of operating jobs will be handled by people

with some background in papar manufacture and preferably,

1 I R-193A/07/3101 - Page G/8 I II. COMMUTANT* »on» working knowledge of the functions they will be expected

I ; to perform. Assuming that an appreciable nucleus of trained

operstors will exist it Is considered quite practical, for

the remainder, to employ awn who indicate potential to learn

quickly.

Trainee» to understudy expatriate counterpart» constitute I! a select group and would have to be chosen from the best of the experienced Argentine applicants In accordance with most

Ir exacting standards and exercising the best possible judgment. ii It must be kept In mind that the expatriates only serve to I assist In getting the project under way in minimum time and ( II with optimum efficiency. The future and continued succès« of the total venture will eventually depend totally on the

11¡ abilities of the trainee candidates to put into practice Ml what they have learned and collectively, to form a stvong l I! management group. G.4 llUÛiM 1 ;! It is important for a smooth «tart-up and continued operation that, right from the beginning, the key positions on the operating

staff should be managed by man who are familiar with their I! respective jobs and who, ideally, have spent some time performing similar functions under similar conditions. Since it is improbable !! that an adequate supply of such fully experienced men would be

available for staffing the proposed mills, a well organised training I R-193A/Ü7/3101 - Page G/9 I «SMI . CONSMTANTI program would form an essential part of the project planning.

At this point in time the total scope of the training which

would be required is somewhat indeterminate because this is toa

great extent dependent on th« number of skilled, partially skilled,

and unskilled men which can be found and employed. Generally, 1 however, it is visualized that two different phases should be 1 implemented: - Periods of training in operating mills manufacturing products I1 U similar to those proposed,

- Pre-operational on-the-job training.

The first of these would apply principally to the key men

on the operating staff such as the management trainees and tht

men who have been nominated as foremen in the various procesa ¡I departments. If a disproportionately large number of totally i II inexperienced men must be employed some of these alto may have

to be included. ! I Í To ensure experience In modern methods and technology such !» ( ¡i training should, If possible, take place in only the most advanced I I bagasse-based paper manufacturing plants available. To avoid language problems preference would be given to mills located in

Latir. American countries but it is recommended also that the more

important personnel should spend a period of time in the best of !! North American mills engaged in this type of manufacture. It is II estimated that an average period of two months would be the i ¡i • I Ita«!!«* R-193A/07/3101 - Page C/10 I II. COMMUTANTI ninim^m tor hest results.

The finding of suitable mills which will accept trainees,

specification <>f the type and amount of training required, and

travel and accormiodat ion arrangements for the men involved will

req.ire an appreciable amount ot lead-time. Formulation of plans 'A and selection and assignment of personnel for the various operating fi.net ions should therefore be done as early as possible

during the construction phase. s The second aspect of training, as implied, would take place it i In the new mill itself and would include those who have spent periods in other mills together with all other members of the i i operating crews. These personnel would be assembled at the mill

I for varying periods of time before the initiation of production i ü Is attempted so that they can familiarize themselves with the

system and equipment and can participate in training sessions, 11: including dry runs, in all of the process departments. For the general run of operating personnel an average period of two r ;i months should be adequate for this phase of the training. The

I management trainees, however, should be engaged at the same time

as their expatriate counterparts so that over and above the time

•pent in other mills and in the mill pre-operational training

they would have additional time to become familiar with all ! aspects of the functions which they are understudying. m I I! R-19W0?/J101 - Page C/l I I M. COMMUANT* ti'iO • . i.'\i aliati ' '.iiiitpg coiiwfp t ca - i.ir.ih If . ost <• r>i»\>'

u •i ' '. i.-i -;» • im«* ' J fe, *• A ol the propesaci milis dud int l.^ded ir í ! Deve ! opine 1.1 tupen?*-. G, 'i A¿ : crarodat lori a-id Trar.spcrt at fen

[ An ptiSf-ntly propeseci, the location of the initiai project

Will be almost adjacent to Sar Migiel de TV.jman th.? it i > not

considered ne essary to p:evtde on-site housing or iirnur.it y ¡Í facilititi. Svitablt ac ccrrmodat lot fo- expatriate and local nanage- It mert personnel should be readily available in the city THe

remainder of the working force, being in major part recr.ited

from the Immediate area, wo. Id likewise not requite ary special

a.cotranodat Ion provision.

Similarly 11 at-sportat ion to and from work would not be • i expected to present any particular problem sine, if it doe - not I !! already exist, it should be a simple matter for existing public I transport facilities to arrange to provide adequate service at appropriate times

[ ¡I No allowance, therefore, either capital ot operational, I has been made for either of these items, G.6 Management Contrant

Since implementation of any of the çreposed projets vo,*ld

constitute the introduction of a relatively laige indi fiai

i\ venture into a country where a comprehensive background In pulp . *

'Iif t ÍI I R-l9U/07/110! - Page G/12 I II.COWSMTAMTt and papt: iram ' a :. • e A<-y not exist at ¡resin, it is ree .mmendea

that a man a a«? merit contract should ne negot i at * d to cover, in f !;

particular, recruiting of ccirpetent sjpervisorv , • «.uinel lb M (incl-.ding expatriate») and actual management of the mili ir its • ii ea-ly years These servUea tan be sipplted eithe' by a firm operating similar mills or by a consulting engineering firm wit* 'i! experience in managing pulp and paper mill« based on bagasse as i the p'ime ra« material s The contract should be for a minimum period of about fo-r i* 11 years - approximately one year pre-operational, and three year» after sta*t-' p. It sho_ld permit the management team to -.ecruit i i suitable operating personnel and to Institute all operating I procedure* and ptores« techniques deemed necessary for the ultimati achievement of an efficient and economic operation, To avoid

I II complications and promote coordination of effort, the best artange- ' I! ment is normally tc combine the management and engineering contracts. f S

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* - R-193A/07/3101 - Page H/t

TAMTS

H PAPER JIT._ I LOCAI IUN ALT fc.RN.AI_' VIS

H 1 G«nt.|i

It IS not the intention, net it it within the S'ope of this

report to pin-point the specific piece of land on which a paper

null would be built. Accordingly, this chapter will indicate

onlv the general areas which comply best with the various aspect s

which must be considered in alte »election for an industry of

thla type.

In tha province of Tucoman moat of these factors «re approxi-

mately tha Jame for many locations Climatic conditions are

relatively uniform over the area of the sugar belt, fuel and

power are readily available, a good network of road and rail

fadlltlee i«rv(* all of the ingenlos, and it is considered that

fro« the point of view of the labour pool, any given area will

differ only ellghtly from any other. Similarly, eince the

province la email in area, proximity to markets and availability

and cost of construction materials would have little significance

In tha cholea of tentativa areaa for a mill.

Tha determining factora, therefore, are reduced to bagaste

availability end water availability for initial and future mill

requirement a and tha economica of the supply of these essential

elements.

( !l m I R-193A/O7/3101 - Page H/? I II.COMWITAMn Ir i* -ecogniied th.it political considérations may play

I Ü •orna paît In determining the degree of priority desirable for

development of regional alternative*, but decisions oí thiä ! i & i nature must be left to the proper authotittes. The Consultant

can only evaliate factor» affecting technological and economic fi ratability,

H.2 DUcuailon

(«) Baiasse

1 Examination of maps (Pig. I-H 4. II-H) shows that ! about 90% of the operating sugar mills of Tucuman can be

enclosed In a rectangle roughly 80 km Ions; x 15 km wide 1 i i and that all can be Included in 100 km x 25 km. It may also be seen that a concentration of ingenlos exists m the North

and another in the South. Three mill« (La Fronter it a, Bella i i! Vista and Leales) ate somewhat Isolated from these groupings, I« but since distances are not great, these can be considered i I I for inclusion in either group as required. The province, i !i therefore, may be logically divided into two general sones, I I on« at tha North of the sugar belt and a second at the South For purposes of discussion, it is assumed that Bella Vista

would be i tu the Northern ione.sad La Fronterit a in the -. \*

Southern soné. Ingenio Leales, which is presently operating !! a email mill manufacturing corrugating medium, will be

Ignored for the present, although this, of course, does not

I i !i I I R-193A/O7/3101 - Page H/3 (I preclude the possibility of inclusion in any prouosed

development program, should auch prove desirable or 1 !; necessary.

On the basis of average production 1961-1970, preaent f li annual metric tonnages of whole moist (501) bagasse produced In the two cones are estimated to be:

i! TABU 1-H

ANNUAL TOHNAŒS WHOLE MOIST (501) BACASSE PRODUCED

! Horthern Eon« gWthlïB Ì9M

Concepción 248,300 La Fronterita 117,000

Cruz Alta 53,400 Nunorco 71,100

La Florida 56,500 Santa Rosa 65,800

San Juan 70,500 La Providencia 105,100

San Pablo 129,900 La Corona 119,500

Bella Vista 102,400 La Trinidad 76,100 > I! Agallares 56,400 Santa Barbara 77,300

Marapa 44.100

661,000 732,400

The estimated quantity requirlï for *ma"nüfacturt of

1 168,640 metric tons par year of linarboard and corrugating

!! asdlusi (tha largest «111 proposed) amounts to 689,240 tons/

year of whole moist bagasse. 11'! R-193A/07/3101 - Page H/4 II. COMMUTANTI

It ihculd be PiCtcu, MÛWtVCr, that the abCVE uagisac

availability estimate« apply to the year 1970, whereas the

estimated bagasse requirements are for 1979. The predicted

rate of increase in sugar production is 31 per year (301 II total over a nine year period). Thus, theoretically, it would be expected that 301 additional bagasse will be avail-

able in 1979 which mean that the northern zone would be

producing 860,000 tons of moist whole bagasse per year and 'Ií! the southern zone approximately 950,000 tons of whole moist bagasse. It would thus be possible to locate even the largest

! mill in althar zona. Por planning of bagasse procurement it i i will be assumed that expansion will take place in a uniformly distributed manner and at the predicted rate. The number of 'il ingenios which must be involved will thus be reduced with I Jl consequent economics in capital and operating costs. If, 1 on the other hand, actual expansion is at a reduced rate, I! or even if for some reason there is minimal expansion, the i S maximum size of mill proposed can be supplied simply by inclusion of other ingenios - at somewhat increased cost.

The remaining major factor to be considered reletive

-i to paper'mill location and bagasse supply is the method of

transportation which must be employed. For bulk handling,

broadly speaking, this may be continuous by means of a

conveyor system or in bstches by road or rail. i R-193A/07/3101 Page H/5 îAim

The continuous system has a substantial cost advantage

whan compared to the batch method, so that for maximum

economy, the largest possible quantity of the bagasse should

be delivered through a conveyor system. Since conveyors by

their nature are limited in range, it is therefore most

advantageous to situate a paper mill adjacent to the largest

ingenio in a given area, consistent with more or less central

location relative to other ingenlos from which bagasse will

be supplied,

(b) Water

Water is not plentiful in the province of Tucuman hence

careful management la necessary to enaure that it is used as

efficiently and effectively aa possible. The use of water

la, therefore, subject to government control and approval.

By law, water for drinking purposes is given highest

priority, secondary priority la given to Industrial use and

Irrigation assumes the lowest priority. Actually, in the

case of the sugar mills industrial and irrigation utilization

•re inter-related. During the crushing season (June to

October) the ingenios use the water for manufacture of sugar

and before and after the safra the available water is diverted

to irrigation. The major requirement for irrigation occurs

during the period from November to March which fortunately I R-193A/O7/3101 - P«g* H/6 I •••COMMMTAMTt 1 s roirutH»« with th» rainy season. In April «r.-i M«v w«ie< ¡ availability is at its lowest point. The drinking water supply is for the must part

Independent of the water used for industrial and irriga' ion

purposes and need not be of concern for this report.

Discussions with officials of u number of ingenlos

Indicates that water supply to the paper mill should not be

a problem either as to quantity or as to cost. The water 'I requirement of any of the larger Ingenlos exceeds the quantity estimated for even th« largest paper mill alternative J thus during the crushing season more than enough water would i il be available to a paper mill built adjacent to a large mill (a* recommended for economy of bagasse transportation).

'Ü Similarly during the irrigation period, and even in the dry I il months of April and May, by appropriate diversion of water Mi to the mill intake and arrangement to remove undesirable mataríais from the mill effluent, an adequate supply of ' Ì water is assured. It should be noted at this point that, generally speaking,

a paper mill does not consume water but merely utilizes It as

a means of diluting chemicals and suspending fibre as required

in different parts of the process. The principal losses which !! do occur ara in evaporation from the paper machines and I moisture In the finished product. Since the bagassa received I !l I R-193A/0;/31Dl - Page F 7 I II.COMMKTAMTt t» at avviai?« *)0Z œolstt-r« »-.ich "lofse*' wo. id nut ap^a. i •; as watt?t ( on» nipt Ion. In ot f * ' words, the anio^ot of «a- • *

discharged by ttit paper mill would be essentially : der.t.:ai

tc the quantity entering the »yatam.

Vñüti «r andably the Ingenio management personnel e»p'ip»]

the opinion that a paper mill ah«;Id be located down*t:eam

of the s.igar mill «o that any Impurities In the papet mill ¡I effluent could net affact either their operation or thel- il prodjct. Sin. a, with the possible exception of s^lphidi acid, the materials Introduced into tie water in the *.ga

process can be readily removed or can be tolerated for the ! ¡I types of paper under consideration, such an arrangement would not be inconvenient. It is felt, however, that vith provision

of suitable efflient treatment the location of a paper »til

upstream of a sugar mill would not be ojt of the qt#»stipr

Decision concerning thia particular peint would form pat oí

'I! a detailed and comprehensive feasibility study.

Generally, water la more plentiful and more economically i available in the Northern area th s there could be sonw i advantage to locating the paper nlil In that region. In the l! South surface water is and haa been in short supply but subterranean water sources exist in almost all parts of the !! area. Velia are not coatly and water quality is, of courut,

superior to that of surface water. Possibly the evpenie of Ml I R-193A/07/Î101 - Page H/8 I providing t.- 'he nr;eiiâry quant It let oí trill pfve»»

15 vate: would be lovvhit higher trun lu the North b.î f 'ir í i preliminary evaluation, would not be exceeatve H.3 Concision«

Bagane and -atar art available In aufftcltnt quantity to

aupply tha larg.at mill contemplated whether it be lo.ated in the

Mortharn ione or in the South«• ion«. Th« coat of bagas*«- In me

Horth.rn fona would however b« lower and It n probable that

provlaion of th« neceeaarv water would alto be more economical.

It 1» therefore recommended that the initial Implementation of

any of the thr«e alternative mill« «hoald be planned In accordance 11 with all pertinent factore and condltlona In the northern «one.

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REFERENCIAS

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Mi mm I R-19)A/07/)101 - Page 1/1 I .tAMTI i ¡; SELECT'UN OP FRUlfcSS I l Introduci Ion I The process«! that are or have been med commercially for i • i the production of bagasse pulp are: i the acid sulphite process - the mechano-chetaleal process

- the Pomi lio process

- the Cuai process (Simon-Cusl)

- the Ayotla process .1 - the P1ADC0 process 11 - the conventional alkaline process • ¡i SOM of these processes do not produce pulp of satisfactory quality for the types of papers to be produced, some are limited

'Ü to small production levels, sonic are suited primarily to bleached or seal-bleached pulp production, and «oste arc not well suited to

the recovery of cooking chemicals.

In addition to these processes which have been used

commercially, there are a number that have been tried on a '[ ? laboratory and pilot plant scale. Those processes that have been f tried on a laboratory or pilot plant scale that are different l! from those tried on s commercial scale, are the bisulphite and the neutral sulphite processes. I

,! I ;= I R-19ÎA/07/3101 - Page 1/2 Since the pv-lp and paper mills proposed in this study are

to have a capacity of 166 to 496 ton per day, are for unbleached

products, and sine« the cooking chamicéis must be recovered in

at least two esses to stak« the projects viable, several processes

may be eliminated almost immediately.

The acid sulphite process is not well suited to the production

of pulp from bagasse and does not yield pulp of good quality.

The bisulphite process (which has never been in commercial operation)

'i Is essentially the same as the acid sulphite process exeunt that

the pH of the cooking liquor Is higher. The results are no better

than with the acid sulphite procese. The pulp Is not of good

quality and the chemical consumptions are high.

At still higher pH values, the neutral sulphite process • produces pulps of good yield and brightness (brightness le of no importsnee for the products under consideration) but of low strength, Mi and at the expense of high chemical consumptions. For this reason, the neutral sulphite process has never been used commercially and 15 la unlikely to be ueed (except for special esses - newsprint) 1 unless sulphur at very low prices Is readily available.

In the mechano-chemical procese bagasse Is cooked et

|! atmospheric pressure In s hydrapul per (a machine normally used

for dIslnt«grating pulp sheets and paper In water by Intense

hydraulic shear developed by an Impeller at the bottom of the vat). • R-191A/G7/jlOl - Page 1/3

Ta« vi'-hn agitation inei the rat* <>t p.iping the

unlfotmii/ of pulping, and detteaseo t H« chemual ( oni' rapt lun

Pulp quality la good, but steam and power consumptions are high

Recovery of chemicals la not feasible. Procesa equipment and

econoaUc c ont Idarat lont ilirtt the mec hano-chemical process to

product ioni m the order of 50 tona par day.

The Pomilio procaaa conelata of a vary mild cook io a towT

at atmospheric preiaura, followed by high danttty chlor mat ion

using massive quant it lee of chlorine to complete the del ignlficatIon

Tha prccaaa waa designad primarily for the production of bleached

pulpa baaed on tha complete utilisation of caustic and chlorine

in the proportions obtained fron an electrolytic plant. I Pulp quality is good, but recovery of chamícela ia not feasible. Production costs are very high and the process is

Halted to production capacities of less than 150 tons per day.

Though popular at one tin«, virtually ail Pomllio planta have

shut down because of uneconomic ally high production coats.

The balance of the processes are all alkaline pulping

proceaaes (soda or kraft) in which the cooking chemical is

caustic soda (soda proceas) or caustic soda plus sodium sulphide

(kraft procese). la the cae« of th« production of pulp from wood

there la a very substantial difference in the atrength of pulp

produced by the kraft procesa as compared to the soda process. 1

I I R-193A/O7/U01 - Page 1/4 Although the active pulping agtnt In both caie* is cauatk soda, i i; the aodum sulphide in the kraft cooking liquor protects th* l| celluloae fibre from attack with the teault that auch pulp i Ik i ! prodaced by the kraft proceas ia very much stronger than palp II produced by the soda process. However, In t h* e aae cf bagasse 1 :i because the : at e of pulping is so rapid, there is virtually no 1 1 difference in rhe strength properties of pulps produced by the I ! k-aft or soda process, 1 i! Chealcal recovery le feasible for «11 of these processes where recovery of chemicals Is economically justified. The 1 ! f* equipment for the recovery of chamícela by either the kraft or 1 1! eoda process is almost Identical. Because in the case of bagasse 1 there is virtually no difference in the properties of pulp Ü produced by the kraft ox soda process, the choice of procesa 1 !l depends only on the cost of the make-up chemicals. For the

soda process the make-up chemicals are caustic soda or soda aah

' I! or a combination of both. Por the kraft process the make-up i ii chemical ia salt cake, though a combination of caustic soda and elemental sulphur can also be used. Analysis of chemical

costs in Tucuman has shown that the lower cost solution is the

use of the soda process. (See Table 1-1).

Only the soda process, therefore, will be analyted further

In the following subsections. i il [ I I

! î

I i

R-193A/07/3101 - Page 1/6 ITANTt

Regardless o( which pulping process Is used, ''deputing'

is an »sstnttal first step since for papermaktng only the

fibrous fraction of bagasse is of Interest. The non-fibrous

fraction of bagasse (which consists of dirt, water soluble

material, eptdermal material and pith) has no papermaklng 1 I properties and th« presence of pith cells is distinctly detrimental í to pulping and papermaklng operations. The pith cells, being fine, thln-valled, and having a large

i surface, are highly reactive and consume a very large portion •! ti i I of any pulping chemicals used. Moreover, the presence of pith cells i ows the pulp drainage rate and lowers the opacity of i i any pulp produced from bagasse. When pulp containing a large quantity of pith la mad« into paper, the paper la stiff, has

'Ü poor opacity and poor strength properties, especially tear.

In order to produce pulp from bagasse economically at

good yield with good properties and with minimum chemical

consumption, and minimum wear on pulping equipment, the removal Mi of pith Is essential, as well as the removal of fines and sand, mud, solubles and other extraneous materials.

The lack of appreciation of the need for "deplthing" and

suitable deplthlng equipment retarded the development of bagasse

pulping for many years. Because of the importance of bagasse

deplthlng the mattar la reviewed in soma detail in the following MI subsection. ( !l

mm K lì 'A/ ; '/ >. )1 Pa*e 1/7

TAUT«

The waoit li^u-s from the pulpu.g operai i 01, .ontain tie

organi, material dissolved during the palpmg o, « - at mr, and t>e

chemicals used for pulping. It la possible to re:ov*t 80 to <»0X

of the chemicals used for pulping, and this Is normally done in

mills prodjclng pulp from wood. However, In the ta*e cf bagasse,

because the quantity of chemicals required fcr pulping is

relatively amali and the pulp yield Is high (especially in the

case of pulps for cor-ugatlng medium and llnerboatd) the amount I! of organic material and chemicals in the waste liquor is relatively low. Also, the amount of wash water required for

good washing is higher than in the case of woodpuip. Consequently,

both the solids content of the spent liquor and the heat value are I I low. Becauee of the size of the proposed corrugating medium m ill (Model I) and the relatively low chemical charge and low

heat value of the waste liquor, a chemical recovery system would 1 not be economical. In fact, there are no bagasse pulp and paper I! mills presently manufacturing corrugating which have a chemical '• !i recovery system. In general, a chemical recovery system for a bagasse pulp and paper mill producing the types of paper proposed

Is economical only for capacities in excess of 200 to 250 tons i of pulp per day. Consequently, a chemical recovery system is

considered only for the two larger mills.

( !l î

R-193A/07/Ì101 - P*ge I/fi TAim

Because ihere will be no chemical recovery system fir the

166 tons per day corrugating medium mill, the eftlient iron, »'<

pulp mill will have a htgh pollution load and adequate provisim

must be made for effluent disposal. II 1.2 Bagasse Deplthlng Handling. Transportation and Storage (a) General

As mentioned previously, in order to produce pulp from

bagasse economically at good yield with good properties and

I with minimum chemical consumption, and wear on equipment, ¡ti "deplthlng" is essential. All of the mills producing pulp Mi and paper from bagasse use some form of "pith" removal as < i the first step in the process. The so-called "pith" removed I Is actually a mixture of true pith, fibre fines, dirt, soil li and foreign material. Any bagasse treated for removal of pith still contains appreciable quantities of true pith

since complete separation is almost impossible. In adduion, < !! unless the bagasse has been subjected to wet deplthlng or a 1 bagasse washing operation it will contain water solubles as r well, (0-101 on an oven dry bagasse basis).

The deplthlng methods used in commercial practice, ! ' li ignoring mechanical differences, nay be classified as follows: t !l I R-193A/07/3101 - Page I/9 I TAKT» (i) dry deplthing

(il) moist deplthlng I (ill) wet deplthing I I Ì (lv) moist or dry deplthing folloved by wet deplthlng I (v) biological deplthlng All of these systems, except to some extent biological

deplthlng, use some form of mechanical or hydraulic beating i or rubbing to loosen pith fro« the fibres, followed by a I Ir! separare or integral screening operation. I l| The aaount of pith removed in commercial practice by these deplthing method* may vary from 101 to 45X, of the I ¡I original weight of bagasse fed to the system and In addition, 1 If wet deplthing or bagasse washing is used, part of the water If solubles will be removed as well. » il The method of deplthlng selected for a particular mill and the degree of pith removal depends on local conditions

and the end product to be manufactured. Very complete

! deplthing is not as essential for the production of corrugating

medium as it is for papers requiring a high tear resistance.

Moist or dry deplthing may be preferable for some regione

because of the cost of fuel and the problem of pith disposal.

Deplthing Is also closely Interrelated with atorage, handling i ;ii! and transportation systems, and consideration of the system

as a whole, that la, deplthlng, storags, handling and trans- i li »-193A/07/3101 - F«s« I/IO portât Ion may dataralna tha aathod of daplthlng to ba uaad to obtain tha aoat affact Iva ovarii1 systaa for

local condition!.

Consaquantly, coni Idaring tha producta to ba Manufacturad

and local condltlona In tha provinca of Tucuaan, tha Important

faeton which aust ba kapt In mind with ragard to daplthlng,

handling, transportation and storaga ara:

- Tha lnganloa crueh cana for 3 to k months of tha yaar.

Thla is a rathar short crushing parlod aa coaparad to

aost sugar alll operations.

- Machanlcal harvasting may ba utlllsad.

• Tha total aaount of bagaaaa avallabla axcaads tha pulp

and papar alll raqulraaanta.

• Of tha gradas of papar and board to ba producad,

corrugating aadlua doas not raqulra a high taar

characteristic and conaaquantly doas not nacassarlly

raqulra a high dagraa of pith raaoval; but Unarboard

auat hava a battar taar charactaristlc, hanca affact Iva

pith raaoval la assantlal.

- Tha sita aalactad for th« pulp and papar alll Is 1/4 -

24 klloaatars froa tha sugar aills which will supply tha

bagassa.

- Thara ara good reads batwaan tha sugar aills and tha

aalactad pulp and papar aill sita. I I R-193A/07/J101 Pag* 1/ li (b) »IHM« Oeplthlng Syatewj

11; (1) Drv OtPlthlnt i Dry deplthlng It carried out at a bagaeae Molature conttnt of last than 35% and generally at a bagaaaa

aolature content of approximately 251. It ia applied : where, becauae of a ehort crushing acaion or long trans-

portation distancée the bagaaae «suet bt baled and allowed

; to dry in atorag*. Thla ayate* therefor«, cannot be

considerad for present purposes but some discussion alght

be of Interest.

The usual dry deplthing systaaa consist of bale 11 breakers, primary screening, hawser «11 ling In on« or asore stages, followed by screening for pith removal, 'Ü •«causa the bagasse Is dry and th« sticky sugars have b««n removed by f eraatnt at Ion, dry bagassa screening

oper at lone are relatively free of the "blinding" that '!! can occur If aolst bagasse still containing sugar« is

screened. Therefore, dry bagasse screanlng for pith i removal Is quite effective and sisas le fro« an operating point of view. However, beceuse of the large voluiee

eo weight ratio of bagasse, «any acreens and hammer mills

are required and «any conveyors. Thla «sans high capital !! •ad «alntenance costs and large building volussa«.

1 ( ! R-191A/07/3101 • Page 1/12

This hat ltd to the development of high capacity

hamster rat lit of special design for bagasse with rotors

and flails or hammers of special profile to reduce

fibra breakage.

These are fitted with Integral screens to rédate

or eliminate screening after haneaer milling.

The aore recent bagaase haneaer mills such as the

Moverotor, Horkel, and Ayotla machines do not use any

subséquent screening system, which means a considerable

saving In «paca and capital and maintenance costs. Some

of the nevar bagassa ha—r mills such as the Cruendler

and the »ieti-Ilvenco at ill use after-screening but I much reduced In site. Many of these dry deplthlng systems that use

pneusMtlc transport of bagasse also have some form of

a and and atone separation of varying da^tees of effect IVA-

naaa.

far lout disadvantages of the dry deplthlng systems

ara: high mechanical damage to the fibrea and high

health hasard causad by cha airborne pith particles

causing a lung dlsaaaa callad bagaaaosla. I R-193A/O7/3101 - Page 1/13 I taint (11) MoUt DtPltMna

1ü Mont depithing Is carried out at a moisture i i; content of between 40 to 55 percent, In other word», il In the range of molitura usual for bagaste taken II directly fron the crushing train. The former It the lowest limit at which th« bagasse fibras are itili

pliable enough to avoid the brtikag« that occurs in

dry depithing. Because of the letter breakage and ,iI Itu damage to the bagasse fibres, moist depithing is preferable to dry depithing. Ml Moiet depithing ia normally carried out at the ii sugar mills during tha crushing season and the pith

is returned directly to tha bagasse burning boilers.

Mi Only in unusual circumstances, where th« bagasse is

i ii supplied In small proportions from many sugar mills,

is moist depithing carried out at the pulp mill, where i i provision must than be meda for burning the pith. l ;i The milling equipment used for moist depithing is i: I essentially the same as that usad for dry depithing. This usually comprises single or double rotor hammer

mills of conventional or special design with or without

integral screens and attrition mills. However, because i I!;i the moist bagasse fibres era pliable and tough, the

damage and breakage caused svsn by conventional hammer i !l R !9iA>0V MOI - Page flu

m i î 1 « a** vf'v m, V ,'ti nt,,i wr.fr. iiillls i'I »p^ ' a¿

daalgn fo: bagasse ara u*erl both : : ? l'i«jts of fu»-

with the "pit*-" itmcvíd d> ...* to fibf b >-aka¿e ani li il fibra damage ara * 1 at i. /•• 1 y amali.

In the e a*« of avolat deplthirg, milla which have

•n integrai screening eystem that dc*a not req.fe

• ¿beequent *c-eening fcr p:th rtaioval have »ven a

gii atar advantage alo-a moiat baga» na still rom air«

' It •Mcky suga t and sapai ate rritm fcr mclit deplthlng

tend to "blind". Moat raoiat depltMng ayate«» that

it« pnauaiatlc ttanaport of bagaase have a owe fori« of 1 11 aand and etcna aaparation of varying degree of effectlve- neaa.

TVe tine advantages of moie: Jeplthlng at the M! •agar ail 11 axe: Mi - The "pith" that i# removed : a»i be returned dire fly lï to the augar »111 bagasse bollera and burned- pith I ! dlapoaal la therefore no probi*»*. - The "bagaase" purchaeed by the pjlp and paper mil

haa a auch higher proportion of fibre editable t o-

i papenaaklng than the whole or preecreened bagaes*

uMd in the case of dry or wet deplthing «ystea».

Thla la du« to the fact that lacet of tha pith and MI fina« have bean rearoved at the augar mill, consequently n i R 193A/07/31OI • Fag« 1/15 M* r*im

the aw mat eri «1 coat I« I «>'

Sin* moiit bagasse ttb:** s*e pliable thr fibr*

d amaga due to dap it hing ía nr.;-h les- tr-an in th* li i! rasa of d<-y dtplthing. li - Litt la CT no «ate» Is required. The prims duadvant age a of molt' depur'.ng are:

- Where external aneenlng is used for puh renoval

operating dlfflr.ltlee may be expected s - Pith removal Is not quite at effective a« with dry i or wet deplthtng.

1.1 The better known noiat deplthtng system* In »: i ii coeaserclal operation are: i - P1ADCO (U.R. Crac«)

- Grjendler (&» sandier Mfg. Co.) M! - Horkel (Parsone 4 Mhttteœoif) • Ayotla (Beiott-Jones)

< ü - MovarotOT or SPM (Swiee Put-to «lean Metallurgical i !i Corp.> - Itett-Hverco

In addition, both Sprout «aldton and Bacar Bro*.

have experlmnted with deplthlng système baaed on

•ingle dlac rafinara (attrition «ills). To date, no

i I!;i auch ay at essa have been Installed in a coanercial application. fi !l I I R -193A/OV3101 Pug» !/!»> 1 ; Any in« 'A tb» mela» dtplth»'« <" depl'Mr.g ¡ ey»t«a» «wjntlon«d will glv« rowoai at lvely «atufa- 'y patforwanc« and will '««ov* abet two th-.'d» of tf*

"pith" ( '.»finad at t'a« pith, dlit, epidermal matt-tal

and bag**** fin*«/, b^t non* of tht *cl,t d«pith«:i

'I will raaov« v«iv auch «or* than half of th* tra«

pith and of -out«*, do not t«iacv» any of th« watat

aolubla«. Alao, although all of th« ayataa« that ust

I pneuatat lc traneport will r»aov» toae of th« dltt and

t*nd, thoa« that do not, «r« not vtty effective for th«

raawal of it on« a and l*rg«i foreign «at«tlal that may 1 I occur in th« bagaee« if it la «achanlcally hatvaeted. I (m) m totnvm ii In w«t d«pithln«„ lnt«na« agitation or hydraulic ah«*r la uaed to eeparata th« pith fro» th« fibra. Any

•achanlcal lasact on th* b*ga«*« la reduced gT«atlv and.

• I! coneeauantly, fibra dasaage l§ held to an abtol .•.« f li «ilnlauat. Hat ¿«pithing **y b* u««d with aolat or dry baga»a»;

whaa uaad tc d*plth aolat baga«««, vat d«plthing remove»

not only th« pith and flnea, but aUo th« r««idual sagat«

and ochar eolubiaa a« wall aa «wd and dirt, and in «ON

ayataata atona« a« wall, thue yielding a vary clean

I «eplthad baga«a*. With dry bagaste, th« fibr« daataga f R-193A/07/3101 • Page 1/17 TAUT«

that occuit with dry depithing Is avoided Solubles

and fine dirt «re alio removed together with the p-.th,

and the fibre it conditioned for subsequent pulping, iE i! which compentatea fot tor« of the damage dak to ii fermentation and drying. If wet depithing is performed prior to storage, the atorag« lotset are substantially i! reduced becautt removal of tugara and other solubles reduces the extent of chemical reactions and makes

I It conditions in piles less suitable for the growth of «i 1 bacteria. I Vet depithing Is usually carried out at the pulp Ml mills where the waste effluent from the mill can be I used as the water supply and where provision for effluent II disposal mutt be made in any cate. At the tugar mill,

I ¡I it la better to use moist depithing eince the pith can

he burned at fuel. This reduces the pith dltpotal

' li problem with a gain in the economy of the operation. f 3 Although other systems exist, wet depithing can be •ccoaapllthed moat effectively by:

- Two hydrapulpera in seriet to loosen the pith followed

by rotary cylindrical screens In which ths pith is

«••had out of the bagaase. i I!;t t !l I R-193A/07/3101 - Pag* 1/18 I ITANT* Siagli hydrapuiper followed by a aand settling flume

I Ü and renoval of the pith and fine dirt In specially I i! designed hammer milla with or without integral f screens. (Note: Method 2 is usually preceded by moist deplthlng

or dry deplthlng).

The first ntthod Is a modification of the wet

cleaning syst*« for rice straw developed by foussef Fouad,

I \ Krauts Maffel and Stadler Hurtar at the RAKTA mill in

Alexandria. The system consists of two stages of hydta-

pulpers in serle* followed by rotary cylindrical screens

of Stadler Murter design. Bulk moist or dry bagasse is

fed Into the first pulper together with water to bring • i the consistency to about 2-1/2 I. If the first pulper is provided with sufficient power, ant Ire bales can be

fed to the pulper. From the first pulper, the bagasse

11: slurry flows into the second pulper. Stones and coarse «II foreign materials are removed by the Junk trap of the I pulper. Som* pith is extracted through strainer plate« In the pulpera, the balance of the pith and the sand is

I removed by large axial flow rotary screens fitted with

Internal showers into which the bagasse slurry from the

second pulper is discharged. In these screens, pith,

water and dirt, drain fro« the bagasse and the bagasse i !l I. R-193A/07/3101 - Page 1/19 U.COMMUrAOTI

It alio washed free of pith by the showers.

The system Is simple, effective and maintenance

costs are very low. The system can be used to depith

whole bagasse without prior moist depithlng and the

equipment is particularly effective in removing stones,

said and sand which can cause considerable wear on pulp

•ill equipment. Fibre breakage and damage are minimal,

but the initial costs and power requirements are rather

high.

In the second method a single stage hydrapulper

Is used to break up and/or to thoroughly wet and

condition the bagasse, and to remove stones and large

foreign material, as in the case of the first method.

Fron the pul per, the bagaste slurry then flows to a

sand settling flume and then passes on to the flooded

harnear mill wet depithlng machines. (These machines are

similar in design to the moist depithlng machines).

In many cases a pulper and settling flume for

bagasse washing to remove stones and sand Is not used

and bagasse Is fed directly into the flooded hammer mill

wet deplthere. This can be done If the bagasse is

relatively free of stones, sand and large foreign

material; if otherwise, wear on pulp mill equipment will

be excessive, as the flooded hammer mill wet depithers ~

R-193A/07/Ì101 - Page 1/20 •S.CONSWTAMTt

will removí but Litt le of the sand ard none ot the

stones and cotrn foreign material.

Since the bagaste fibres have been moistened and iE il conditioned and since the action of these machines when il operated wet is not a« drastic, fibre damage Is mu. h less than for moist or dry operation and pitr and dirt

rsaovai is more complete.

Hot deplrhlng Is more effective and produces a

! cleaner bagasse with a lover pith content than moist

or dry deplthlng. There are, however,

• disposal of the wet pith 'Ü - the higher moisture content of accepted bagasse In almost all caaes where wet deplthlng is used, > I! it becossss necessary to recirculate at least part of 1 ¡ the water used. This means the Installation of a pith filter to separate the pith from the water in circulation.

í The pith can be pumped to dlspoeal fields or de-

watered and trucked to disposal beds or it can be used

: as a soil conditioner on the cane fields if they are not too far away. Pith disposal la the principal !! prob lest.

« ii R li A/úli '",. - Page :/21 it • comwTAim

Il>r bflgii-^P t : ont wet cU, .'b;n« sy'tetr- (rtO-Bbl

urliti:», may b» «•.> vet that M will tut rod., r.

subitane lai q< antitUi of ntn into the p vip mill Ib il lin rr y >, which mean* added costs ff-' Uq <* II evapci at : <-n. Presse* can be used to remove tru^h 0f il the excel* wat*-, b t th?«fc aid to the vap'.'al, mainte- nance, ard operating cost».

(tv) Mon». or Dry PtPUMna followed by Met Dtp, it hing, S! Mola*, or dry n>oithlng followed by wet deplthing * i Involves t'"e lit of the derithing -y- em» described

1.1 previously in a two-stage operation to produce the í ¡i cleanest and mo»t plth-fsee bagasse possible >.§tng I prêtent day technology In the mcat economical manner. ii In the previous section (ill) it vas mentioned that the prime problem of wet depltbi^g 1« tbe disposal

of the wet pitb. Tf a portion of the pith is first

i amoved by moist or dry depitrMg and b -ned as fuel

! ¡i tha wat pith disposal problem la reduced. Such a two-

I atage depithifig Is most effective In the case of meist

deplthing at tïu rugai mill followed by wet deplthtng I at tha pulp and paper mill. Si ..» the moist bagasse flbrea are pliable, two-thirds or more of the pith may

!! ba removed and burned at tha ssgat mill without serious '¡I damage to the bagasse fibre*, thus leaving only a third I R-19JA/Ù7/Ï101 Page 1/22 I II.COMtWTAim r' les* of O-e pith to be removed by wet depithing,

! il T*o stage depithing Is leps m'-aai -f ;n t h* ^ &•,- í I dry depithing followed by wet depithing as ttt d;v depithing operation .annot be carried too tar r.efore

fibre damage and fibre losses become prohibitive

fa Pot the project under study moist depithing ât t >re

sugar mills followed by wet dfpUhing at the pulp mill

would give the best : aw material fo: the linerboard Ì For corrugai Lng grade pulp moist depithing would be sufficient, but we believe a bagasse washing stage at

the pulp mill vculd be Justified by savings in i ¡i maintenance costs on the pulp mill equipment. The capital cost is high, bat it is ¿^ opinion that the Mi reduction of w¿*r vates of the continuo:* digester feeders and refiner plates will more than compensate

the higher cost of the two-stage depithing system fot

• i! linerboa-d and the bagasse washing stage for corrugating i ii medium. r i (v) Biologic«! Depithing In some storage systems, notably the Ritter procès,, i: biological action is reported to aid In loosening the pith from the fibre making It easier to remeve. Since,

;i however, a t*o stage depithing arrangement suits the

requirements o£ this study, there appear i to be little i !l r

I R-193A/Ö7/3101 - Page 1/23 I IS . corn«?ANTS to be gained by introducing depttblng consideration«

I i! into the storage syst em to be selected. Ij Biological deplthlng, therefor«, vili not be I Ih il discussed in detail. II (c) Bagasse Handling and Transportation There are quite a number of variation« in methods by

which bagaste can be handled and transportad fron tha sugar

»Ills to the pvlp mill.

! That« differ principally In th« form In which the

bagassa Is transportad (In bulk or In balas) and tha »cans

of transportation (continuous by conveyors, pneumatic systems, 'Ií il flumes or pipelines, or in batches, by road or rail. I The selection of the most economical system to be used il for handling and transporting the bagasse depends on the following factors:

- the length of the cane crush season

< I! - the distance between the sugar mills and the pulp mill t li - the configuration of the terrain between the sugar mills and the pulp mill

- the availability and condition of roads and/or railways

between the sugar mills and the pulp mill

- fuel and power costs

- the availability of suitable water

- the quantities of bagasse to be transported l !l i

I-19W07/3101 - Page II7U

In general, for distances over 2 km between t'ie tugar

•lilt and the pulp mill a contIn.ou* transportation tyttem

uilng conveyor» or pneumatic systems is not economical, and li il for distances o\er 90 km transportation of bagasse in bulk II it uneconomical. Continuous systems may only be considered in reference to bulk transportation.

The following cotèrent s apply io the different types

mentioned. ! li Studies and large acale trials have demonstrated that pipeline transport of fibrous solids In fluid suspension

over considerable distances la efficient end economical, but

it hea not yet been proven in commercial operation, at least

.1 not for bagaase and the distances involved. Also, large

quantities of water are required, and the water becomes i ¡i contaminated by fines and soluble material which makes pipe- line transport Impractical in this particular case

' il Flumes have been used for transportation of bagasse i 3 mainly in conjunction with the Ritter storage systems. They are relatively inexpensive in themselves but the auxiliary

equipment such as pumps, screens and water recycling systems

are costly which makes euch installation uneconomical for

moet application«. Furthermore, water requirements ate

very high even in the "closed" systems because substantial

quantities must be sewered to prevent build-up of excesaive < il I I R-19U/07/31C1 - Page 1/25 i ¡; • *.gar ' neurit t at t on. Hence, for Tur-iman, fi. me trans- portation 1« aleo considered Impractical. i Pneumatic conveyors can be used to transport bagasse i up to 1 km, b.t power requirements arc vety high. Sich conveyors are usually advantageous In applications where il seveial changes in direction are necessary and where distances exceed ISO-200 meters,

Of the «any types of mechanical conveyors which are

available, the ones normally used for bagasse transport

are the scraper and the belt.

Scraper-type conveyors have been in operation ir. sugar ( il and pulp ailla for many years. They are best applied for relatively short conveying, for feeders, and multiple point 'i distribution. The major disadvantage of these conveyors is the relatively high maintenance coat.

Belt conveyors have also been utilized sxtensively

end may be used with advantage for both short and medium i !i distance conveying, They have high capacity, low power and maintenance requirements, and, If properly designed and

maintained, can have a very long operating life.

lech of the mechanical alternatives has advantages In

specific applicai lona but, overall, the belt type has proven

to be more economical for general uae over short to medium

distances. Over longer distances (up to 1 km), or for i !l I I R 19ÎA/07/31T - Pag* 1/26 dir». Moral flexibility, the pneumatic syetemmay b«

i ¡; neteeeary in aont caaes. Aeauming thai anv of i h» pap»r

I milla propoeed could be located within practual range,

it ha» been a «. s ..ine ci ti- estimating pi'poaes that belt í convey ra would be used

For distant»» beyond the range of lonvevors a batrh

t ran »pot tat Ion ayatem of on« type or another must be

considerad, and a choice ause be made between baled or

I bulk form.

I Traneport at Ion in baled fona haa some distinct

advantage where dlatantea exceed 9C km as reduced volume 1 < i SM an a lower «hipping coats, and savings very directly in

proportion to distance. In Tu'uatan, h owe ve T , distances

ars very short so that the additional expenses of baled

transport suh as the costs of baling, bale handling to

and fro» carriers, vary larga storage areas, and breaking

' I! the bales for SJuply to process would be more than offset

any savings in shipping costs. Thus, following the trend

of «oat modern installations, the bagasse from even the

most distant ingenios can b« mora advantageously transported

In bulk.

Although there is a good rail network In the sugar 1 belt this fora of transport is too inflexible to adapt well to the operating conditions of either the ingenio or the i Ii ^

I I R -191A/C :/U01 Pig« 1/2/ paper mill an.I, (or ihn reason v< • 1 J b- •" t h -liffuult i i; to regulate and unec oneinl. al S,n>c the pr^virce also

hat e good road »ysteei, by pr«fn of el lmination, th« i ¡j•s ¡I moat «ultabl« typt of vahlcl« ia considered to he t lie

tt^k or th« trailer. Self dumping »««1-t r aller rig» of

•bout 80 m^ capacity are presently operating successfully

tn auch nations at Paru, Colombia and the U.i.A. The

topography of the sugar-producing area of Tucuman is

almost uniformly flat so that capaciti«» up to 100 m i would probably b« feaalble. In contrast to continuous handling by conveyor, bulk i i traneportatlon In batches Inherently Involves higher costa. i The flow of bagasse fro« the sugar »ill "trapiches" 1« continuous thus additional equlpiaent and labour are i I! required in order to ace intuiate the loads to avoid delaying I the trailers and permit optimum eye Hug. Similarly, labour i I I and special equipment must be u»«d for rapid unloading at i !i the paper mill. i Also, sine« bagasse is very bulky, any batch trans-

portation system will require a relatively large number

of unit« to transport a given tonnage and, th«r«fore, the

coat of auch transport ia correapondingly high relative

to that of conveyor«. The greater the diatene« between

th« auger milla and the pulp mill, the longer Is the time i !l I I R-193A/07/31O1 - Page 1/28 cycle p«t unit, the more unit» ere required, and the

higher the ioti, However, the increase in < r>»t a it I not In direct proportion to the increase tn the distances, Í because the major part ot' batch transportation cost is Incurred in loading and unloading, which will remain

practically the sane per unit weight regardless of the

transportation distance.

Substantial savings in transportation costs can be i !i achieved by locating the pulp mill next to a large sugar mill nearest to the weighted ton-distance center of the

sugar Bills selected to supply the bagasse, thus permitting 'I maximum use of conveyors. Transportation coat of bulk bagasse by trucks from sugar mills 10 to 25 km distant,

will be higher by US $ 1.00 to 2.50 per oven dry ton than

that of bagasse delivered by belt conveyors (about 200 m

long) from the adjacent sugar mill.

• I! This report assumes that any of the mills proposed

could be located within 200 maters of one of the larger «JI Ingenios hence transportation costs are based on maximum use of belt conveyors.

(a) iMHtr ay°r*" i•*—

In the province of Tucuman, the crushing season for !! tugar cana is usually three to four months. Since the

operation of a pulp and paper mill cannot be considered i !l I I R-193A/07/31O1 - Pag« 1/29 1 ; economical on a seasonal basta and it must operate ¡ continuously th« whole year round, bagaase must be I l! atorad for the entire period when the sugar mills are f not crushing cane and producing bagasse. Il During the storage period bagasse is attacked by il micro-organisms such as yeaats, bacteria, moulds and fungi. Two types of biochemical attack may be Involved,

aerobic and anaerobic. In the caae of aerobic biochemical

attack the principal reaction is the fermentation of the

residual sugar into alcohol by yeaats and the subséquent

oxidation of the alcohol to acetic acid. The reactions 'I involved are, however, complex and other organic acids such ati lactic acid are also formed, as well aa many Mi entymea which will attack the cellular walls of the pith i I! and fibre. However, the most damaging attack on bagasse "fibre" is usually by moulds and fungi which are aerobic.

'È For baled storage, the extent of the reaction or ' ii attack la a function of time, temperature and moisture content. Fermentation of the reaidual augers generates

considerable heat and, if the bagasse is stored in a dry

|! place with good air circulation allowing good release of moisture, the heat generated will drive off the moisture

!! In the bagasse quite rapidly and will reduce the moisture

content from 45 to 50 percent to 20 to 25 percent, at which 11 I ?= I f.-l«)\A/07/iL01 - Pâg» 1/30 point veast?, btctfiii and fungi cann.it nuit ply and i >; attack ifátft almott completely. B*nastf at a :-i<>i *t «.re

e content of 20 to 2 » percent can ha atorad í-T ««varal i Ïit l yaara. it If air nrcjlatlon is hindered preventing the balad bagaaae fro« drying rapidly, oi if the bagasse it stored

under vary humid conditions, th« biochemical and fungus

attaint can ba »avare and it cannot b« stored for long

ii periods before fibra losses become serioui. Losses through

aerobic biochemical and fungus attacks may range fron 8

percent of the «Might of the Insoluble portion of the 1 11 whole bagasse to as much as 30 percent or more, depending on the rate at which moisture is dissipated, the final -ii moisture content of the bagaaae, and tha langt h of the storage period.

A« a comparable alternative to the storage of baled

•ii bagaaae with good air circulation, it is possible to

•tore moist bagasse In large bulk piles which have only ifI a Halted surface exposed to the air. The bagasse can be densely piled and thoroughly saturated with water to

|! prevent air from coming in contact with the bagaaae except

at the surface of the pile. Hack liquor can alao be used !! to saturate the pile in caaea where chemical recovery is

not uaed by the pulp mill. i ii I R • l«»iA/0 7/ 31-' Pig* l/U

•i! t'r.vr ^»'' i 1 11 i iins ai>v I * • ne- f it • '"" r t t ' «'- si «a' i

*rj ot <*. t>io< 'emu al '»action? *~* fi.-f<*d t • i> '• ** ' -n " ' il! amati obK cnndlt :<•'•• and the "at* of at t •« k« •• n* r «low*- i Sin:* It i« aen.bi f»ngl wMfh lau-e the -.es» daman- 1.1• i » II atte.*" U th.- l'-i.t*"'.. A*n>bu *'•»-< bv y»as>t «• bí'tt'u i ard »OLld» doee ••• eed on t-ie »j-fa<« *t / rapiti.v t< a i! depth oí a few in - « «• a^d f ihr* : «•** «-. 'hese - ' * ac * lay* a tan tmc -n t ~» an m v. #- V> p**ttnt »n e > ,iM tc t*n

montra. Hrwt^*r, this thin oj;eT lay»t a>pit ltu'.ii only a

J vaty «mall f»a,tior> of tht total pili, the inter te of vhi(h

la alnott naife ted. 'I 'Fib-*' lotie« for mol at baga«** in h Ik pilee or bagaaae in iat::-atel wet pile* «'* spotted to he re'atiely «I vfy low - in 'he orde" of VI o- le«a, aUlk ato; age of bagasse : an be K fc'11 y w^inuíd,

1 fpav~* remiliaaaan'.a a • fat amali*; and handling loasea t'f 1¡ love' than fcr bale» et or age. Al«o, lo««*«, through biochemical

attar*, aie lov* i' the pila la Urge.

Stri * p.t^ «rd fir.»' are me;* readily atta M>

danatr, large- fib'-« bu-dita, the iomi through storage at» • grattar for tha whole bagaaae than for dap it bed baga«ac i i! Tharefora, alno« the/ papeï mill mat pay for the bagaaae <>". a raplactnant fati ba*le, It ta evtdtntly prafetable to »tere M daplthed baçaaat. i i R-l9ìA/0;/-)ini - Page 1/v ITAMI!

> ure , j »he uo»t commonly ¡sefl wet stogane t e1 hr 1 q1;* •.

known a« ih» Ritte' fyntern, bagasse is s »[.»nder* »p, a «' iV

in vate' tnd fi 'med or piped to a tonerete slab, fitted with li ¡I Drainage ihanrels. where the thoroughly saturated bagasse l6 il a rjmclated In a t • '.e E« ess vat»r is «-filler ted In the drainage irnnti? a'-.d reused for »1.icing more bagas-" >rt>-

the pile Bagasse M 'e:laimed fmrnth» pile h>d-a^lle al 1v I ir »larry fcrm tr.rc.gh the same nyst»m ot channels either r 8 manually or mechante al 1 y A lactic acid solution i» added to th« watt' asad for sluicing the bagass» onto the piles

In storage. The fermentation of the residuai sugars Is <1 ti primarily by lactic acid bacteria wh«:h lower* the pH and the danaging aerobic at'a:W on th« 'fibre" bv fjngi is

suppressed. Change» in bagasse quality and leases of fibre i l! in storage, even over a very extensive peTlod, are 'epr»r:»d to be snail.

• I! The titter storage systen ha* the advantages 'hat, spare

reeuttenant» are relatively snail (even les« than for bulk

storage of moist bagasse) and that, although capital costs

are appreciable, the overall expenses fo: storag* and

handling are less than one half the costs of storage in

bales. Alto, the «aterial can be stored over lengthy periods,

Mi reportedly with minimal deterioration. It Is well .«ulted to

applications where the sugar mill is • lose enojgh to the pulp i !l

ntfttaVk 1

I P.-193A/O7/3101 - P«ge 1/33 I tAMtt i !; mill to per.uit ( ont Inuwji delivery and lends Itself well to combination with se<-o"-dary wet depithing or washing.

! I In the province of Tue unan the rr ishlng season la only f 3-4 months ao that a large atorage capacity (245 days supply approximately) would be essential at the paper mill. Also,

as mentioned In 1.2 (c), conditions fave t bulk transportation i ! and, by extension, Indicate bulk storage. For reasons of !i overall economy and suitability, bulk atorage of wet bagasse, either by Utter or other wet ayate«, la therefore the obvious I !It recommendation. To further miniatile storage losses and alao

to enaure reasonable uniformity in the characteristics of 1 ! I bagaaee from atorage to process, the system should be organized on the "firet-ln-first-out" principle.

1.3 FuUln» Procesa

Conventional alkaline processes aa well a» patented systems 1 such aa Cual, AyotU and PIADCO, which are alao alkaline, car be I! uaed with either soda or kraft pulping. Aa mentioned previously,

in the caae under study the soda pulping is more economical. All

of theae alkaline proceeeea are basically similar, all will ( produce satisfactory pulp and all are suitable for the size of

pulp and paper milla under consideration.

The Cusl process differs from the others in that cooking

takes place In two stages with fractional screening after the

first stage to remove material that has already received f !l R-19ÎA/07/3101 - Page 1/34

sufficient trutntnt. In the early stages >f bagasse pulping

ttchnology, whan deplthlng wat not the best and cooking

conditions tended to be mora savare,there was perhaps considerable lg il Mrit in fractional ecraenlng, aa thle not only removed pulp li already sufficiently cooked but removed conalderable pith aa wall.

The result waa two pulps: one, a top grade bagasse pulp,

tha other a alov-dtainlng low grade pulp eultable only for the

production of low grada cardboarda. Today, with improvement a in J deplthing and leae eavere cooking conditlone, it has become li possible to raéoslo« tha two pulp fractions to obtain a good Mi grada of bagassa pulp. However, on tha baala of results obtained with modern daplthlng and singla stag« cooking techniques, (aa «i in all other procassas), tha Cusl process haa no particular l ji advantage for tha production of bagassa pulp of the types under consideration In this study. Tha two-stage cook and fractional If intermediate ecreenlng add costs and complications and result in a dilute black liquor which meana higher costs for chemical

recovery.

Tha Ayotla and »eadco procassas ara virtually Identical

and dlffar but little fro» tha conventional alkaline pulping

process.

I il i

I I R-193A/07/3101 - Pag« 1/35 The main ftat.ra of both proc«ss«s í» th* pat«nted

d«pithlng machín«, and It It only in th« mechanical featur«« lì! of th« dapithlng machines that th«r« la a dlat lngulshabl« i dlff«r«nc« batwccn th« Ayotla and Paadco procelle« (and, of Il court«, It li quit« poaalbl« to uà« Ayotla or Peadco deplthlng i equipment with any bagan« pulping proc«aa). r ! A f«atur« of both th« Ayotla and th« P«adco proc«a« la the i location of a flb«riiing r«fln«r in th« blowlint of th« continuoua dlg«at«r b«tw««n th« dlg«it«r and th« blov tank. Moat conventional ! alkaline process alila hav« th« flberltlng r«fin«r after the

blow tank. Th« uee of blowllne fiberlters la, how«ver, by no 1 i n ••ana unique or «pacific to th« Ayotla and P«adco proc«aa«a. Howl in« flb«rli«re ar« ua«d In a number of wood pulping proceaaea.

we can a«« no baalc raaaon to favour on« "proccaa" ovar th«

other. Since th« conventional alkaline procesa doee not Involve

proprietory or patent consideration«, thia study is baaed on

• I! ualng the conventional alkaline procaaa with a soda cook or, In ' 3 other words, the conventional soda procaaa. Although, aa mentioned prevloualy, chemical recovery ay at ems

can be readily applied to the Ayotla or the Peadco process (and

to the Cual procaaa aa well but at greater coat), to date no

•111 ualng any of these proceaaea had been equipped with a

cheuleal recovery ayatea.

i I R-193A/07/J101 - Page 1/36 I II. COMMUTANT« However, a number of conventional alkaline pulp milis have

bean built with full chemical recovery systems and Stadler li! Hurter have been consultants on several. f ¡i 1.4 Fregarat ion and t«covery of Chemicals Por the soda process without recovery the make-up chemicals

ma/ be caustic soda or soda ash caueticited by means of burnt

lime. As can be seen from Table 1-1, if no chemical recovery

is Involved, caustic soda (NaOH) is the more economical solution. ,1 Moreover, caustic soda has Che advantage that a stronger cooking liquor may be prepared which will offset to some extent the

water Introduced in the digester because of the high moisture < il content of bagasse after bagaste washing or wet depithing. The waste liquore from the pulping operation contain the Mi organic materiale dissolved during the cook and the chemicals i i used for pulping. It is possible to recover 80 t .. 901 of the •oda used for pulping through the ua« of a chemical recovery

Mi system. There are several recovery systems that could be applied. Mi All of them Involve evaporation of the waste liquor to bring it r to a concentration at which it can be burned, followed by burning of the liquor in a furnace or reactor of some type. In

í the course of combustion heat le generated from the organic

material in the waste liquors and this heat can be used for the

production of steam. As a result of combustion of the waste

liquore, the sodium salta are converted to sodium carbonate, ( il

MÜkMMaMiü^i I R-193A/07/31OI - Page 1/37 1 ¡I II . COMMUTANTS which can then b# cau*tlcieed by burnt lin» to form freah l cooking liquor.

Since,depending on the efficiency of recovery, It may be i "I expected that from 10 to 20X of the chemicala will not bt ; li racovarad aome make-up muat ba auppllad to maintain tha chamlcal balança. Thla can ba In tha form of aodlum carbonata added 1 bafora racauatlclilng or aodium hydroxida aftar rtcauaticitlng. «I Tha formar would ba uaad in thla caaa for raaaons of economy. For tha primary racovary cycla, aavaral ayatema ara available; [ - tha conventional recovery boiler ayatam in which the black I liquor muat ba concentrated to more than 451 aolida in a 1 il multiple effect evaporator and at 111 further concentrated by I meant of flue gaaaa before being burnt in tha furnace. I The molten amelt of aodium carbonate formed la then dlaaolved in water and recauatlcliad. • i: • the fluid bed reactor ayatam, in which the black liquor muat be concentrated in a multiple effect evaporator to over 301

aolida before being added to the fluid bed reactor where the

liquor la burnt reaulting in the formation of aodlum

carbonate pelleta. Theae pelleta ere aubaaquently diaaolvad

and cauatlclaed. 1 - the Torrea-Xucla procese, In which the black liquor must ba li concentrated to 401 aolida in a multiple effect evaporator

followed by carbonatlon with the furnace flue gee«a to I ! II • I-193A/07/3Ì01 - Pag« 1/38 •• • cemmrAam

precipitata the lignln which la filtered out of the Liquor.

Tha recovered lignln la then burnt in a apaclal gaalfler

ratort furnace and the filtrata la further concentrated iE i by flue gaaea from the gaalfler furnace and burnad in a II bollar. The eme It of acilum carbonata formed le than •"I dlaaolved and recauatlclxad. F I! Of the thraa ayatema tha flret haa the h Igneat thermal I efficiency and la tha ayetem moat commonly uaed. It la aleo,

I it! hovevar, tha moat expansive ay at a«, a* can be aeen from Table « < 1 ¡I 2-1. The aecond syatam la leea efficient thermally and uaually t can provide only sufficient at a am for the required concentration X w of the spent liquor. It, however, has the advantage of being 1 much lower In capital cost. S The Torraa-Xucla process is the least uaed and least known.

i ¡i It la primarily suited to small mills (60 to 80 tona per day). i The capital cost la low for small mills, but increases rapidly with increased capacity and aven for medlum-alsed mills exceeds

the coat of conventional equipment. An advantage of the process 1 la that by a minor modification of tha system, it is possible

to eliminate much of the silica from tha waste liquor, which is ! |! of considerable inter eat in the ceae of the recovery of spent

liquors from the pulping of agricultural residues which often i ;»i! contain appreciable quantities of silica. 1 m H -li ÎA/C 7/3101 - Page 1/39 • • CaHMfiTAMTf

Alth(».¿h hJ tu niX of chemicals tan be reiovered, the cost

of a conventional chemical recovery system is high and dls-

p-cportionat ly so in t tie tase of small mills Because of high

chemical consumption and high solids content in the spent liquor Il it can usually be justified in wood pulping. In the pulping cf bagasse, however, particularly at higher

yields, the amount of chemicals used Is greatly reduced. Also

the organic content of the waste liquor is much lower with !! It consequent decreased fuel value. Thus, chemical recovery for H smaller bagasse mills is usually uneconomical.

1 !¡ In geueial, a ciieiuical líiuvii; a/aLéiu fui a bagaaia puif>

and paper mill producing the types of pulps proposed is economical

only for production capacities in excess of 200 to 250 tons per

day. Consequently, in this study chemical re overy is considered

I only for the two larger models. I Because of the low solids and heat value of the spent liquor, any gain through high thermal efficiency is marginal and c consequently, the fluid bed reactor type of recovery system has

been selected for primary chemical recovery in this study, as It

is much lower in capital cost, as can be seen from Table 2-1

An analysis of the costs la shown in Table 1*1, and shows that

reburnlng of lime would be economical, and again a fluid bed

reactor has been chosen for this purpose because of its lower

capital cost.

( J i è • UNIDO i;

i July 20, 1972 i K193A . 07 3101 ÌUvT Novambtr 10, Ì972

TABLE 2-1

i CAPITAL CORI Of COMPIRE IICOVHY SYSTEMS

ti Coat (Million. U.S. Dollars) Î* Pulp MUÍ » • Modal ir Siti Conven- Pluldlaad Torras- :* No. 1DMTD t tonai lad Xucla II ti :i il !> il li

¡; • f sì:} »: Si i! l !! il

Ul;» il •4 t © R-193A/07/31OI - Page 1/41 Il . COMMIT AKT»

The Torras Xuc la process vai not selected despite t tie

advantages of silica removal because the system, even for the

smallest mill studied, would cost mor« than the reactor type

of recovery system and Is more complicated to operate.

Reference has been made In several instances to the "pr/imarv"

re.every cycle. This is be-auie, if suitable economy it indicated

a secondary cycle «ay also be ue«d for »he recovery of-tre lime

consumad In recaust U lzlng the spent liquor.

I Usually In this ty>e of system the sludge (lime mud) resulting [ from the recaust icisat ion process is dewetered and oxidized by burning in a rotary kiln to form quick-lime which can then be

used again. The mud may also be burnt in a fluid bed reactor.

Compensation for losses (make-up) may be limestone added

before burning or burnt lime added afterwards. In this case

I limestone would be uaad. I A point to be notad with regard to chemical recovery is that silica in the bagasse introduced through mud and sand will be

Í dissolved in the cooking process and appear in the cooking

liquor, where it will cause problems in the chemical recovery

system. It is, therefore, essential to remove sand and mud

before the bagasse enters the digesters, not only to protect the

pulp siili equipment, but also to eliminate recovery cycle problems.

This Is another reason for providing bagasse washing and wet

deplthing. I R-193A/O7/J101 - Page 1/42

Because, rf^ariiUts of precautions taken, same sili i will

enter the system, It will be necessary, when hemh al recovery

I Is used, to use more lime than normally required for caustic izing I I and the white liquor clarifier will have to be larger because of I lower settling rate. All of the lime mud should not be reburnt, a bleed-off will be required to control silici ¡rv

recovery system. 1.5 Ninni rum u Using the soda process the yield of pulp whan cooking pulp I for corrugating madiua will be approximately 671 and 58.51 in »: the case of liner board on the weicht of dcplthed baiasse. Bagasse

requirements are given in more detail in Section K.

1.6 Chsalcal Require—nts

The consumption of caustic aoda may be taken as 87. on the

ovan dry weight of dcplthed bagaase in the case of corrugating 1 !! > I! medium r.nd 101 in the case of linerboard. On thia basis snd using the yields given In Section 1.5, the caustic soda

consumptions par ton bsgssse pulp are 120 kg. for corrugating

medium and 170 kg. for linerboard. 1 In the casa of Model I there would be no chemical recovery. t la the case of Modal II and III, there would be chaaical recovery (tOl) and sodium carbonate would be t.ie basic make-up chemical

' Ü together with 1 lmmstone or lima. ( !l I R-193A/07/3101 - Pag« 1/43 I n.cmumum The chemical conaumpt inni per ton of pulp can thus be il calculated i o be aa per Tabla 3-1. i TABLE 3-1 CHEMICAL CONSUMPTIONS PER OD TON PULP i I Typ« of Pulp Chemical Conaumptlon per Ton Pulp

Modal I '¡I! Corrugating 120 Kg NaOH I* Il Modal It Linerboard 45 Kg Na2C03 + 90 Kg limestone

Modal III

Corrugating 30 Kg Na2C03 + 60 Kg limait on« •i C0 I LInarboard 45 Kg Ht2 3 + 90 Kg limaiton« I 1.7 irttUw i Based on th« foregoing, the proc«aaca selected for the i ji production of pulp in this atudy ara: i 1) Moist dapithing at th« sugar mills 2) Bulk transport of bagaaaa to th« pulp still

3) Bulk storage of tha bagasse

4) Two-stage (moist-wet) dapithing for linerboard grada pulp

and moist dapithing and bagassa washing for corrugating

«sodium grada pulp

5) Bagassa pulping by th« soda process 6) Cooking liquor preparation frost caustic soda for tha smallest 1 still with no chemical recovery 'I 7) Chemical recovery for the larger mills using fluid bed reactors and soda ash and lima stone make-up. 1

il R-193A/07/31OI - Pag« J/1 il M.COMMTAMn PAP» MACHINES

J-i cant»! li In Section C It hat been determined that the most logical

papara to ba in va at 1 gated for utilisation of tha bagasse fro«

the lnganios r>f Tucuman would ba llnerboard and corrugating

...... ••• • •• - *-« medium. I.e., tha component a lament s of cont alnerboard. Taking i; Into account tha widths of f lut ing «achinas presently installed In various converting plants it was further determined that the

I optimum paper machine widths t o ba conaidered would trim 3.2

meters and 5 meters. Tha rated productive capacities of such 1 machinée, on average standard weights and average practical I apeada, would be 166 ADTD of corrugating medium from the 3.2 meter, end 330 ADTD of llnerboard from the 5 mater unit. '¡i The possibility exists that paper machines of these widths could be manufactured, at leaat in part, in Argentina by an 1 < i ' exlatlng Ucenaee of lâcher Wyes GmbH. It has been at atad that i V the Argentine plant can manufacture to a maximum wire width of ¡I 5 matera but thla could probably ba increased slightly if neceaaary. It is, however, reported that costs and delivery

tima for Argentina equipment slight be somewhat greater than for

1 •achina« of foreign manufactura. Foreign exchange consideration

would have to ba evaluated in final aelection of a auppllsr. i ¡!;i I A- Ì93A/07/3101 P*ge J/2 I TANT» Tht actual weights and spaada which wer«" averaged to darlve i >; theae rated capacititi were aa ah own in Table 1-J.

1 ! TABLE 1-J

STANDARD WEIGHTS AMD SPEEDS FOR

Corrugating Medium 125 26 360 1180 ' 150 31 300 980 170 35 265 870

Llnerboard 125 26 410 1350 1 175 3« 300 980 i». 225 46 230 760 300 61 175 570 l !í - Mote: Speed a adjuettd for bagaeae furn lah

> It will be noted that within each product category the M! apeeda are in inverse ratio to the weight a. This relationship is quite accurate In practice so that for any product-weight mi «, 1 the estimated production rates may be expected to remain constant. ? The estlaated speeds and also the paper machine efficiencies i usad in tha calculation of ratsd capacities have intentionally

been Maintained towards tha conservative aids because the

behaviour of bagasse-based furn 1 she e varies over a considerable

range from one application to another. The possibility, therefore,

exists that actual productions could, to some extent, exceed those

estimated. I 1.-193A/07/31O1 - Page J/3 I Il . COMMUTANTI i j; J.2 Proposed Paper Machín«« In recent times numaroua variations of "formers" for paper i machine v«t ends hav« been developed and some of them have been r proven In production «ppllestions of bagasse furnish. It has i also been reported that the Inclusion of « size-press has some advantage In the manufacture of llnerboard. Whether these and i !! other technological modifications could advantageously be applied would, however, form part of a detailed feasibility study for the

le specific project selected for implementation.

For purposes of this report, it ha« been assumed that the

' !! paper a¿*«.hiu*« io be in at. aliad wuuld have the hetdbox-t ourdrinier t ¡i type wet end configuration which has successfully served the paper Industry for many years and also that, in other respects, • i; the machines would conform generally to the arrangement which has come to be regarded as standard. The capital coat estimates 1 !! derived on this basis are considered to be reasonably accurate,

• !¡ particularly since any departure from standard would have to be 1 f justified, at least in part, by capital savings. The suggested paper machines are therefore quite similar as

to the principal components, although the linerbosrd machine is

somewhat more elaborate. It should be noted at this point that, Mi if desirable, corrugating msdlua, or even bag, sack and wrapping papers, can be produced on a machine designed for llnerboard. A

I li • Il IMfor JTiWêmr R-19 VA/07/Ì101 - Page J A MMMMI. COMMUTANT«

re«. >iiPe dnngnu1 for production of corrigatiiR rrwdi.m is.

hi *vft »s!"1 ttd to manufacture of '>nlv Muf fyp**

11 For comparison the proposed principal features if each (I machine ire o it lined .n Table 2-J. II In »ddltion to the items lifted In the tanle, both paper I machinei wo.Id have closrd dryer beds and apptop. iat* ventilating. I equipment, suitable vac urn systems, lubruation -ystems, all II controls required for efficient operation and all other

1 I» miscellaneous assentisi auxiliarles. it Paper machine wires are made in Argentin« up to 5.5 m width 1 ! »! and press ana ¿ver felts are readily available from at leaat

two different national manufacturers. There should, therefore,

be no difficulty in clothing machines of the proposed widths.

J.3 ?r°P9lt

1 ;! waste paper.

Also based on Peruvian expérience, a satisfactory linerboard

can be made using 70% bagasse pulp and 307. long fibred ktaft r>.,lp. I fi I! In both case* the furnish will also contain small quantities f i I ( of alun and six* and In the case of linerboard, starch as well. ;«

( !l • I : 1 -! i- 1 SC > m ' t C m « ta •v • * o • 0 (/> » ta <« X £> X I "•* • -a t 4C o ta ta i J--> M * X o. a —• \T\ b >. T3 M 41 *l ta » «i 3! •t .<- 00 "O I "* 3 i> — > 0 I e -o m « ~ 0 — M V ~« b "0 «1 U 0 M a I U d ti 3 ta s X H c ï • œ ta C i § • 00 V O -J z 1 X X >. §• c 3 TS •o se M ta M 0 c ta C 1/1 TO C J* l. * £ ? 3 u a I «£ >/"l ta ta !» c ^ •>. I >s >> c -• x x % S « g X ta ta « « « ta ta M 0 u <• M ;» £ ta m o %) M m io f - kl Í ta X X u ta Ç X c « -* ta 3 T3 « » M • 3 5 0 <« I o. <• M m m -H ta • • ta e « « U M ta M U-l « « S! m o ta ta « U 0 C i« o w w 00 ta « t 0 X >/s I s s. Si «SU c* wn a. • H i u w» ! t(A f H

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«N

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I R-193A/OV3101 - Page J/7 I TAUT» Assuming average consumption figures tur alum rtslii, sta-ch i i; and a 0. 5 white water losses and a pappr moisturt nf 67., the i I! coB|)Osition of the furnish to the paper machines would be (on i an O.D. basis) as follows:

i TABLE 3-J i ti O.D. PAPER FURNISH REQUIREMENTS i PER A.D. TON PAPIR (61 MOISTURE)

I! Corrugating Medium Slush bagassa pulp 830 Kg. 1 90 Kg. I Alum 15 Kg. Sise 10 Kg. lì Llnarboard i Slush bagasse pulp 620 Kg. Imported long fibre pulp 265 Kg. Alum 35 Kg. Site 20 Kg, il Starch 5 Kg. I i I ü¡ J.4 Pulp Requirements I Based on the furnishes given in Table 3-J the annual pulp I requirements are as shown in Table 4-J.

i !l i I oí si I il -1- II ol co a i-i 3 U) BU C O O o J= 0 IO sO í w V H 00 in vt S¡! 3 in --4 M -£> en vO c/5 <0 Q -* vO 00 • 3 ° 11

a 3 m o< e 0 TJ H O o « «n tn u 1 f» r» i; u a 0 • * o> o «s »M «i MI ti

12 S kl a e m o O i S § 8 « • i ? S O * ••* « •-« ;i | U .; g r o . * r «M >

,< : i î '• * R-193A/07/1101 - P*ge J/9

J. 5 Paperm«ktrig Chemical Requirement»

Based on th« quant it Iti developed in Table 3-J the annual I peparmeleing chemical requirement» will be aa follow«:

TABLE 5-J

ANNUAL PAPERMAKINC CHEMICAL REQUIREMENTS - METRIC TOMS

Annual Board Chemical Requirements Product ion (Metric Tons) Product A.D. Tons Al-im Size 1"* Starcii Model I ,1 Corrugating Medium 56,440 850 560 I I Model II Linerboard 112,200 3,930 2,250 560 I ¡I Model III Linerboard and Corrugating Medium 168,640 4,780 2,810 560 i I! Hi

|! Ml ili I I R-193A/07/3101 Pag« K/l BACASSI KlQUIIllMEWIS

K.i introduction li In order to determine th« quantities of bagassa which I must be purchased from th« augar alila it is necessary to I consider the various losses which will occur from the time the bagase« leaves the crushing train until it is manufactured into

1 pulp. For simplicity such calculations are made on an oven

1 •.irv basis. í• Íit Th« losses to be taken into account are: - moist deplthlng loss,

wet depithing and washing loss, ,1 - handling and storage losses, - pulping loss

A typical analysis of whole bagasse on an oven dry basis

would be:

Water solubles 8.01

< i: Dirt (mud, sand, stona«, leavea) 5.0%

Fibre fines 4.SI

Pith and epidermal cella 21.01

Fibre (suitable for pulp) ft.»

1 loo.oa

K.2 Pealthin« Loaaa« !! If it la assumed that on moist doplthlng, on« half th« dirt,

all of th« fines and slightly mor« than on« half of th« pith and i !l ifí-r R-193A/07/3101 - Pag« K/2 ITAMI*

epidermal cells are removed, aa well aa a small fraction of the

clean fibre, and that the water eolublea are distributed mote or

leaa equally between the pith and fibre fractions, then for

100 kg. whole bagasse entering a molat depither, the discharge

would be In the following approximate proportions:

Whole Accepted «ejected Material tiiiiii ti "nfrrt" aa "Fith" kg. kg. kg.

Water eolublea 8.0 5.5 2.5

Dirt 5.0 2.5 2.5

Fibre fines 4.5 .0 4.5 *: Pith and epidermal cella 28.0 13.5 14.5 Juo I Clean fibre itti} 48.5 10O.0 70.0 30.0

i.e. the loss in molat depithing le 301 of the whole bagaaae

and the analysis of the accepted fibre fraction is:

Water solubles 7.81

Dirt 3.41

Fith 1».3X

Fibre iliA

100.01

Twe> dlffereat type)* ef treatasmt «re proposed fer the

eecenelary stage la the proceaelng of eh« bagaaaet I R-193A/O7/3101 - Pag* K/3

•ü - washing and wet deplthing for bagasse tob« used for I li manufactura of llnarboard grada pulp, I - washing without wat daplthlng for bagaaaa to be used for I making pulp for corrugating medium II In combinad washing and wat daplthlng half of tha water I solubles, about 95% of dirt, and about 501 of th* pith, as wall I aa a small fraction of th« clean fibre are removed, thua for 100 kg. molat depithed bagassa entering the wet washing and I ¡ daplthlng stage, material of tha following composition would «•:

Moist Depithed Accepted Rejected 1 Hater til. II "rabil" as "Pith" kg. kg. kg.

Water solubles 7.8 3.9 3.9 1 ¡i Dirt 3.» 0.2 3.4 M! Pith 19.3 9.6 9.7 fibre -12*1 ÌLI -LÄ

I I! 100.0 •2.0 18.0

i.e. loe* in the washing and wet deplthing stage is 181 of th«

weight of the moist depithed bagasse end tha approximate

composition of the material entering the digester 1st

Pith, dirt and solubles 16.7% 'S Clean fibre 83.3% ( !l R-193A/07/3101 - Pag« K/4

In the second caie where only bagaste washing Is required

after moist deplthing, about half of the warer solubles and 90%

of the dirt are removtd with only minor losses of pith and fibre,

thus for 100 kg. of moist deplthed bagasse entering, the

composition of the discharge would be: ! Accepted Rejected Mimiti JjUiU. ti "rftrt" as "Fith" kg. *•. kg.

Hater solubles 7.8 3.9 3.9 í I Dirt M 0.5 3.1 Pith 19.3 17.3 2.0

1 Fibra 69.3 ALI -LP.

100.0 90.0 10.0

Nane« loa* in the bagasse waehing ataga la 101 of weight

<Ü of moist deplthed bagassa and the proportion of the material

entering the dlgestsrs is:

Fith, dirt and solubles 19.21

11: Fibre auitable for pulp SO.8%

The total loas of material during storage has been assumed

to be about 7-1/21 (Since, during the crushing season the bagasse ! would be atorad for only abort perioda, if at all, this fi gut e I l! representa approximately 101 loaa in the portion of the bagaase I í which muet be atorad for a longer tima). i1 ¡i R-193A/07/31CI - Page K/e II. CONNUT A«TS

K. ) Pulping Lott

The final lojs of material takes place in the procer« of

cooking, washing, screanlng, etc., which is used to manufacture IB i! the bagasse pulp. In order to develop higher strength pitrpertits II In the resulting pulp a more thorough processing is given to pulp for li-etboard than to pulp for corrugating medium. From previous

experience therefore, the yield of pulp based on the bagasse

fibre entering the digester has been assumed at 58.57-, for llne-- f ii! board grade pulp, and 671 for corrugating medium pulp, i.e., additional losses of 41.51 end 331 respectively.

' !K K.4 Summary of Losses and Baiasse Requirement» for Pulp Production I I! Incorporation of all of these Losses thus shows the amounts I of bagasse required at the different stages of the process as follows (Figures in 0.0, tons): I Linerboard Ccrr ¡gating Medium Quantity Loss Quantity Loss

I I'- 0. D. f.Lly processed 1.0 1.0 ll Pulp

f Pulping loss (41.5 & 331) 0.71 0.49

To digester 1.71 1.49 Hashing & Wet Depithlng Loss (18%) 0.38

Washing Loss (10%) 0. 17

Fron Storage 2.09 1.66

!! Handling & Storage Loss (7.5%) 0.17 0.13 From Ingenios 2.26 1.79 i'rimary Depithlng Loss (301) 0.97 0.77 i ¡i Whole Uagrsse required 3.23 2.56 R-193A/07/3101 - Pag«- K/6 t. COMMUTANTI

Htnct the amo >nt • of bagaste which the ingenios musc produe

to make one ton of either type of pulp would be 3,2 3 and 2,5h

ton» respectively (Since bagasse from the crushing t tains av^tan<• •*

501 moisture these amounts represent 6.46 and 5.12 tons of whole li bagasse, wet basis). Since primary depithlng would be done at the sugar mills the

quantities for which compensation would be required would be

2.26 OD tont/ton pulp and 1.79 00 tons/ton pulp. The remaining

portion would be pith returned to the Ingenio boilers and would ,1 amount to 0.97 OD tons/ton pulp and 0.77 OD tons/ton pulp for each case. 1 [ i from Section J. 3 830 Kg. bagasse pulp are required for the production of ona AD ton corrugating medium and 620 kg. bagasse • s pulp for one AD ton of llnerboard. Consequently, the annual M! bagassa requirement for the three models are as shown in Table 11: 1-K. I ü

!!

( !l ._, I ¡. o « 5* •* « o o o 2 fi 00 -* *:S SO « « «e H o* "- 1 00 1 ¡> p -- • I o o m CM vC ¡I - 3 I V 8 I ». i |1 1 Id* 1 « i • X • M «•oc O O IO « o I • kl h ¡È S <* • s . » •* « o- o ^H «s w* • • —4 M 3 íOMO ^ IS•« • "Os «i 9 « M a.- m o o S s s a ^ •> «s N n r» »1 « l*o «> n"> «* 3 aie ** M ¿ 9 o M « ! M

«1 h m O 3 j : 3 s S «4 H » <# M 5- s Î S M M • « cr> « -* S « O «* <• r* 8 • 0. • V* p4 O [ E 3 2

! ä o 8 Boar Toas 3 1 1 et loa I * s S£« << ! li 1 •H 1 s •ri i \ 1 i 8 •H 2 fe m -1 1 M •o •o IS et o 1 M M 0 ! *-i Id i 1 M 9 Bf U ai h! O - S - 8 «M •31 o i0 j K r. r i* > 41 V ! I i «* R-193A/07/3101 - Page L/l TAUT»

L. COST Of BAGASSE

L.l Cfnera,!

Cost of bagasse it sometimes understood to mean only the

i fuel value replacement coita but In the pulp and paper industry li thia term uaually means total coat of bagasse moist deplthed at the sugar mills and delivered to the pulp mill. At times the I term "cost of bagasse" may also be applied to bagasse fibre fed to the digesters. For this study the term is applied to the f cost of moist deplthed bagasse delivered to the paper mill. There are many factors which influence the cost of bagasse

1 !! delivered to the mill of which the most important are: I il - cost of replacement fuel, - length of cane crushing season,

- sits of the sugar mill,

I - power costs,

- labour costs, 1 - transportation distance - sugar still to pulp mill, ì - state of bagassa handled - bulk or baled, - means and type of transport selected - transportation costs,

- primary deplehlng system selected - operating costs,

- amount of incentiva payments demanded by sugar mills (if any) :

\i

[1 !!l Jtarflar JTi R-193A/07/3101 - Page L/2 WMMMil. COMMIT AMT«

Where cost of bagasse refer« Co bagasse fed into the

digesters the above coste would be Increased by the capital

charges applicable to equipment for bagasse receiving, moist

and wet deplthing, handling and transportation to and from

storage, pavement of the storage area, and handling and trans- f : portation to the digesters. Also included would be the fibre I i; losses in wet depithlng and storage, and bagasse preparation equipment up to the digester, and labour, power and maintenance

It costs for all machinery utilised.

L.2 Pl|çujston Ml Fuel replacement valu« is normally the largest single item i i affecting the coet of bagasse. In most areas where bagasse has i been diverted for other purposes fuel oil has been substituted.

This has been done to such an extent that a generally accepted

standard for equivalent fuel value has been developed in the rat LO

of 1 ton of oil • 3 tons OD bagaese and this relationship is

> i: considered quite accurate for estimating purposes.

Any type of combustible, of course, may be used to replace I the bagasse and at times even coal or wood have been utilized. These fumls, however, are only economical under very special

circumstances and consideration of their us« is complicated by

the fact that necessary boiler conversion is usually difficult

and exceedingly costly.

( !l

sfjmmi I R-193A/07/3101 - Page L/3 I •••CWWWTANTt Vtry competitive with oil and, in the province of Tubmen, i ; much more economical, 1« naturel gas. Thl« fuel it rarely i available in cene growing areas but Tucuman is most fortunate In the fact that the natural gas main from the Northern provinces li and Bolivia crosses the province vary near to the sugar producing region. Branch-malne, in fact, have been or are being constructed I! to past conveniently near to all operating ingenios. í In the past tha supply of gas has been severely limited but

u recent connection to the new main fro« Bolivia makes it feasible to contider this type of fuel. Assurances have been received

that even for tha large quantities required the gas will be

'! available by tha tima It Is required.

At the tin» of writing the price of oil In Tucuman Is «í deprestsd and dealers are willing to sell for tha best pries they M! can get. This, however, is considered to be a temporary condition which cannot perelst In tha face of rising International prices.

11: Considsrlng all aepects therefore, there Is little doubt that the Mí aost logical and economical fuel on which to base bagasse costs In this area la natural gas.

The duration of tha cana crushing season has also an i i! appreciable affect on tha cost of b ages se, particularly in Tucuman. Tha crushing season is rslstlvely short thus large

quantities of bagasse must be depithed and transported over a

short period necessitating mora and larger equipment than would i R-193A/07/31O1 - Page L/4 •> . COMMUTANTI

normally be required and inflated pover, operating, and maintenance

cost«. The length of the cane cruahing season also determine^ the

• izt of bagasse storage at the pulp mill and, indirectly, also rhe

extent of fibre loss in storage. Fibre losses in storage range

from 5% to 15% and even mora, depending on the type and length

of storage, but In general the longer the storage the greater arc-,

the losses. The additional capital expense attributable to the

short season are charged against the paper mill and do not appear

in the cost of bagasse.

Power coiti influence cost of bagasse mainly because the i depithlng machines consume, ss a rule, substantial quantities of pover, cost of which is then added to the cost of bagasse.

Labour costs usually do not constitute a very large portion

of the bagasse costs in a bulk bagasse system but in the bale

handling systems labour costs are usually very high.

Transportation distança plays a very important role in the

I I! cost of bagasse. If the distance la very small, up to about 800 m. , I« r ;! belt or pneumatic conveyors can be used. These conveyors have auch longer useful life (15 yesrs or longer) than trucks, require

little maintenance and supervision and can be designed for very l! high capacities. Increass in the transportation distance by only a few hundred «aters aakss conveyors impractical so thst trucks !! taust be used with substantial increase In costs per ton handled.

I ¡I m j

1.0

II 20 18

1.25 16 ~

renia • I I Jtetffar Mmrfr R-193A/07/3101 - Page L/5 I •Ml . C0NIMTANT1 I Bagasse can be handled, transported and stored in bulk c in bales. Baled bagasse Is considerably less bulky b^t •. 'x- I costs Involved In baling, storage, and bale handling equipment are substantial and unless transport over long distances is

Involved, the resulting total coats of bagasse may become :i prohibitively high for its use in pulp and paper. Bagasse it discharged from the crushing trains in bulk

and has to be fed ultimately into the digesters, also in bulk u form. Therefore, if bagasse is handled, transported and stored I I in bulk all the unnecessary work involved in baling and bale t. breaking may be eliminated with corresponding reduction in

costs. Since distanças are short in Tucuman, baling wou'J have

i no advantage and costs are based on bulk handling.

Means of transport selected such as conveyors, trucks, i li barges, r"lûmes, influença the cost of bagasse by their own I operating coats per ton of bagasse handled for the given distance. Conveyor and truck transportation have been assumed for cost

I ;! purposes. I Operating costs of primary dapi thing systems per ton of bagasse processed vary greatly with the systems selected.

I Unfortunately, a direct selection strictly on the basis of costs f ia not alwa.e possible because the quality of pith removal and !! efficiencies of clean fibre recovery also vary greatly. i li m 1

Mêmëlt Marter R-19JA/07/3101 - Page L/6 «fill . CONSUITANTI í Sugar milla that have experienced consistent bagass»-

s-rpluses will usaally lell bagasse without Incentive payments

because otherwise they must spend money to dispose of these

surpluses. In Tue aman however almost all sugar produced Is

fully refined so that all ot the fuel value of the bagasse

produced Is required and, In addition, auxiliary fuel is use.i, '\ Because of this, the sugar mills may request so-called "incentive"

payments, that Is, payments in excess of the iuel value plub u tosts, before they agree to sell their bagasse on long term contract?.

I I'i Such payments, if they are made, must be reasonably low

otherwise the cost of bagasse might become too high for pulp

and paper making. Since conversion to natural gas fuel will

Indirectly cause some benefits and savings to the Ingenlos I l! involved, e.g. over-compensâtion for fuel value of the baga&sr I il and more efficient and responsive boiler operation, allowance h for incentive payment has not been made, although it is convenient I ;! not to forget that it could be necessary to consider incentive I I payments when Che operation is confirmed. Table i-L shows the estimate costs of bagasse from various i i! sugar mills delivered to a paper mill located adjacent to Ingenio 1 t1 I Concepción. In this table, capital costs and the installât io is ¡t at the sugar mill (moist depithing, truck loading and conveyor

to the psptr mill as well as boiler conversion) are not included i il m 1

P-193A/07/J1O1 - Page L/7 II* COMMUTANTI

in the costs because they art already Included in the paper

mill costs. Transportation by trucks is assumed to be done

by contractors thua contractors' costs and profit have been

allowed for. I í Further detalla may be found In Appendix Sections as follows:

IX. 3 Power Consumed end Power Contract

IX.4 lagaeae laqulreaents and Coata ! IX.5 Fuel coat í I!

L I !! I f S i

!!

i ¡i 1

iU-J 2 9 T-318 2S»83iîlSilï

iî 4 5 -» « Ol M • »•- SÍ 38 * 3 •• Ï'

•" * * h «51 I « a sii;* î * î -i S u

-M. -SM; i: l\ ü í g s 8 I Ir • •JJ f •JJJJ I s Sas • 52*88 ' e s n sîIli • îii 1*

5- JS s ? 5888 1J 13 88889 1 ! S • ». » 1 ' I ! S u ft I 3 M r f 4 !! S * m j> * 1 1 3 8 *> 4 1 1 I I» I! S |S i i î ï I ta H !» i I M. -[r S ni ü'ííí** ¡I [ 8f4 i* »1 ¿!¡ § HIM !" v: *}* ïw < « g' l! ii |! BS I ! o .4 if !! ï JÎ3S ? e ï uï U « U 1! o 0 0 9 e s a e i 38 ft &&%? e e M «4 M M M ¡i I il 1

R-193A/07/3101 - Page M/l It « CONSMTAMTI

DESCRIPTION OF PROPOSED MILLS

M.l General

Drawings No, 19L6-301, 302 and 303 »how typical layouts for

the three aizea of papermili proposed. It would be possible to

construct and supply any of these mills in either the Northern or

the Southern part of Tucuman province, but for purposes of

discussion, it has been assumed that:

the location for any of the three alternative paper mills

would be adjacent to the largest mill in the northern zone

the total bagasse from this mill would be utilized before

drawing upon other ingenlos

- where bagasse required exceeds that produced by the adjacent

mill, the additional quantities would be drawn from other

Ingenios according to their size and proximity to the paper mill

site

transportation of bagasse to the paper mill would be by belt

conveyor from the adjacent ingenio and from other sugar mills

by semi-trailer

by 1979, the amount of bagasse available from any given ingenio

will have increased 30% over 1961-70 average.

- primary depithing installations would be at the sugar milla, i »I an installation being required for each ingenio involved in the

supply of bagaase R-193A/07/13OI - Page M/2 M. COMMUTANTS

M.2 Depithlng Installations at Sugar mil»

a) Mod«:. I

The bagasse produced by the principal Ingenio will be more

than adequate to supply the needs of the 166 TPD corrugating

•ill and, consequently, no truck transportation will be

necessary. For depithing at the sugar mill, the bagasse

would be taken from the existing boiler feed conveyor ahead

of the first boiler and transferred to a distributing

conveyor, it would be metered at the required rate into

individual deplthers by means of twin drum feeders. The

material In excess of the depithlng capacity would by-pass

the dcpitheri to overflow and pith return conveyors and be

returned to the existing boiler feed conveyor downstream

of the deplther take-off point. The pith and fines

rejected by the depithlng machines would be collected and

returned to bollert by means of the same overflow and pith

return conveyor arrangement.

The cleaned accepted bagasse would be collected by a

belt conveyor, weighed by a belt scale, elevated and

transferred onto the main conveyor to the paper mill. It is

estimated that only one operator and a part-time helper

would be required on each shift for this operation.

Arrangement would be made to have the sugar mill supervise I-193A/07/3101 - Page M/3 It. COMMUTANT*

and administer the moi at deplthing operation,

b) Modal II

Bagaata requirements for a 330 TPD llnarboard mill excaed

Che total quantity which will ba produced by the adjacent

Ingenio, thua eoa* additional bagaaae (about 56,400 tona

O.D. ) will have to be tranaported by road fron two other

augar ailla. The deplthing installation at the main ingenio

would be alallar to that described for the corrugating mill,

but bagaaae overflow and pith return would be by »eparate

conveyors ao that only the pith would go to the boilers.

The overflow bagaaae would either be re-cycled Immediately

or, If necessary, would be stored un.. 11 an interruption

In cane cruahlng would peralt it to be fed back into the

dcplthlng syatea. Such an arrangement will anaure maximum

utilisation of the least expensive and moat readily

available bagaaae.

The deplthing equipment at the other lngenioa would differ

not only in alee, but also in the incorporation of truck

loading bina. The much amellar quanti tica of bagasse to be

handled would also make it practical to utilise pneumatic

conveyora for tranaportatlon of the whole bagaaae to moi*t

deplthing and from deplthing to the loading bina. Pneumatic

conveyora because of superior flexibility, would permit

location of the truck loading bins immediately adjacent to the R-193A/07/31O1 - Pige H/4 •••COMMUTANTI

dcplthlng sechine «o that only the minimum of operating I labour would be neceisary. I The accumulation of deplthed bagasse in loading Ì hoppers will reduce loading of trailers to a matter of

I minutes, and permit optimum cycling of the transportation

equipment. In addition, settling of the bagasse, even in very

temporary storage in the hoppers, combined with the further

compaction caused by the method of loading the trailers will ! reduce volume to some extent so that somewhat larger tonnages i ¡i can be loaded per unit volume of the transport vehicles. i i c) Model III Bagasse requirement of this large mill can be satisfied I only by taking all the bagasse available from Ingenlos:

Concepción, San Juan, Cruz Alta, and San Pablo, augmented by the

remaining quantity from Ing. La Florida.

The handling and dcplthlng installed at Ing. Concepción,

San Juan and Cruz Alta would be as described for the linerboard

mill (Model II). The moist dcplthlng Installation at Ingenio

San Pablo would be similar to that at Concepción with the

exception that facilities for truck loading would be provided.

Because the total bagasse available will have to be taken from

thase sugar mills, all bagassa would be taken off the existing

bpl 1er food conveyor and fed into the depithera. Overflow I R-193A/07/3101 - Page M/5 »il • • COMMUTANTI conveyors would be provided to take bagasse In excess of the

depithlng capacity to temporary storage In a surge pile for

future depithlng. After depithlng, as for linerboard mill, I the accepted bagasse would be accumulated In loading bins for ¡i. rapid truck loading. Two bins, each of capacity equal to that of one bagasse trailer, would be provided to ensure optimum I flaxibillty. !í Mi Equipment at Ingenio La Florida would be similar to that a installed at Cruz Alta, but the overflow return for excess

bagasse would not be necessary because only about 507. of the i ¡ available bagasse would require depithlng. I M.3 Depithlng Installations at Paper Mill Mi a) Model I The bagasse delivered by belt conveyor from Ingenio

Concepción would be fed directly into the bagasse washing

system consisting of a hydrapulper, a washing chest, sand and

"Junk" removal conveyors and a water re-cycling system.

From the washing system bagasse will be sluiced onto a drainer

( typ« elevating conveyor with three discharge points. The

flrat two discharge openings would be equipped with metering

feeders, while the last one would be permanently open in order

to permit transfer of excess bagasse to a surge pile. The first

feeder would deposit bagasse onto the digester feed conveyor for I R-193A/07/3101 - Page M/6 I •••COMMUTANT« '¡; lunediate processing and the second feeder would meter the bagaaae into a preservative mixer discharging into truck 1 loading conveyor system for subsequent transportation to the

l ' main storage, where it would be piled up to 15 m high by means

of front-end loaders. The bagasse-preservant mixer would

operate only on fresh bagasse from the sugar mill. When no I fresh bagasse is being delivered, the feeder to the mixer would be stopped so that the bagasse on the drainer-elevating conveyor ' if in exceas of that required at the digester would be transferred >!¡ to the aurge pile. [ ! Proa the main storage pile, bagasr.e would be reclaimed by a nobile crane equipped with an "orange peel" type grab and '¡i high reach front end loader, loaded onto dump trucks, Hl transported to a well drained surge pile or intermediate storage area, dumped there and fed onto a reclaim conveyor as and when M: required. Front-end loaders would be used to tranafer bagasse froa the surge or intermediate storage pile directly onto the

reclaim conveyor from which It would be transferred to the i ! drainer-elevating conveyor deacribed above. > l! Sugar mills usually shut down one to two days every 7 to 14 days during the crushing season for evaporator Î clean-out cauaing intermittent Interruptions in production of Ml bagaaae. > !l R-193A/O7/3101 •• Page M/7 M. COMMUTANT*

The paper will, however, must operate continuously. During

the sugar mill ahut-downs, bagaaae would be reclaimed

either from the surge or Intermediate storage pile or from

the main storage piles.

In order to reduce re-hand ling of bagasse during the

sugar mill shut-downs sufficient washed bagasse would be

accumulated in the surge pile to provide uninterrupted supply

to the paper mill without having to reclaim from the main

storage piles.

b) Modal II

The wet depithing, storage and handling installation

would be similar to that described for Model I, but wet

depithers and wet pith handling system would be added and

the capacities of the washing, handling and atorage systems

would be lncreaaed because of the larger production.

Operation of this installation will be very similar to that

described for Model I with the exception that during the

crushing season about 361 of bacasse will be delivered by

trucks, dumped alongaide the bagasse receiving conveyor and

fed into the bagasse washing ayatem and wet depithers

simultaneously with bagasse delivered by the belt conveyor

from Ingenio Concepción.

c) Model III

The wet depithing, storage and handling system for this ^1 I *rl93A/07/3101 - Page M/8 tAMTf

496 TPD «111 would be Identical in design to that described

for the 330 TTD linar board »ill with the exception that the il capacities would be increased and about 531 of bagasse would i be delivered by truck«. i TWo digesters would be required thus provision of two M receiving conveyors and metering feeders would be necessary.

1.4 Sequence of Operation

Basically the processes for the proposed plants are as ! shown on flow sheet 39F6-201/1 for Model I, on 39P6-202/1 for i! Model II and on 39F6-203/1 for Model III. The operation of the plant 11 is described hereunder. «) Model I

Moist depithed and washed bagasse Is fed to a wilting II! screw conveyor where black liquor is added. The bagasse then drops from the wilting screw to the presteaaer and then ill into the rotary feeder of a continuous digester. The type of continuous digester preferred is the double tube horliontal

digester because retention tines stay be varied over a i a considerable range.

Cooking liquor is delivered to the mill as sodium

hydroxide at a 301 concentration, then diluted at the mill

to the required strength and added to the continuous

digester immediately after the rotary feeder. The digester ill is operated at pressures of 7 to 7,5 atmospheres by direct I- 1 93A/07/3101 - Page M/9 M.comwTAim

• training. Retention tlmea are in the order of 10 to 20 1Ij Minute« to reduce the fibroin material to a suitable pulp. 11 i After paaaing through the continuous digester, the pulp is discharged under pressure through a pressurized fiberizlng

li refiner to a blow tank fron which It IJ pumped to a washer

in which the cooking liquor is separated troni the fiber.

A portion of the waste liquor is reused for the preparation

of cooking liquor and in the wilting operation as well as

for wet deplthlng. The balance of the waste liquor U

sewered. Prom the pulp washers the pulp is discharged at

i¡ high consistency and pu«pad to storage in a high density

tower. From here the bagasse pulp is diluted and pumped to '¡i the bagasse pulp chest from which It Is fed at regulated consistency to a battery of disk refiners, where the pulp

is subjected to additional fibcrlsatlon. From the refiners

the pulp goes to the refined bagasse pulp chest where it Is 'ti stored under controlled consistency and agitated to prevent

flocculatlon and to ensure uniformity of the fibre and

water mixture.

The wast« papar, which la the other fibrous component of

the corrugating medium, is pulpad In a conventional batch

pulpar after which It la screened, thickened, refined and !! MI atorad in a lew density refined storage chest. R-193A/C7/3101 • °«ge M/10 Il • COMMATAMT*

Br*e from the wet end of the paper michin* (wet broke)

Il collected In the couch pit, diluted, then passed over a

ssve-ell to bring it to the required consistency after which

it is »tored in the refined was'e end broke stock chest.

Wet broke under normal operating condition» is produced at

a uniform rate, but may present problems in starting up if

passing of the sheet to the dryer section takes excessive

time. Broke from the dry end of the paper machine (dry broke)

is transported to the waste paper batch pulper where it passes

through the same system as waate paper. Dry broke will be

produced at a variable rate during thr-ading operations and

dry enu breaka. The winder trim, together with cut-up

unacceptable rolls of paper, are collected into the dry broke

pulper and then paas to the waate paper system.

From the refined stock cheats, the waste paper pulp,

which would normally also contain anali proportions of

paper mill broke, and bagaaae pulp are pumped to a proportioner

where the dealred ratios of bagasse and waste paper pulp are

metered, mixed, and controlled. »esin size and alum are added

at this point to give fibre set, water impermeability, and for

pH control. The pulp mixture (furnish) Is pumped through a

battery of conical brushing refiners and, after further dilution

paaaea through the machine screens to the headbox of the paper

machine. R-193A/07/3101 - Page M/ll II. COMMUTANTI

The paper machin* Is a standard fourdrinler machine ai I described In datall In Tabic 2-J. The board la fornad on the wat and of the paper machine, dried in the dryer section

and wound Into rolls on the reel. The reals of paper (or

! board) are silt and trlaawd to desired widths on the machine

alltter-winder and after being strapped and weighed the rolls

! from the winder are transferred to roll storage to await t shipment. Ideally acheduling of production should avoid ¡! atoraga but thla la not always poaslble. I. I After the winder the rolla of papar are Inspected and I i may either be rewound or cut up for recycling depending on whether it is the quality of the winding or the quality of Mi the paper which ia at fault. Rewound rolls are eventually li! Included with other paper ready for ahipment. The operation of stock preparation and the paper machine 11; ia controlled by centralised Instrumentation système located strategically, permitting observation and control of the

operating variables from panel group indicators, recorders

and controllerà, including remota puah-button stationa for

all motors.

Satisfactory working conditiona for the peraonnel are

ensured by proper ventilation of the paper machine room

through adequate machina hood exhaust and room fresh air supply I !l systems. R-193A/07/31O1 - Page M/12 I. COMMUANTS

In addition to the main production facilities described

above, the mill would have complete »team generating facilities,

electrical power distribution systen^water supply and wate»

ireetment system, fire protection facilities, shops and stores

for maintenance and repairs, first aid station, cafeteria, and

•ill offlcea for management, accounting, engineering,

purchasing and sales.

Inasmuch as the corrugating medium mill is not planned to

have a chemical recovery system, the effluent from the mill

would have a higher pollution load than the other two

alternative mills. Effluent treatment would consist,

principally of primary clarification to reduce the pollution

load of discharged water to acceptable lévela.

Nkter from the effluent plant would be re-cycled as

much as possible thereby reducing the amount of fresh water

used. For reduction of B.O.D. (Biological Oxygen Demand)

the clear, excess effluent would be aerated by means of a

•eries ct channels and weirs before it enters the existing

water-table or water way system. Solid water from the

clarifiera would be dumped on waate land away from habitation,

b) Model II

The process for the proposed plant is as shown on

flowsheet 39F6-202/1. The operation of the plant would be

ss described hereunder. R-193A/07/31O1 - Page M/13 Il «COMMUTANTI

Mashed and wet deplthed bagasse t» fed to a wilting

•crew conveyor, where black liquor It added. Th« bagasse Ig ¡I then dropa from the wilting acrew to the presteamer and then into the rotary feeder of a continuous digester. A

!¡ continuous horizontal digester of the tube and acrew type

is preferred because retention tine may be varied over a

considerable range.

Cooking liquor, prepared by caustlclilng sodium carbonate I ! with burnt Haw, is added to Cha continuous digester ï le«» di a tel y after the rotary feeder. The digester la operated 11 at pressures of 7 to 7.5 s ten) spheres by direct stealing, attention tlaea required are In the order of 15 to 20 minutes, '¡i to process the fibrous material into pulp of suitable M! characteristics after passing through s pressurized flberising refiner to a blow tank.

Proa the blow tank the pulp is pumped to Jonsson screens,

and then flows to the washers In which it is washed free from

cooking liquor. A portion of the liquor Is re-used for the

!» preparation of cooking liquor*aend Í»- the wilting operation.--

The balance of the liquor Is sent to the recovery plant.

Prom the pulp washers, the pulp Is discharged at high

consistency and pumped to a high density storage, the

principal purpose of which is to compensate for aurges or i !l I R- 19^/07/3101 - Page M/14 • i If • COMMA? AM?« I ü fluctuations between the pulp mill production and paper machine demand. Pulp from the high denalty storage tower is dilated

I and pumped to the bagasse pulp cheat.

Ijnported unbleached kraft, the second fibrous component

of linerboard, is pulped in a conventional batch pulper and

Chan pupped to a storage chest.

The papar machine will produce wet broke from the wire

trim and from the press section at a more or less constant it i rata during normal operation and at a variable rate during i ¡i threading procedures and wet end breaks. This material will be collected In the couch pit.

Dry broke will be produced at a variable rate during 'ii threading operations and dry end breaks. The winder trim IÜ together with dry broke will be collected In a dry broke pulper. n; Met and dry broke are returned to the paper Bachine lu circuit through the broke handling and proportioning system and are puaped to the broke atorage cheat.

"Whin producing linèrboatd, *bagatse't»rlpr importeù-paìp, I! and broke are refined aeparately in a battery of pressurized diak refiners and go to their reapectlve refined stock chests

! where the conalatency ia constantly controlled and the stock ,1 la adequately agitated to prevent flocculation and to ensure R-1O3A/07/31O1 - Page M/15 ». comwTim

uniformity. From the refined stock chests the three type*

of pulp «re pumped to a proportioner where the relative ratios

of bagaaae pulp, imported kraft pulp, and broke pulp are metered

and controlled. The pulp mixture flows into the primary machine i! cheat. Prom the primary machine cheat the pulp it pumped 'A through conical refiners and screens through a basis weight valve

and into Che primary headbox fan pump circuit.

Fortlona of the bagaaae pulp, and the Imported kraft f U pulp (without broke) are pumped to a secondary proportioner

and thence to a secondary machine cheat. Thla furnish forms

1 the aupply for the top liner. From the secondary machine

11 chest, where roaln size and alum have been added, the pulp 'Ü la pumped through conical refiners and screena to the paper machine aecondary headbox.

Hare again, the paper machine la a atandard fourdrinier iti machine which is discuaaed In detail in Table 2-J. The board 1 ia formed on the wet end of the paper machine, dried in the f dr«er aectlon and wound into rolls on the reel. The reels of «paper or board are »lit and- trimmed to the \JfsiT*d -width

on the machine slitter winder and then weighed on a platform

acal« and transferred to roll storage for shipment as required.

!! Defective rolla aro either temporarily stored and later

rewound, or cut up and returned to the dry broke system. The i !l rolla from the rewinder are then weighed, strapped, and sent R-193A/07/3101 - Pate M/16 I. COMMIT AMT!

to storage for shipment.

The operation of atock preparation and the paper machine

iE (I la controlled by centralized Instrumentation systems lu.itfd strategically, permitting observation and control of th# i operating variable! from panel grouped indicatori, recorders and controllerà, including remote push-button stations for all

motors. 'i Satisfactory working conditions for the personnel are •naured by proper ventilation of the paper machine room through

adequate machine hood exhauat and room freah air supply systems. I K The chemical recovery system is relatively simple. The

n weak black liquor from the washers flows into filtrate tanks "¡i from which It Is then pumped to a black liquor filler where any entrained fibres are removed. The filtered black liquor

ií! then goea to the weak black liquor storage tank. From I I I thla storage it la pumped to multiple effect evaporatore where It la concentrated to approximately 30X. The evaporated black I liquor la atored in a thick black liquor atorage tank, from 1 which la la fed to a fluidlzed bed reactor for burning. During oxidation, the volatile organic matter, which jl consista of complex compounds of soda and organic non- celluloee portions of the bagasse, Is converted to harmleee

gasea and water vapour which paaa through a cyclone and scrubber

system and emerge as innocuous gases, devoid of the original 1l!l R-193A/07/3101 - Pag* M/17 TANK

pollutlve character of tlie watte affluant of which It waa a

part.

The raaldual Inorganic chemicals, previously axlatlng In

varloua atagaa of complexity In coaiblnatlon with Inorganic

and organic prccaaa waataa, arc oxldliad and converted to a

atabla atata and depositad In the fluldlird bed aa pelleted

or agglomerated granulaa. Theae pelleta or granules of real dual

Inorganic chaailcal fona the matter of the oxidized bed and,

ë» the chemical a accumulate, a portion la continually discharged

aa a »olid, granular product. Theae chemicals are recovered aa

sodium carbonata which la dissolved In a tank ualng weak

liquor from the recaustlclilng system to form green liquor.

Hake-up sodium carbonate la added to the dissolving tank.

The green liquor la pumped to a conventional

recauetlcliinq ayaten where, by treatment with lime, the aodlum

carbonata in the green liquor la converted to sodium hydroxide.

The white liquor thua formed la then ready to be uaed for

cooking.

The Haw mud formed in the recaustlcizlng procesa is washed,

filtered and then burned in a lie» kiln to produce freah Ham.

Make-up lima atone would be added aa required and burned to-

gether with the lime mud.

In addition to the main production facllltlea daacribed

above, the mill would have complete ateam generating facllltlea, K-193A/O7/3101 - Page M/18

M • COMMUTANT*

electrical power distribution system, water supply and water

treatment system, fire protection facilities, shops and scores

for maintenance and repairs, laboratories for testing and control

locker rooms, wash rooms, first aid station, cafeteria, and i mill offices for management, accounting, engineering, purchasing and sales.

The effluent from the mill would not be very difficult

to treat since the fluid bed reactor and recausticiiing area ¡U will remove most of the contaminants. The effluent will,

however, contala SOM biological oxygen demand (B.O.D. ) and

i! some auapended solida which will consist of fine solida removed

from the pulp and some chemical which is washed out of the paper

during manufacture.

The beat treatment for effluent under these conditions

would be by means of primary clarifiera from which the sludge i» would b« gathered and diapoeed of on waste land away from habitation. As much water aa poaalble from the effluent plant

would be; re-cycled thereby reducing the amount of fresh water

»i! used. For further B.O.D. reduction, the clear, exceaa effluent water would be aerated In a scrlea of channels and

weira before it la returned to the exlating water-table or

water-way ay stem,

c) Model III in The procesa for the propoeed plant la as shown on I R-19ÌA/07/3101 - Page M/19 I It. COMMUTANTI

flowsheet J9F6-20Ì/1. The proposed plant would luve two 11 pulping lines, one ior production of HO T/D Unt-rboard. as I described previously under M.4 (b) - Model II, and one for

production of 166 T/D corrugating medium, as de otri bed under

'li a.k (a) wich the except low that through minor additions to 1 II' the recovery system the chemicals used in production of I corrugating grade pulp nay also be economically recovered. In addition to the main production facilities described

above, the mill would have complete steam generating facilities, ni electrical power distribution system, water supply and water treatment, fire protection facilities, shops and stores for

maintenance and repairs, laboratories for testing and control, I "¡i locker rocas, wash rooms, first aid station, cafeteria, and mill offlcea fcr management, accounting, engineering, purchasing

and salta. Mi The effluent treatment system would be a larger model Fl of the already described In section M.4 (b) - Model II. Ei

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I MACHINf TMMMED ROLL TRIMMED ROLL IT IMO STOMA«! STO* AM •a. J't „„«M ItTI 1 1 i£ ! I l -i—i—t—*—I—i- (Y (NO -f—t—i—i—(- -i—i—t—i—t- iwkv»1 ' ' V -* /ft» UWOO CONTRACT 193-A 71/SS 39F6-203/I

'•'« - ^rmmsSESHn*»* **«•*•*•** H ') iA r,> /J. j. Pig« N/'l Il. COMMUTANT*

I ! N. CAPITAI COSTS N. 1 Gcnrr*.

The ettlma'eJ ;c»t of corstractlon of »nv p-ip and p*p«r mhi

may b« divided ìn'o a rllB,b»r ot component« suc* a« t»-t DUíLí

Il Flint Cost, the Indirect fiant Coat, Development Coat and the

:¡ Working Capita!. Tr«•• ire described in d*ta11 1^ the following I I •ce ti ont, (•) Direct Flint Coat

I u The Direct Plart :o*t cf al 11 site, equipment, buildings I and civil work«, completely erected and with the plant ready to run, The equipment Includes all machinery and materiale,

I H other than building! and foundation« as w* 1 . at freight and I ¡i handling charges required to deliver the equipment to the I alte. Bullding« and civil work« Include all building*, I I! constiu;ttcn and foundation«, anchor bolt«, building floor and !» roof drain«, roads, tewera, grading and fencing. ;! The cost of land for each Bill alte la the estimated price

of the area required for tha plant under consideration. The

assumption haa be«n made that only the necessary area would

l! be purchased Initially but. obviously, for the saalltr mills li It would be wise to ensure that rooa for later expansion wculd be available.

tqulpaant costs are basad on preliminary quotations received E li R- -•OA/0W3.01 Pag« N/2 • cwnwTAim

fro» •*m.fi.'.ir»r» 1 t>r aa|or item« of aqitpment anj on data

i ! from quotation« for «imitar project» t^et Kiv» t>»*n pnglneere'l

recently by Stadler Huittr. It ha« been a*«um*d fat at,

• quipawnt will be new equipment primarily marufactired in

North America. Certain items which are known to be available

In Argentina have been attaaed 'o be purchased there

Freight and handling charge« 1 nel-de all chargea for

freight to destination, insurance and special charges for I handling. The costa will vary depending on the supplier's location, but have been baaed on ehlpaent fro« Montreal to

Buenos Aires as a foreign exchange expense and delivery to

•It« as a local expense. It s>ay be possible to ship fro*

Montreal In Argentine vessels but no guarantee of

availability can be made at this tlaM.

Building costa and the cost of civil works are based on

unit costs for stallar construction in Argentina.

Installation labour costs are based on direct estimates

of the labour involved using Canadian experience and data

on similar construction. Estimates made on this basis nave

proven in practice to be quite accurate.

As the mill will be far fron the) manufacturare rf the

machinery and equipment, a special allowance for the salaries

amo living expeneea of erectors and personnel engaged to stsitt

in the erection and start-up of thla machinery has been provided. i !l 1

R-193A/07/3101 - Psge N/3 TAUT»

The dir«ct plant cost docs not Include any Inventory

Items.

As the estlmatea of Direct Capital Coat have been

prepared without extensive design work, a contingency

allowance of 101 has been provided. The additional funds

thus Included will cover unforeseen or unforeseeable costs

which may reveal themselves during the design or construction

stages of the proposed projects.

(b) Indirect Plant Costs

The Indirect Plant Costs are the Items described in

the following paragraphs.

(I) Fragrojact Expanses

To initiate any project there are engineering, legal,

financial and administrative costs, and expanses for the

preparation of feasibility studies, loan applications and

the Ilk« before the final decision Is taken whether to

go ahead with the project or not. The preproject expenses

depend on the site and complexity of the project. For

the projects under study it is estimated that these costs

could be II to 1-1/21 of Direct Capital Costs.

(II) Frica Escalation

During the construction of the mill there are slight

lncreaaes in the cost of equipment and labour which have

I to be added to the Direct Fiant Coat. Major Increases may 1

Rrl93A/07/3i01 - P«g« N/4 ITANTS

also occur duc co the lapse of tine between when the

catlaate la made and when the project la Implemented. Due

to the combination of Argentine and foreign coati which

la Involved and the unaattltd ttate of Argentine economy,

It la difficult even to approximate what escalation

might amount to. At the time of implementation all prices

and costa will, no doubt, require complete review, but in

order to recognise the existing inflationary trend the

potential magnitude of price Increase haa been estimated

and Included at 71.

(Ill) Purchasing and expediting

The coat of purchasing and expediting Includes the

expense Involved In purchasing the equipment and ensuring

that It la delivered on site o„ ^edule. Normally this

Item would vary with the alsa of the project and would

•mount to about IX of Direct Capital Coata.

(lv) Construction Overhead

The allowance for construction overhead provides for

such ltema as construction management, warehousing of

equipment on site, accounting, construction equipment

rental or depreciation, facilities required -»t fhe site

such aa temporary structures, Job cleanup, mlacellaneoua

Job services and contractor's profit, plus the coat of

administration, client'« engineering supervision, and R-193A/07/3101 - Pag* N/^ TANTI

overhead during th* construction period. Estimated

allowance about L'i» 31 of Direct Costa.

(») Ta.net and Duties

In most instinces when pulp and paper mills are

built the new industry Is subject to both federal and í atate or provincial sales and other taxes anù duties. It I Is our understating that there will be no charges applicable In this instance due to the application of the

law which provides for custoas exemption In the case

of new Industry.

(vi) teal»-rim

For alila constructed In Morth ««erica it has been

custoaary for manufacturing enterprises to employ consulting

engineers for the specific purpose of designing the project

and supervising its construction. This practice is not

usual in Europe, where the coat of engineering is often

Included In th« coat of machinery. However, engineering

has to be paid for, whether It la shown as a separate

Item aa In thla study or whether It is hidden in the cost

of machinery.

For the preparation of this eatlmate it has boon

tusad that the process, aechanlcal, and th« major part

of th« electrical engineering would be dona by foreign

specialista and that civil and structural dealgn would be E il R-193A/07/3101 - Page N/6 •••COMMRTAMn

handled uy Argentine engineers. It has also been assumed

that equipment Installation In particular, and the overall I aupervIsIon of construction would be carried out largely i by foreign personnel, experienced in pulp and paper. I The coat of this work would vary between 6.5 and 7.51, being somewhat higher for the smaller projects. I (vii) Interest During Construction and Start-up !l in the determination of Interest curing construction, II for simplicity it has been assumed that the average construction period for any of the mills would be 33

months and the start-up period a further 3 months, with I I the equipment being purchased and capital being drawn down over the period as required. On this basis, lntereat «Ì during construction has been calculated In accordance with i I! •tandard loan terms of the Inter-American Development Bank (Banco Interamericano da Desarrollo) (UD) snd Export i I I Development Corporation (IDC - Canada) for both of which i !i the loan periods and Interest rates are essentially the same. Interest has been assumed at 81 on capital costs

as expanded.

(c) Diva lorn—at Costs

This item, although treated separately hare, is usually

Included among the items of Indirect Capital Cost.

Development Costs are costs involved in stsrtlng up a mill [ !l • I»1»JA/07/3101 - Pap "/7 umn

which cannot properly be charged to production. That* expansca

conalat of tha following lteaa:

(1.) Traini»»

Thla heaalng lncludea two lteaa;

- The coac of expatriate aaalatanc* required to auparvlae ¡iI the alll(t) in the initial yeara and to train ¡i i Argentine! for eventual performance of aanageaent function! (See Tablea l-C and 2-G) í - The expendlturea »ade to hire and train a nucleus of II operating ataff for the mill prior to the beginning of the atart-up period. ru (li) «art-up Inevitably during the atart-up of any paper ai 11

there ia a period of very poor operation before a

aaleable product can be produced. The coata of labour, 1 !! •ateríala and eervlcea conauaad unproductive!y la

• i¡ uaually taken Into Indirect Capital Coata. Although i !i a period of three aontha hat been allowed for the atart-up, It aay reatoaably be expected that the total

lesa durlag thla phaee would approximate tha coata of

full aonth of operation at rated production Including i I! •ii variable and fixed coata. Tall aae•wnt haa tha rtfore ;i been ahown aa tha coat of atartlng «».

A aaaagaaant contract hat been dlacuaaed and t !l 1

R-19ÌA/07/1101 - Page N/8 r«m

recoomnded in sub-aectlon G.6. The intimated cost

of such a contract would vary fron 1.5 to 3. 5X of

Direct Capital Coat being approx. Inversely proportional

to the «111 tit«.

(d) Working Capital

Thar« la soaetiaes a question aa to whether thla

requirement, which can be rather larga, should be Included as

an Indirect Cost or should be shown as a separata Item.

Hwavor, alnca It foras an appreciable part of Capital which

swat b« provldad and therefore aust be shown, It Is here

Included with Indirect Coats. The aajor aspects for which

working capital ia required are:

(i) Cash and Stores

Cash includes the) suns required at all times by the

•ill to cover payrolls and othar axpenses fron the start

of construction and thereafter.

Itoraa includa the stocks of bagassa, encalcáis and

other coneuaable lteaa which aust be aalntalned at the mill

to be available aa and whan required. Spare parta are

not a storea ltea In this aenae, aa they must be Included

with the al 11 equlpaant ao that they aay be depreciated.

(11) Inventory

It la expected that in a aiil of this nature an

average stock of finished pulp and paper will have to be

aalntalned equal to one aonth'a production at the R-193A/07/3101 - P«g* N/9

applicable production rate to be able to ship cuatoroere'

> ! ordere promptly and alao to allow fairly long run» of

each product. The value of thia item is equal to one iE il month'a production coat. li (ill) tacelvablea In Argentina average terrae of paymenta would be

90 daye, thua capital equivalent to three montha production

coata Buat be kept In re»erve to cover the period between Iu ahipmcnt and payment. M.2 Coat Katlaute»

The total of all of the above itema repreaenta the "Plant

Capital Coata". Table» 1-N, 2-N, and 3-N «how eatlmated Direct

Capital Coata, and Table 4-N ahowa the correapondlng Indirect ¡i Capital Coata for the three altea of mill which are being conaldered. Summarltlng Tablea i-N, 2-N, 3-N and 4-N therefore, total !! capital requirewenta for each of the three alternativa milla are

i¡ eatlmated aa followa.

Model I Modal II Model III ¡i u$a Direct Capital Coata 24,000,000 41,500,000 60,300,000 Indirect Capital Coata 10.450.000 17.200,000 23.100,000

Sub-total 34,450,000 58,700,000 83,400,000 Working Capital 2,360,000 6,360,000 8,400,000 Total Capital »»quired 36,810,000 65,060,000 91,800,000 M! Peaoe Ley 18188 184,050,000 325,300,000 459,000,000 M.3 Foreltn Exchange Requirementa i li The ratio of national to foreign capital required would be R-193A/07/5101 - Pag« N/10

II • COMMUTANTI

...antially identical for each of the three «ilia.

Taking into account that .11 labour and all coita iitlMtid

in tar« 22 to 28 would ba Argantlna, and allowing reall.tlc

proportion, of othar «at.rl.1 coat e.tlaate. according to

«•nufacturlng faciliti., exl.tlng in Argantlna, It la aetUated

that dlract capital would ba avanly dlvldad - 501 Argantlna

and 501 foralgn.

txaalnatlon of Indirect Capital Coat. .how. a ai«tlar

ralatlon.hlp thu. foralgn axchanga In aach caaa would a«ount to

about 1/2 of total capital requirad.

In computing tha foralgn exchange req4lre«ent it haa baan

con.idar.d that papar «achinae would ba purchaaad fro- a foralgn

•uppllar. Papar «china «anufacturlng facllltla. howavar do

exlat in Arftntina - co-plate papar »achina, cannot ba «ade but,

particularly for th« e-aller machina, a aub.t.ntial parent... of

tha «achinary could ba auppliad by Argentine fin... A larga and wall

known foralgn papar «achinary «anufacturar haa .tatad that appro«.

601 of tha .«aliar «achina could ba «ada in Argantlna and 30% of

tha largar oaa (undar licanaa).

If it la conaidarad that papar »«chinée would ba purchaaad

•a «uch «a poaaibU in Argentina tha foreign exchange require«ent

would ba raducad to ao»awh«t laaa tha« 501 particularly for tha

corrugating «adita «ill whara It could bacoa« 40-45X. 1-193A/07/3101 - Pag« H/il

The possibilities of purchasing the paper machin«! under such

arrangement would require thorough lnvtstlgatlon In a detailed

feasibility study. The attraction of foreign exchange savings would

have to be carefully considered In the light of delivery tine and 1 .Il total cost compared with other machines of completely foreign l M manufacture. The possible problems which might arise would have to be assessed and Judgement made accordingly.

M.4 Time Schedule 1'.!'I Io accordance with present day delivery timas for major M equipment and the part experience of the consultant, It is estimated

that engineering and construction would take between 2-1/2 and 3 1 il year« from Initiation of the work until start-up. Por simplicity It has bean assumed that a period of 2-3/4 years would be required »Ì for any of the three alternatives. The calculations of Working i ¡1 Capital and other pertinent ltoMs of Indirect Cost have been mad« >* on this basis.

M! A production schedule has also been assumed allowing a

start-up period of 3 months at the and of which production at 501

1 of rated capacity would be anticipated. Costs of start-up have been

Included as Indirect Capital Expense. During the first year of

production it la estimated that production will progress from 501

to 901 of rated and would reach full production by the end of the

eecomd year.

Scheduling during the construction, start-up and initial

production phaaes la shown graphically In rig. I-M. •crtMMca •«••i MMMB« . eOMMlTANH UWIDO i; It«

July 20, 1972 1-193A : 07 A 3101 lìe« • I TABLE NN N/12 i » COST HODEL I lì il SUMKAIY DT DI UCT CAPITAL UQUIUMIHTS il It< Labour Matarial Total Ir i Baga ut Daplthing 41,400 345,800 387,200 i! 2 Bagattt Handling & Storag« 60,100 401,900 462,000 -i 3 Digtstar and Pulp Waahlng 88,300 738,300 826,600

'li 4 Scraanlng and In fining 32,700 251,700 284,400 I 5 Stock Prap. & Papar Machio« 700,000 4,677,800 5,377,800 I 6 Plnlah, Stor* & Ship 9,100 129,500 138,600 7 Maat ft Chtalcal lacovary

I 8 Iluctrlcal (Mill) 410,300 2,729,600 3,139,900

9 Matar Supply ft Iffluánt Treat 34,400 313,200 347,600

•„ 10 Mobila Iqulpawnt - 407,500 407,500 ni 11 Pira ProtactIon 11,200 88,300 99,500 12 Haatlng ft Vantilatlon 14,700 114,000 î.28,700 I Hti 13 Laboratory ft Taat Statlona 7,800 113,600 121,400

I i 14 Mill Shopa and Storca 21,900 371,100 393,000

15 Offlcaa, Pirat Aid, ate. 6,400 124,300 130,900 Üa » Ï is t 16 Chaalcal Handling and Prap. 8,600 97,200 105,800 r i: 17 Tranaport ft Co— unicatloa 2,400 31,800 34,200 lì 18 Staaa Plant 4 Syataa 193,700 1,935,200 2,128,900 19 Mlac. ft Spar« Parta - 1,436,300 1,436,300 il 20 Pralght ft Handling • 1,030,000 1,050,000 l ••runici • MM! MANTI uta DO MO MO.

July 20, 1972 TABLI l-N (Cont'd) N/13

Item Labour Material Total I 21 tractors Peaa & Living Expense« 300,000 300,000 22 Bollar Convarslona 150,000 150,000 I 23 Mill Bldgi. (M Othar Structuraa 2,693,500 2,693,500 24 Land Purchase & Sica Prep(20 Ha) 500,000 500,000 Û n 25 loads & tory Sidings 750,000 750,000 i« 26 Bagasaa storage pad 290,000 290,000

» • 3; 27 Gas supply to siili & Ingenios 50,000 50,000 n •i 28 Power supply to Mill 120,000 120,000 it 29 Duty .

Total 1,643,000 20,210,800 21,853,800 * - 30 Contingency 157.000 1,989.200 2,146.200 li TOTAL DIUCT PLAITT COST DIS 1,800,000 22,200,000 24,000,000 i; » « $a 9,000,000 111,000,000 120,000,000 í! f: ?; Note: Iteas 22 to 28 would b* fully contracted and are local ; • expense thus labour figures not estimated.

It f i: jl i i [ li ti

::

• ! i 9tméMm* JTartor •IMMNCI I IBM I M «111. »! MMtum UNIDO Í MO. MO. HO . j_ iî o»»t i - -4 H ": ! ti Jul/ 20, 1972 I-193A 07 3101 2-N S» TABLE N/14 ï » lì COST MOD«. II ; i il SUMMARY OP DI «CT CAPITAL UQUIâWNTS II Item Labour Material Total ir 1 EU gasa« Depi thing 65,000 541,500 606,500 il 2 Bagaaae Handling & Storage 91,600 612,100 703,700

u 3 Dig«»ter i, Pulp Maahlng 130,100 1,003,700 1,133,800 Sì li k Screening & Refining »Í 105,100 873,300 978,400 ï! ; I 5 Stock Prep. & Paper Ha chine 820,800 6,800,800 7,621,600 Sì « « M 6 Finiah, Store & Ship 18,500 263,500 282,000 it 7 Heat & Chemical Recovery 300,000 2,700,000 3,000,000

8 Electrical falli) 570,400 4,399,800 4,970,200

•t 9 Water Supply & Effluent Treat 83,700 831,300 915,000 !? 10 Mobile Equlpafc.it - 679,200 679,200

li 11 Fire Protection 18,400 147,400 165,800

12 Heating & Ventilation 24,200 190,000 214,200 I: il 13 Laboratory & Teat Statlona 13,000 222,800 235,800 14 Mill Shopa and Storea 37,200 618,800 656,000

15 Offlcea, Pirat Aid, etc. 9,800 208,400 218,200

16 Chaaical Handling and Prep. 10,900 127,000 137,900

17 Tranaport & Conaunlcation 4,300 52,700 57,000

18 Steaa Plant & Syatea 311,400 3,110,800 3,422,200

19 Miec. & Spare Parta - 2,534,000 2,534,000

20 Freight & Handling 1,360,000 1,360,000

' | MM! m (INDIO i; July 20, 1972 'Ii B-193A 07 3101 TAILI 2.M (Cont'd) N/15

It*« Labour Nata rial Total

21 tree tora Paea 4 Living txpenaat 547,000 547,000

22 Boi lor Convarilona 300,000 300,000

23 Mil Bldga. 4 Othar Structura« 4,440.000 ¿,640,000

24 Und Purchase 4 Sita Prep.(30 Ml) 750,000 750,000

lu 25 loada & Byy Sidinga 800,000 800,000

26 Baga a aa Storage Pad 450,000 450,000

27 Cat Supply to Kill 4 lagonioa 50,000 50,000

• »s 28 Power Supply to Kill ft 200,000 200,000 I i 29 Duty Tota 1 2,114 400 35,024,100 37,638,500 hi 30 Contingency 285.600 3.575.fOO 3.861.500 Hi TOTAL OIBJCT PUR COST USI 2,900,000 38,400,000 41,500,000 la 14.SO0.OOO 193,600,000 207,500,000

Noto: Iteaa 22 to 28 would bo fully contracted and ara local

expense, thua labour flguraa not aatlawted. ii!

•i (n ni í i! ® 1 r— I •*••• Ml è • UUDIO

July 20, 1972 TABU )-M 1-193A 07 3101 N/16 COST MODO. Ili

SlfltttlY Of DlUa CANTAI. UqUIlMMTS

Iti Labour Ni tarlai Total

1 lagosa« Dopi thing I!; 100,300 825,800 926,100 il 2 Baga a s« Handling 4 Storage i •{ 135, MO 907,800 1,043,700 -i 3 Dlgaatara 4 Pulp ttaahlng 210,500 1,753,100 1,963,600 'il 4 Icraanlng and laflnlng 175,400 1,347,500 1.523,100 5 Stock prap. è Papar Machinât 1,280,400 11,700,000 12,980,600 li;i! I 6 Pinien, Stora * Ship 25,500 348,100 393,600 7 »at 4 Chaalcal Bocovary ÏI 400,000 4,400,000 4,800,000

•ï: : S Ilactrlcal (Mil) I ì: 787,700 5,242,100 6,029,800 •Í !» 9 Hatar Supply 4 Iffluaat Traat 100,000 1,224,200 1,324,800

10 Mobil« Iqulpaant 793,400 793,600

11 Pira Protactlen 25,tOO 193,500 li!! 219,300

12 Maatlag 4 Vanti latloa 27,700 211,700 239,400 'P 13 Laboratory 4 Taat Statlona 17,100 276,100 293,200 li 14 Mil Skopa 4 St ora a 41,000 •87,400 728,400

15 Offlcae, Pirat Aid, ate. 14,400 282,700 297,100

'¡I It Chaalcal Handling 4 Prop. 21,100 182,800 203,900

17 Tranaport 4 Coaaaimlcatl— 7,900 88,000 95,900 !! IS Stata Plant 4 Spa ta* 312,400 3,821,200 4,203,600

Mi 19 Mac. 4 Spar« Part« 3,133,300 3,133,300 Mi 20 Fralght 4 H>«411ag 2,380,000 2,360,000 Í '* I 3! • imoio HruiKI •«••• ; MHIAt. n -1—r July 20, 1972 I-193A 07 3101 ¡i . X , X . ¡i TABLI 3-K (Cont'd) M/17 i • !! il tea Labeur Na tarlai Total 1 Kractora Pata 4 Living Bxeeneea •30,000 850,000 !! 2 Bollar Convaralofte 500,000 300,000

1 3 MU lldga. 4 Otter It rue tur« a 4,400,000 1,600,000 ^¡i ' 4 Land Purchaaa 4 tita Prop.(50 lai) 1,250,000 1,250,000 ,r I 5 Boada 4 Bvy Udlnga •50,000 850,000

a Baga IM Ito raga Pad 750,000 750,000 I!)i; 7 Gaa Supply to Hill 4 Iagmiee 100,000 i 100,000 I !( I Power Supply ta Mil 300,000 300,000 ti Mí 9 Duty - lüJLl 3,754,100 31.000.f00 54.755,000 30 CMtlagaacy 395.000 yso.ooo II! TOTAL Dina PLANT corr usi 4,149,100 5*. 150,900 »0.300,000 N 20.745,500 2*0,754.500 301,500,000 II'I li Meta: Itaaa 22 to 21 would be fully contracted are are local li! exaeaee, thua labour figurât not eatlaated. r i

li ti! 1 li © í: UMIDO lì 07 |JIOl lì July 20, 1972 R-193A U TABLE 4-N N/18 i • SUMMAIY UT INDI «CT CAPITAL UQUIUMNTS *fi » i!

11 • • CUM MODEL I MODEL II MODEL III

1) Prie« Escalation 1,950,000 2,900,000 4,200,000

2) Purchasing & Expediting 230,000 400,000 550,000

i: 3) Construction Overhead •00,000 1,500,000 2,000,000 I ir 4) Engineering * Supervision I !!i of Construction 1,900,000 3,000,000 4,000,000 5) Int. During Construction 2,700,000 4,tOO,000 6,700.000 l'I (Sub-Total-A) (7,700,000) (12,600,000) (17,450,000) 21 6) Pre-Project Expenee 250,000 300,000 350,000

Mi 900,000 1,200,000 1,300,000 7) Developaent Costa

Iì'1 8) Start-up Expense •00,000 .,200,000 3,000,000 «i ni 9) Management Contract •00,000 900,000 1,000,000 (Sub-Tota 1-1) (2.750.000) (4.600.000) (5.650,000) •P Total A • B U|$ 10,450,000 17,200,000 23,100,000 Si! WORKING CAPITAL US$ 2,360,000 6,360,000 8,400,000

Mote: 1) Suo-Total A Is subject to dépréciation charges i 2) Sub-Total • is espanse to be written off against groaa profita

I: 3) Working Capital ahora only for Intonation i!

li • I I I I Í f I

I R-193A/07/510Î Page 0/1 TAUT!

0. MANUFACTURING COSTS

I !i 0. i Centril

For calculation of manufacturing coats the various items have I been separated Into (1) Variable Costs and (2) Flx-ed Costs. ¡! Variable costs, in general, will be In proportion to tïe i -i quantities of finished papers produced. The assumption must be made I i; that all of the lteas considered will be consumed In proportion to the aetount of finished product manufactured. f Î Fixed coati do not vary with production and represent a total expense which aust be charged against whatever quantity of finished

product the siili producea. i ii It should be noted that the above concepta of variable and I fixed apply to annual coata. When expressed on a unit product basis ¡i annual variable costs become fixed and annual fixed costs become

variable. i ii 0.2 Variable and Fixed Coata I« (a) Variable Coata ï ;! (I) Bagasse - Baaed on quantities and unit coata developed in Section K.4 and Table 1-L.

(II) Waste Paper - Baaed on quantities and unit costs i i! developed In Sections J.3 & K.4 Mi (111) Kraft Pulp - Baaed on quantities and unit coata developed in Saction J.3 and 1.3.

(lv) Pulping Chemicals - Bated on quantltiea and unit costs en B-19ÌA/07/31OI - Pag* 0/2

developed tn Section J. ) and libi» 1-Ï.

I ! (v) Paperaeklng Chealcale - laied on quantities and I unit coats developed In Section J. 3 and Tabi» 1-1. (vl) Miscellaneous Chealcale - In addition to the pulping

I and pap« nna king chealcala amali quanti tin of a variety

of chcalcala ara required for water and effluent M treataent, boiler feedwater treataent, allae control, I equipment cleaning etc. A luap aua figure of

:! 6 pesos per ton has been taken to cover these lteas r It for corrugating aediura and 9 pcaoa/ton for llnerboard.

(vll) Power Conauasd - Power required for pulping of

bagassa and conversion Into paper Is estlaated

according to established standards for each type of

»•par. Power costs are bsssd on "atglaan Tarifario

No. 708770" according to the axtrsct shown In

Subsection P.2. It Is sttuasd that taxes would not i I! be laposed thus tha basic power costs only have been

1 1 applied. i' It should be notad that power costa are partly fixed and partly variable. Only the variable portion

is shown for this ltea.

(b) fixed Costs

(i) Maintenance Materials and Consumable Iteaa - These

Include paper aachlne wires and falta, lubricants, t !l I R-193A/07/Ì101 - Page 0/3 refiner plates, thickener wire«, jcreen plat«*, other

I consumable spare part« and materiali of many kind«. I ¡ Estimated at <**> pesos per ton of rated production. I The annual coat of such «ateríais has been i s s suae d as fixed because, In general, the equipment and SMchinery will operate continuously even though r I! production efficiency may vary over a wide range. (li) Power Contract - The power supplier must reserve the

It necessary amount of power for the mill so that it will

b« available as and whan required. Costa are c

calculated according to "Regine« Tarifario No. 708/70", 11 attuning that usual taxes will not apply. (Ill) Coats of Personnel - These are considered aa fixed • i because all personnel must be paid regardless of production rate. The) various tablea In Saction C

have boon used to detonine these costs.

(lv) Depreciation - Calculated according to 30 years on i !i building! and civil works, and 20 years for machinery, r i equipment and other capital cost times. Straight line basis in both caaea.

(v) Qeneral Expense - Ovar head applied to Head Office and

•ill administration,, peraonnel salariat and ia ¡ f

i I! estimated at 401 of that« salaries.

(vi) Insurance - Include)« lnaurancs on bulldlnga and their i !i ( R-193A/07/3101 - Page 0/4

content« and alao accident Inaurane« for all '! I i personnel. Calculated at current Argentine ratea I i applicable to each typ«, (vil) Intereat on Capital - Thia la a book figure calculated

I at 8X on a decreaalng balance over a period of 20

yeara. The method recommended in United Nations

"Minual for Economic Development Projecta" ha a been ¡I ueed to determine the au* which would apply to each alternative. i ! 0.3 Coata of Production

11 Baaed on the »et hod a and procedure a outlined above total and m unit coata for alternative Model« I, II and III would be aa ehown in Tables 0-1, 0-2 and 0-3. (Following pages.)

Mi ilil r i i!

( !l H

I ! ! HrtWKI ! »Ml 1 MMAL •: MMB» • NMMLTAMI UNIDO ! M«. { m > •• i; - + — • ' ••- li July 20, 1972 I-19 JA 07 3101 MM [i lev. Nov«ab«r 10. 1972 0/5 • • lì U kILI 1-0 ; i

MDML I - NANUPACTUIINC COSTS ! jl 166 ADT/D (6% HOISTUlt) COUUGATING «DIU* i! $a $a Quantity Unit Annual Coat/Ton VAIIAILI Unit Par Yaar Coat Coat Product -} I» Bagaaa* *: O.D. tona 83.960 31,199 2,619.468 ti III it« Paper O.D. tona 5,080 A. D. tona (5,640) 310 1.748,400 n» • a Pulping Chealcala for- lì 46,8S0 O.D. Tom "•• tag«a•• Pulp :i ï Í MaOH (120 kg/OD M ton Pulp) Tona 5,620 981 5,513,220 li Pap*nuking Chevlcala li Alúa Tona 850 575 488,/50 Sit* Tona 560 1388 777,¿80

Mtacellaneoua Chealcal a 338,600

Power (conauaed) KWH 33,160,000 * 1,600,000

Fuel (natural gaa) •3 22,112,500 ** 1.742.300 262.72 14,828,018

* Sta Appendix II.3 i! ** !•• A»p«tt41x IX. 5 I Û nlì l I I " • •««rtr„ *t^l&qfâ^Ç#tQiçf*ier- *

* RtPtMNCI INMI tiHtAt. it UWIDO îi lì July 20 1972 •-19 JA 07 3101 !» tv Novtnbar 10, 1972 0/6 i • !i il TABU 1-0 (Cont'd) Annual Coat/Ton I il rutto Coat Product

Halntananc« MCcrlaU 4 11! Conaunaalaa 2,539,SOO r Contract 1,413,400 I t: Ptraonnal-Naad Offlco 1,031,800 IMI' • IH Adaln. 1,97),000 lì -Mill Operating 2,10é,3O0 I »e -MU Maint. 475,440

Dapraclatlon 7,440,000 !» I Oanaral Kxpanaa 1,202,000 ij Inaunanc« 1,000,000 I» Inttrtat on Capital •.657.000 24,110,740 462.63 li! TOTAL 40.93S.758 725.35 f i! I

1 i! II II!

tal • H

I

î: UNI M I; July 20, 1972 »-193A 07 3101 i " 0/7 • !i lev. Novcabar 10, 1972 TABLI 2-« I• i! HOMI. II - HAMUFACTUKIMC COSTS ¡i 330 ADT/D (61 MOISTUU) LimUOAIO u $a »!! Quantity Unit Annual Cot t/Ton VA1IA1L8 Unit Par Tear Coat Cost Product !1 Bagas*« 0.0. tena 157,280 35,397 5,567,240 I lì Iaportad Pulp 0.0. tona 29,730 ! A.D. tona (33,030) 890 29,396,700

1 Pulping Chaalcals for: i! 69,560 0.0. Tons lii la gas sa Pulp ïi M«2C03 (*5 kg/Ton [ li Pulp) Tons 3,130 585 1,831,000 Liaastoaa (90 kg/0.0. 11 Ton Pulp) Tons 6,260 33,75 211,300 If Pap«making Chaalcals

Ili Aliai Tona 3,930 575 2,259,800 lì Sita Tona 2,250 1388 3,123,000 • il Starch Tona 560 860 481,600 Miacallanaoua Chaalcals 1.009,800

Povar UM 99,960,0009 * 2,898,800 3 Pual • 42,460,6004 ** 3.293.400 fi!n 50,072,640 446.28

i *» * Sa« Appendix IX. 3 Í | :i si ** So« Appendix IX. 5 1 s II

lil • I nriMmi r.í: UNIDO ii July 20, 1972 Í-193A 07 3101 h »tv. Novaabar 10, 1972 0/T I ¡¡

I I! TABU 2-0 (Cont'd) il I $• Annual Coat/Ton II Coat Product I ti •i FIXID il * I ti HaIntananea Matarlala fc Cona urnabla• 5,049,000 li!!

» • Power Contract I «; 2,686,300 Sí ti Paraonnal-Haad Of flea 1,031,800 I ii ri -Mill Adain. 2,424,000

I -Mill OparatIon 2,694,100 I •Mill Maint. 788,140 li Dapraclatlon 12,675,000 I li Gana ral bpanaa 1,382,000 > * I II Inauranca 1,642,000 Intarcat on Capital 11.361.000 • • 41,733,340 371.95 Í si TOTAL 91,805,980 818.23

li:

pli

li II I j» M t S! i HfmKi IMOCI M»*l. MANTS UNIDO r_. 0*T1 TABLI 3-0 1-193A 07 ! 3101 !! July 20^JL972 ; lev. November Í0, 1972 0/9 MODEL III - MANUFACTURING COSTS IH• • i; : • 166 ADT/D (61 MOI STI II) COUUGATI NC MEDIUM I lì +330 ADT/D (6t MOISTUU) LIN Ell BOARD u $a I il quantity Unit Annual .Coat/Ton VARIABLE Unit Per Ytar Coat Cost Product U I Bagasse O.D. tons 241,240 38,768 9,418,000

War re Paper O.D. tons 5,080 I i; A.D. tons (5,640) 310 1,748,400 lì! 1 Kraft Pulp O.D. tons 29,730 A.D. tons (33,030) 890 29,396,700 Jî H Pulping Chetili cal a for: 46,850 O.D. Tona Corrugating Bagasse * i • Pulp i î? is Na2CO3(30 kg/O.D. I Ton Pulp) Tons 1,400 585 819,000 !? Lime atone(60 kg/0.D. Ton Pulp) Tona 2,800 33,75 94,500 ! 69,560 O.D. Tons Liner board Bagasse I il Pulp II Na2C03(45 kg/O.D. Í Ton Pulp) Tona 3,130 585 1,831,100 ss :*. « « Limaatona(90 kg/O.D. s: Ton Pulp) Tona 6,260 33,75 211,300 il s5 Papa making Chemicals

Alum Tona 4,780 575 2,748,500 2! Sisa Tona 2,810 1388 3,900.300 u Starch Tona 560 860 481.600 11 Mlscellane<.'ia Chemical a 1.348,400 »i UMIDO H July 20, 1W2_ ; Ì-193A j 07 i 3101 il J li lav. Nov*nb«r 10, 1972 TABLI 3-0 (Cont'd) ¡¡¡¿r~o7Io~ li i • la la fi quantity Unit Annual Coat/Ton VA1IABLI unit Par tear Co». Coat Product li m,120,000 4,496,000 Puel •4,773,100 »••n.7Q0 II 61,370,300 363.91 ti % * See Appendix IX. 3 i; i? ** SM Apptndix II. S

• • PIOD lì Sí Maintenance Materials & fi 7.5M.IOO »e Consumables

Power Contract 4.169,700 Î! • : Personne 1-Haad Off le« 1,031,100 !» il w •Mill Admin. 2,633,200 -MU Opération 3,370,300 fi •Mill Meint. 1,Oil,240

Depreciation IS,220,000 !! Cenerai Expanse 1,474,000

Hï! Insurance 2,297,000 *!I» i'I". Interest on Capital 16.327.500 3C.213.740 345.20 i! TOTAL 119,564,040 709.11

!! UIS

• • -193A/07/31O1 - Pag« P/l » MtVMfllf AtfTt

P. P1HAMC1AL AM) P.C0W0H1C AMALYI11

r.i Utili Tabic« for the evaluation of financial aspect! hav« been

prepared and ara Included at follows: (expressed In Ar gant In«

pesos) ¡I - Incoaa ftataaant Projection • Reauua of Plnanclal Appraisal

In rafaranca to tha dlffarant coat «©dele, nuaaerlng of

I Íu the above tablea la arranged (In tha orear In which they appear above): Ml Modal I : 1-P, 2-P I ! Nodal 11 : 3-P, 4P Modal III : 5-F, 6-P 'Ü P.2 Method, and Asiuaetlona (a) Canora! 1 !! Tablea 1-P, 3-P and 3-P (Incoa« ftataaant Projection), i I! having been developed by «taadard aethode, require no ?» I explanation. <»> TtT.tt i-r. ir fn< >-r

la calculât to« of tha lacca» Stateaeat Project lone

1 (1-P, 3-P and 5-P) the following •••weptions hav« been aada: s ( I Cal. Ai lalea would begin January 1 of the 4th year after the beginning of construction, averaging 701 of rated aill

capacity in tha lat operating year, 951 in tha 2nd and 1001 i !l H-193A/07/3101 - Pâgt P/2 M . COMMUANT!

the 3rd year and thartafttr.

Col, B: Th« only taitt costs which htvt b««n includad

art provincial and municipal taxât on profltablt «nttr-

pjlttt, which w« tttlMtit at about 21, and tha national Il talaa tax, basically 101, but which will vary ovar tht Ut tsn yaart bacaus« application of Law No. 19614 and Dacrtt I No. 2358 of tha National Ixecutlv« Authority will grant partial txtaptlont to th« «ill. I Othtr aalat «xp«nt«t h «va baan contldarad to b« Included I la Haaufacturlng Costs. Col. D; Production costs havt baan taksn froai Tab Iti 1-0,

I 2-0 and 3-0 taking into account that varlabla costa would b« I 701 In tht lat oparatlng yaar and 951 in the 2nd. Ü Coi, I; Indiract Capital Costs (not tubjact to daprtclation) I II would ba aaortlsed ovar a parlod of flvs yaara as paralttad

by local regulations and standards.

• I! Col. C; Capital has bstn aasuaad to b« 40% equity and 601 f ;! loans, which we consider to be realistic within the actual

poaaibilitiea of the aarket. Loans would be over a 13 year

period at 81 Interest th« first payaant on principal being

•ade at the end of the first year of operation, i.e. ten ! •quel payaant a starting the 4th year after the beginning of

' Ü construction. i ii R-193A/07/3101 Pag« P/3 ( • COMMUTANTI

Por ci'- ,lit ion of loan development, bade rotala h ava I btan enttmeted aa follow«: ($*) Modal I Modal II Modal III

Capttal Coate 172,250,000 293,500,000 417,000,000

1 leee- Int. on Capital 13^500.000 2». 000.000 _33,?09,QQO JI .'I 1*8,750,000 .b9,500,000 383,500,000 i: Working Capttal 11.800.OOP 31.800.000 4,2,000,000

170,550,000 301,300,000 425,500,000

Ir Equity Capital (40V 68,220,000 120,520,000 170,200,000 •i Loaa Capital (»01) 102,330.000 180,780,000 255,300,000 !! Col. I: Incoa* tax for United coapantes la 331 on n«t II profita. Aleo the coapanlea auet pay 1 51 par year on capital, reearvea, and undletrlbuted profita, Î A préférant lai eyatea aleo exlete for enterprleae which aake Investments in the Provlnca of Tucuman. ly law No. 19614 !! and Decree Mo. 2558 of May 2, 1972, the National Executive

Authority eetabllehed a eyatea of exemption from différant * ;l taxes, aaong thea the talea tax and taxât on revenu* and capital. Thla relief can be up to 100% In the flret four

year a froa etart-up and la progressively reduced until It

reach«e 101 in the tenth year, the laet year of exemption.

Différant promotional iones have been da eignet ad, eoa» of

which benefit froa the 1001 exaaatlon already aentionad, and

othare oaly up to 601. 'or purpoeaa of calculation It haa

• K-19ÎA/0//J101 - Page ?/<* il. cemwTMTt

been considered that any of the milla propoaed would receive

the 60% exemption rate. Income »'ibject to taxes it derived

by adding the total of column H ('-P, 3 P and VP) to the

lntereat on capital »o that it Is not , in fact, a bookkeeping Il deduct i on. Col. H. 0. P. Il In order to compare the economic desir-

i: ability of the three aelected modela the following analyaea,

ahovn In the above tablea, have been made The Internal rate

I> of return la the rate of interest which equalises the real si valu« of the balance of the annual caah flow with the real

valu« of annual Investments

Col. M: The period for recovery of capital (pay-out period)

la derivad from Col. I- which shows the net cash flowa.

Col. F: For calculation of the rate of return on total

il lnvestsasnt and on equity capital the average annual groaa

Incoa* haa been taken. These represent reepectlvely incoe»

M before taxes, and lnclud«a Interests. ¡I Aa this index la only for the purpose of comparing the

three models the "break-«van" point haa been calculated on

the beala of profita without taking Into account the amorti- li sation of Indirect Capital Costs or interest on loans, i.e. M! coluawie I and G of Tablee 1-P, 3-P and 5-P, but estimating aa allowance for taxe« on capital.

1 ! i • I r- R-193A/07/3101 - Pag« p/5 II. CWMMTMff*

P. 3 Analyst»

To facilitate «valuation of each of th« model« In respect to

th« other« th« Individual economic indices in Tables 2-P, 4-P and

6-P have been sumnarlzed as shown below: i ¡ Model I Hodel II Model HI Internal tate of Return Mot 9.61 9.01

Years for Pay-back Viable 6 6 1/2

Return on Investment \ u (a) Total Capital 19.61 17.91

(h) lowlty CepUel 48.« 45.01

•reak-even Point (1 Prod.) 7 71 84.01 ¡i This summary illustrates the economic advantage of the Model II and Model III alternative« which «ay b« considered of about equal

profitability within the limits of error of the present study and

without the analysis In greater depth which would be made in a !! definitive feasibility study. It la evident that the selection of

the Model to be implemented would be influenced by the availability i of capital. i Looking a little more closely at the Model I and III analyse« and examining ««pectally the production coats in Tables 1-0, 2-0

and 3-0, It may be observed that th« cost« of corrugating medium i I! production improve to a great extent when it la combined with V llnerboard. i1 !l téH, R-193A/07/3101 Pag« P/6 I» • COMMUTANTI

Model 1 Model II Model li! í Corr. Liner Corr Liner

Ik Salea Price per Ton $• 900.00 $«1500.00 $*«00.00 $*l>00.00 li It Product ion Coat 723.33 822.01 55

!l Groea Profit 176.67 677.99 345.82 795.31

Thla clearly ahowa the desirability of implementing Model III

'\ if aufflclent capital la available. If the availability of capital

la reatrlcted Model II ce*ld be considered becauac, aven if a

1 dividend policy in the order of 101 la assumed, it would be poailble Ir to expand to Model III within four to five yeara with conaiderablt

increaae in financial advantage through reinvestment of the profita

generated. lì To conalder atartlng with Model II, or production of llnerboard Ü only, the definitive feaeibllity atudy would have to be very thorough In reapect to the poealble market a and potential aourcea I! of corrugating medium during the period required to accumulate the I! funda necesaary for expanaion to production of both producta. The ii rlak would alwaya exlat that other enterprlaea might atart up in the interim manufacturing both componente of containerboard which

could make it difficult to market llnerboard only.

P.4 Balance of Payment fenegUs

In 1970 Stadler Hurtar (with COAftA) carried out for the

1! Argentine government an lnveatment atudy for a newsprint mill

which had aa ita fundamental purpoae the achievement of the eavlngs

il MW *-193A/0?/J10l Pag* P/7

which such ar industry would imply. In 1968 imports ut newsprint

represented an annual expenditure of SOM U$S 40,000,000. Imports

of this magnitude still exist and will continue tu be necessary until ¡i national production can be Initiated, hence the Government has recently I Issued a call for tenders for this Industry. Thi dastand for newsprint 1 Is increasing and could reach UIS lOO.OOO.OOC worth of laports by 198V 'i In the above study It waa concluded that , In order to achieve the production levels Indicated by the demand projections, the i !¡ required long fibre pulp would have to be Importad. In view of the existing surplus of wood on th* delta of the Panama River it would not

>e necessary, however, to Import the aachanlcal (or short fibre) portion

of the furnish, ly means of aoeat substantial increases In planting of

wood or< the Delta, which were recommended In the report, the essentially ü short flbrs portion of even th« largest production visualised could be satisfied using wood froa this source. !! The study which Is hsre presented shows • large demand for

I! container board which will occur during essentially the same period 5 for which the newsprint projections were made and which could require very appreciable imports of finished products of this type.

In the event that Industrias to produca this latter product are

|! Installed In the country, theea also will require vary large quantities I! of short fibra pulp which, if not produced frost sugar cane bagasse and the' production of newsprint la implemented, must Inevitably be obtained

through importation of short fibre pulps. Baaed on the short fibre i !l <* t-1 K-193A/07/3101 - Pege P/8 I! il consunptlon races oí the alternativ« ailla considered tha value of

auch lepori• coula reach U$$ 12,000,000 per year. i * Although theaa latter supplias fro« abroad could aventuaily be

replaced by eeana of new plantations this would raqulre quite a nuaber "ì of ytars. At least 7 to 8 years would be required before harvesting of wood planteé In che first year would be possible. 1 ¡i I •i i«

i

Ml I

I I

i I!

i !l L • '••rt*>m&"'<*-&-tfw

MODIL I - IM

B D £ F »- • w •>**• •»•». ••••*- " taorti'lâtîor. Salai Tax Manufacturinf of Indiract Net jparating TasT Salsa and Coita Nat Racaipta Coa ta J api t«I Coat Ine A-B -D-E

2 3 4 35.557.200 1.882.344 33.674.856 36.490.340 2.750.000 (5.5&5.4S4 5 48.256.200 2.554.624 45.701.576 40.197.340 2.750.000 2.754.236 6 50.796.000 2.689.020 48.106.980 40.938.758 2.750.000 4.418.222 7 50.796.000 3.191.020 47.604.980 40.938.758 2.750.000 3.91o.222 è *J.?96.0QO 3.692.920 47.103.080 ¿0.938.758 2.75C.CO0 3.414.322 9 5O.7H.00O 4.194.920 46.601.080 40.938.758 5.662.322 10 50.796.000 4.096.820 46.099.180 40.938.758 5.16C.422 11 50.796.000 5.198.720 45.597.280 40.938.758 4.653.522 12 50.796.000 5.198.720 45.597.280 40.938.758 4.658.522 13 50.796.000 5.198.720 45.597.280 40.938.758 4.658.522 14 50.796.0» 5.198.720 45.597.280 40.938.758 4.658.522 15 50.796.000 5.198.720 45.597.280 40.938.758 4.658.522 16 50.796.000 5.198.720 45.597.280 40.938.758 4.658.522 17 50.796.000 5.198.720 45.597.280 40.938.758 4.658.522 IB 50.796.000 5.198.720 45.597.280 40.938.758 4.658.522 19 50.796.000 5.198.720 45.597.280 40.938.758 4.658.522 20 50.796.000 5.198.720 45.597.280 40.938.758 4.658.522 a 50.796.000 5.193.720 45.597.280 40.938.758 4.658.522 22 50.796.000 5.198.720 45.597.280 40.938.758 4.658.522 23 50.796.000 $.198.720 «•J97.280 40.938.758 4.658.522

99t.ia.400 90.485.028 907.656.372 813.585.324 13.750.000 80.321.048

Amortización Rasuitado Iapusstos j Infraso« Costo do da Coatoa Nato mo Toni«* Qaatoa da Tanta Natos Producción Indirectos OparatiTo

mtmmtt«»- i I 1

-:fl«^.#!*.-V *#?**•' m$- • *%n**+

TAhLE 1-K

MODU I - INCOME STATäUH PROJCTION (fa;

£ F G H I J K L ..ortization Outlay Nat >f Indirect Net Operating Interest Income and Net Incorna for Cash ' ipital Cost Incoa« on D«bt Nst Incoa« Capital Tax after Taxss A3S«tS Flows C-D-l F-0 r-i J-K

58.000.000 ,5^.000.000; 2.800.000 ( 2.800.000; 53.O0C.OOO ; 53.000.000; 5.600.000 ( 5.&00.0CG) 54.55C.oOO (54.550.000) .750.000 (5.565.484) 8.186.400 (13.733.884; 316.700 (5.882.184) ; 5.382.134) .750.000 2.754.236 7.367.760 ( 4.613.524; 327. 30C 2.426.936) 2.426.936 i.750.000 4.418.222 6.549.120 ( 2.130.??*) 35?.«00 '(.065,^? 4.065.422 !.750.CW3 3.916.222 5.730.430 ( 1.314.253) 380.(XX) 3.536.222 3.536.222 >.75C.OOO 3.414.322 4.911.840 ( 1.497.513) 50O.OOO 2.914.322 2.914.322 J.662.322 4.093.200 1.569.122 2.096.000 3.566.322 3.506.322 5.160.422 3.274.560 1.385.662 2.623.700 2.536.722 2.536.722 4.658.522 2.455.920 2.2C2.602 3.082.700 1.575.322 1.575.322 4.658.522 1.637.280 3.021.242 3.736.900 921.622 921.622 4.658.522 818.640 3.339.882 4.438.900 219.622 219.622 4.658.522 4.653.522 4.890.000 231.473) ( 231.478) 4.658.522 4.658.522 4.806.000 147.478) ( 147.478) 4.658.522 4.658.522 4.3C6.U00 k 147.478) ( 147.478) 4.658.522 4.658.522 4.306.000 : 147.473) ( 147.478) 4.658.522 4.658.522 4.806.000 : 147.473) ( 147.478) 4.658.522 4.658.522 4.806.000 ( 147.478) ( 147.478) 4.658.522 4.658.522 4.306.000 k 147.478) ( 147.478) 4.658.522 4.658.522 4.806.000 ( 147.478) ( 147.478) 4.658.522 4.658.522 4.806.000 ( 147.478) ( 147.478) 4,658,522 4,658,522 4.306.000 ( 147.478) ( 147.478)

L3.75O.00O 80.321.048 53.425.200 26.913.648 65.999.000 L4.322.O48 I7O.55O.OOO

kaortiaaeion Resultado Inter«sss Iapuesto Flujo de de Costo« Nato Soor« Beneficio • Los Réditos leneficio Neto Gastos d« Fondos Indirectos Operativo Créditos Meto j Capital de Lapuestoe Bienes de Uso Neto

ili l'i iW

«•SB 8 I s. *'* *' Vi \ ***-«*»"•-- '.**** -•

/ a-193A/ 07/31ûl - Pajs P/9

K M . ..• 0 i jutiay Kst Cumulât sd Pressât Vaius for Cash Cash Frsssnt Valus of Cash A3S«tS Flows Flows Fuetor Flows J-K 5* 1 x N

58.000.000 I5a.000.uu0> ( 58.0OO.000) 0.9524 (55.239.000) 53.^-0.000 (5a.ux).ooo) (116.000.000) 9070 (52.606.000) 54.55^.000 (54.550.000) (i7O.55O.UOO) 36>3 (47.120.000) ( 5.382.134) (176.432.184) 8227 ( 4.839.000) 2.426.936 (174.005.248; 7335 1.902.000 4.065.422 (169.939.826) 7462 3.034.000 1.«iV>.222 (166.403.604] 7107 2.513.000 2.9Ì4.322 (Ib3.489.2l2] 6768 1.972.000 3.566.322 (159.922.960;) 6446 2.299.000 2.536.722 (157.386.238, ) 4139 1.557.000 1.575.822 (158.962.060 ) 584? 921.000 921.622 (158.040.438 > 556« 513.000 219.622 (157.820.816 ) 5303 116.000 ( 231.478) (I58.O52.294; 1 5051 ( 117.000) ( 147.478) (158.199.772 ) 4810 ( 71.000) ( 147.478) (I53.347.250 ) 4581 ( 68.000) ( 147.478) (158.494.728 ) 4363 ( 64.000) ( 147.478) (158.642.206 ) 4155 ( 61.000) ( 147.478) (158.789.684 ) 3957 ( 58.000) ( 147.478) (158.937.162 ) 3769 ( 56.000) ( U7.478) (159.084.640 ) 3589 ( 53,000) ( 147.478) (159.232.118 ) 3419 ( 50.000) ( 147.478) (159.379.596 ) 3256 ( 48.000)

170.550.000 ( 145.623)

Flujo da «susulado Factor Valor Frsasnts ito Gastos ds Fados Flujo ds 4s Valor ds Flujo ,a Blsnss

pRi»4J#isil

Pafìna P/9 1

i- i'; á • UMIDO i; lì July 20, 1972 i R-193A 07 3101 <• P/10 • •

* í Ü •• •

!! TA1L1 2-F i u i! HOHL I - UNII« OF rilUBCIAL KTTtÁlUL i • i rí i;

?!! s| 1 • T Th« projact «conoalcally la noe vlabl«

« í ü !f ÏI i:

!»

If" íi • « • i

! • :} s Î n>:

> í!

3 l Vi [ il :i I • 1 ^.'.í-.^-' «ÍW¡Í$¡8gft ¥f*'.,*-'**--í. '•¡«fsj*-,- #|i*(i!i«-.'fe»-- *)(•"»•<»• •«•v

B D £ Amortization cíales Tax Manufacturing of Indirect N^t Operating Inter- Year Saie: and Costs Net Receipts Costs Capital Coat Income on D< A-B C-D-E

3 y.OLu 4 117.310.000 6.OO6.4C0 111.303.600 76.784.140 4.6^0.000 JC.419.4Ó0 14.4o2 5 159.335.000 3.151.600 151.733.400 39.302.340 4.600.C00 57.-'31.060 13.01o 6 168.300.000 3.530.600 159.719.400 91.305.930 4.6C0.0O0 63.313.420 11.569 7 16Í.3OO.000 10.145.000 158.155.000 91.805.980 4.600.000 61.749.020 10.123 8 168.300.000 11.709.400 156.590.600 91.805.980 4.6OO.X0 60.134.620 8.677 9 168.300.000 13.273.800 155.026.200 91.805.930 63.220.220 7.231 10 168.300.000 14.838.200 153.461.800 91.805.980 61.655.820 5.784 U 168.300.000 16.402.600 151.897.400 91.805.930 60.o91.420 4.333 12 168.3O0.000 16.402.600 151.897.4C0 91.305.980 60.091.420 2.392 13 168.300.000 16.402.600 151.897.400 91.305.980 60.091.420 1.44o 14 168.300.000 16.402.600 151.897.400 91.805.980 60.091.420 15 168.300.000 16.402.600 151.897.400 91.305.930 60.091.420 16 168.3OO.0C0 16.402.600 151.897.400 91.305.960 o0.091.42c 17 168.300.000 16.402.600 151.897.400 91.805.980 oO.. 91.420 IB 168.3OO.0O0 16.402.600 151.897.400 91.805.980 oc.v91.420 19 168.300.000 16.402.600 1J1.897.40C 91.305.980 -X., 91.420 20 168.300.000 16.402.60C 151.897.400 91.805.980 o»-.u91.420 a 168.300.000 16.402.600 151.397.400 91.805.98C oC.v. 91.420 22 168.300.000 16.402.600 151.897.ltO0 91.3C5.930 ot., 91.420 23 168.300,000 16.402.600 151.897.40C ?*i«WiW o,. 91.420 3.307.095.000 285.938.3uc ¿.021.156.200 1.313.594.120 23.utO.oCO 1.179.có2.03©

amortización he altado impuestos J Ingresos Costo de de Costos 'ato Ane (•'•r.tas 7a«tea le Venta Metos Production Indirectos perativo r.T*sw^-*&i«wssfir -f~?ï9»^-, *imm-°*-v

MODEL, II - INCOME JTATûMISHT ¿'ft JÄ^TluN (*a)

: L ¡ . I J Y, F ^ Outlay Net ¿ation Iiu^rr.e and Net Ir: <:.-C for Cash iirect Net Operating Interest Assets Flows Cost Income on Debt iVit ce :apitai Tax After Taxer. F-1 C-D-S

9o.XiO.XC ( 90.000.000J ( 94.300.000) ( 4. "i,., •'••••) ¿0.000.000 4.300.000 ( 4. '•'• . •• ; { 1.6"0. 1..0; l.'.1.3 -û.o00 (130.900.000) 9.6o0.cOO 28.104.360 ; 2.3U.400 28.104.360 I4.4o2.4o0 15.9S7. A 49.407.560 } 41 •'•»' V. - 'J0 57.831.060 13.016.160 44. i/+. ') 'o «.423.500 53.711.220 r '-• •!.711.22v. 63.313.420 11.569.920 51.7*3. • • 9.'X- .200 r 'l.dîo.UO 51.330.420 61.749.C20 10.123.630 5l.62 .3^ 9..i 63.000 47.7'5.32'-> 47.735.320 60.194.620 8.677.440 51.507.130 12.399.3oO 47.331.120 47.331.120 63.220.220 7.231.2QO 55.9B9.02J 15.389.100 42.987.920 42.9*7.920 61.655.320 5.734.960 55.370.360 13.667.900 38.624.420 33.624.420 60.091.420 4.333.720 55.752.7^0 21.467.000 35.371.320 35.371.320 60.091.420 2.392.430 57.198.940 24.719.600 28.060.600 32.030.320 32.030.820 60.091.420 1,446.240 58.645.130 29.796.520 60.091.420 30.294.9OO 29.796.520 60.091.420 23.5o3.42C 6O.O9I.42O 31.523.uOO 23.56-3.420 60.091.420 23.508.420 23.568.420 60.091.42o oO.091.420 31.523.000 28.56S.420 28.568.420 60.091.420 60.091.420 3i.523.OOC 28.568.420 28.568.420 60.091.420 60.091.420 31.523.000 2-3.568.420 23.508.420 6C.091.420 60.091.420 31.523.000 23.508.42O 28.568.420 60.091.420 6o.091.42C 31.523.000 23.568.420 28.56t.420 60.091.420 60.09l.42v, 31.523.000 23.5o3.42L 28.568.420 60.091.420 60.091.42C 3I.523.OOO 3I.523.00O 23.566.420 28.568.42C 6C.091.420 60.091.420 ,..000 1.179.562.030 93.943.200 1.085.613.380 465.U4.3O0 699.747.730 I39.3OO.OOO

Flujo de Resultado Intereses Impuesto '.ación beneficio Neto Gastos de Fondos Neto Sobre BeneTicio a Los Réditos osto» y CapitU de Impuestos Bienes de Uso Neto t-ectos Operativo Créditos ¡»eto

inw

ttMMM :, -#> •%*$#*

R-193/C7/31C1 - Page P/11

L H 0 P R Net Cumulated Present Value Factor Present Value of Cash Flow Cash Cash Flows Flows a* ii* 1« UN Lxli

( 90.000.000; ( 90.000.000) 0.9259 0.9091 ( 33.331.0C0) ( 31.319.000) ( 94.300.000) (134.8CO.000) 8573 3264 ( 31.272.000) ( 78.343.OC0) (130.900.000) (315.7C0.00C) 7938 7513 (103.908.000) ( 98.345.000) 28.104.360 (237.595.140) 7350 6830 20.657.000 19.196.000 49.4C7.56C (233.190.530) 6306 62C9 33.627.000 30.677.000 53.711.22C (134.479.36c) 6302 5645 33.349.000 30.320.000 51.330.420 (132.593.940) 5335 5132 30.272.000 26.625.000 47.735.320 ( 34.313.620) 5403 4665 25.818.000 22.292.000 47.331.120 ( 37.432.500) 5002 4241 23.675.000 20.073.000 42.987.920 5.505.420 4632 3855 19.912.000 16.572.000 3^.624.420 4289 3505 16.566.000 13.538.000 35.371.820 3f71 3186 14.046.000 11.270.000 32.030.820 3677 2897 11.778.000 9.279.000 29.796.520 3405 2633 10.146.000 7.846.000 23,563.420 3152 2394 9.005.000 6.839.000 23.568.420 2919 2176 8.339.000 6.216.COO 23.568.420 2703 1978 7.722.000 5.651.000 28.568.420 2902 1799 7.148.000 5.139.000 23.568.42C 2317 1635 6.619.000 4.671.000 28.568.420 2145 I486 6.128.000 4.245.000 28.5óe.42C 1917 1351 5.676.000 3.860.000 28.568.42C 1893 1228 5.254.000 3.508.000 28.568.420 1703 1117 4.865.000 3tmt909 32.591.000 ( 7.499.000)

Flujo de Acumulado Fondos Flujo de Factor de Valor Frètent« 30 Neto Fondos Valor Presente da Flujo de Fondos

P/ll WLLxlkt ¿5 UMIDO lì lì July 20, 1172 t-193» 07 3101 Si P/12 H

i! TA1LI 4-r

ti MOBIL XX - UHM Of rXMARCIAL ATVUXIAL •i

I ìì 1. Intimai Rat« of tat urn: 9. il

\\ 2. Payback Parlo* lì» •> \t Oa laxity Capital

«ili 9 yaars fra« start of coastr««tloa SI » yaars froa start of aparatIan !l 3. tatara oa Xnvastasat a. Oa Total Capital il Assats

HifTtiaW • 19.« 301,300,000

». Oa lawlty Capital

t il MI7l.M0.au I 120,320,000 li 4. lT«ak-a>oa Foia* I Approaiaataly 771 ai praéaatl«

!!

ìI 0 i 41— MW'- ** ir*?**** ,1 •"*»«...» . »,.

Ï.CJEL

B Araortiz ttion Sales Tax ! anuf ¿cturing of Indirect 3t Operating Year Sales and Costs Net P eceipts Costs "apit'il Jost Income A-B C-J-E

I 1 2 3 4 153.367.200 7.922.444 145.444.756 101.172.950 5.J50.0U 38.u21.806 5 203.141.200 10.751.924 197.339.27o 116.515.525 5.o5c.C'C 75.223.750 ó 219.096.000 11.317.820 2C7.771.130 119.534.C4C 5.o5C,uOC 32.544.140 7 219.096.000 lj.398.620 ^5.697.3^0 119.534.C40 5.O5C.0GC 30.463.34c 8 219.096.000 15.479.420 203.616.5B 119.534.04c 5.ür,C.LUC 78.332.540 9 219.096.000 17.560.120 201.535.880 119.534.04.0 31.951.340 10 219.096.000 19.640.920 199.455.080 119.534.040 79.371.040 11 219.096.000 21.721.720 197.374.230 119.584.040 77.790.240 12 219.096.000 21.721.720 197.374.280 119.584.04C 77.790.240 13 219.096.000 21.721.720 197.374.280 119.584.040 77.790.240 14 219.096.000 21.721.72C 197.374.230 119.584.04c 77.790.240 15 219.096.000 21.721.720 197.347.230 119.584.040 77.790.240 16 219.096.000 21.721.720 197.347.28t 119.584.040 77.790.240 17 219.096.000 21.721.720 197.J47.280 119.584.040 77.790.240 18 219.096.000 21.721.720 197.347.230 U9.584.04o 77.790.240 19 219.096.000 21.721.720 197.347.280 119.584.040 77.790.240 20 219.096.000 21.721.720 197.347.280 119.5*4.0 40 77.790.240 21 219.096.000 21.721.720 197.347.230 119.534.040 77.790.24C 22 219.096.000 21.721.720 197.347.28C 119.534.040 77.790.240 23 219.096.000 21i74e7ft _ 197.317.280 77.790.240 4.305.236.400 378.453.628 3 .926.7^.772 ;.j70..ol.l95 23.250.CCO 1.523.331.57o

Amortización Resultado Impuestos j Increto« Costo de de Costos Neto no Ventai Gastos de Veni« Neto« Producción Indirectos Operativ»

•Hl *p%- ...«»••SWWrt *f-&s>?*i<*t***»m'*

r¿r.z 5-ì

i:cDEL in - I:;J..I.S STATE..-.: : r.

E F G I! 1 J K L Amortization Outlay Net of Indirect Nat ("peritine Interest 11 e -rr.e ani Njt Income for Cash Capital Cost Incoo« on Deot Net Incoir.fi Jafltai lax After Taxas Assets Flows C-D-E F-I

130.000.000 (I3O.OOC ö.800.000 ( o.o.o.ooo) 1:0.000.000 (I30.OOO 13.ocO.000 (13.oOO.UGOJ 105.5c0.000 (I05.5OO 5.O50.00C 33.u21.306 20.424.000 13.197.-r-o 2.969.200 35.652.600 35.652 5.Ó5C.OOC 75.223.750 13.331,600 56. ^-.151 11.002. ex û 04.221.150 64.221 5.650.000 32.5U.UO 16.339.2C0 66.-:04..9¿*o 1..,-J19.'JL0 69.9-4.540 69.924 5.O50.000 J0.463.34l 14.296.300 'jó. loo.'; 4^ L<.y.37.1oC o7.476.240 67.47o 5.o50.COO 79.332.540 12.254.4U0 66.123.140 16.339.30o 62.043.240 62.043 64.951.340 10.212.000 71.739.340 20. '75.700 ol.076.140 61.07o 79.371.040 8.1Ó9.600 71.701.440 24.549.200 55.321.340 55.321 77.790.240 6.127.200 71.663.040 23.256.200 49.534.040 49.534 77.790.240 4.034.800 73.705.440 32.573.400 45.216.340 45.216 77.790.240 2.042.400 75.747.34C 37.015.400 40.774.840 40.774 77.790.240 77.790.240 39.979.700 37.810.540 37.tlO 77.790.240 77.790.240 a. 503.000 36.322.240 36.822 77.790.240 77.790.240 a.503.000 36.822.240 36.822 77.790.240 77.790.240 41.503.000 36.822.240 36.822 77.790.240 77.790.240 a. 503.000 36.322.240 36.822 77.790.240 77.790.240 a.503.000 36.822.240 36.822 77.790.24C 77.790.240 4l.50¿.000 36.822.240 36.822 77.790.240 77.790.240 a. 503.000 36.822.240 36.822 77.790.240 77.790.240 a. 50 o.ooo 3Ó.8J2.240 36.822 77.7?0,2tf?. 77.7?0.¿40 4l.5OJ.0O0 3o.322.240 36.322 r 23.250.000 1 , )23.331.57o 132.732.000 1.395.599.577 oL¿. 739.4-'') 920.452.170 425.500.000

Amortización Resultado Intereses Impuesto Flujo de Costos Neto Sobre Beneficio a Los Réditos Beneficio Neto Qftstoa de) Fond Indirectos Operativ« Créditos Neto y Capital de Impuestos Menés d« Uoo Net ^x&ßmf&iFm)!*: *¡mm$^^^m*^^ ^m^^ßM^^y^-^- *•"

R-1V3A/07/3101 - Pact p/13

K L H N 0 F 1 .tlaj Hat Cumulated Present Valu« Factor Prtaant Valu« of C*ah Flow« "or CMh Cuh , sets Flow« Flow« n 10Í 9% 10*

;.ooo.ux) (i30.ooo.cxx); (i30.OOO.CXX); 0.9259 0.9091 (120.367.000) (U8.183.000) .JO0.0OO (i3c.00o.cxx)) (260.000.000) 8573 32Ó4 (111.449.000) (107.432.000; • .5C0.0Û0 (105.500.000; (425.5OO.OOO) 7938 7513 (131.374.000) (124.340.000) 35.652.600 (339.847.4C0) 7350 6330 26.205.000 24.351.000 64.221.150 (325.626.250) Ó806 6209 43.709.000 39.875.000 69.924.540 0W5.7O1.71O) 6302 5645 44.067.000 39.473.000 67.476.240 (188.225.470) 5835 5132 39.372.000 34.629.000 62.043.24O (126.822.230) 5403 4665 33,522.000 28.943.000 61.076.140 ( 65.106.090) 5002 4241 30.550.000 25.902.000 55.321.840 ( 9.784.250) 4632 3855 25.625.000 21.327.000 49.534.040 39.749.790 4289 3505 21.245.000 17.362.000 45.216.S40 3971 3186 17.956.000 14.406.000 40.774.340 3677 2397 14.993.000 11.813.000 37.ilO. 540 3405 2633 12.875.000 9.956.000 36.822.240 3152 2394 11.606.000 8.815.000 36.822.240 2919 2176 10.784.000 '8.012.000 36.822.240 2703 1978 9.953.000 7.283.000 36.822.240 2502 1799 •.213.000 6.624.000 36.822.240 2317 1635 8.532.000 6.020.000 36.822.240 2145 1436 7.898.000 5.472.000 36.822.240 1987 1351 7.317.000 4.975.000 36.322.240 1339 1223 6.772.000 4.521.000 36.322. 24C 1703 1117 6.271.000 4fH3|OW : .500.C0Ü 24.975.000 ( 26.043.000)

Flujo da Aeuaulado i*stos ds Fondo« Flujo d* Factor da Valor Pr«s«nt« lanca d« Uao i« to Fondos Talor Praooat« ds Flujo d« Fondos Ì

,.í tfcttJMi rí P/13 ì ì: IMIDG !• •«ft lì July 20, lí72 1-193* 07 3101 [• TTvr H !i i!

TABU *-r • MOML XXX - UHM Of PUUKIAL APP1AX1AL 'il 1. Internal tat« of Ratura: 9.01 2. Payback Parlo« I 1! Si I » Oa lauity Capital £1 9 1/2 yaara fra« at art af coaatractlaa 6 1/2 yaara freai at art af oparatloa

ili 3. taturn oa Invaataaat a. Oa Total Capital

II! Aaaata lì 7i.U7.W9 - 17.91 MI US, 300,000 a. Oa Iaj«lty Capital IH liAihm - **.« 170,200,000

4. •raak-lvaa Paiat il! affvaalaacaly 141 a€ araavatlaa I I

• R-193A/07/31OI - Page Q/l

DEVELOPMENT PROCeUHS

Th« Contract requeits two suggested development programi - one

to 1975, and a second to 1985.

J Between the preeent and 1975 little can be done from the point of

view of increasing production of paper« from bagasse In Tucuman - at

least not within th« scop« of this study. Th« two existing paper manu-

1 facturing plants operated by Ingenio Leales and Celulosa Argentina are

of very small capacity and the possibilities of expanding either of 111 them to th« production ranges being considered are remote. It is true « I! that usually It is last costly to expand an existing facility than to build a new one but this applies within a limited range. It is •ii considered that contemplation of Increasing capacity of the existing mills Into a range of 5-8 times present production (Model I) would be

lmpract leal. il! It ha* already bean «stablished that the most optimistic date i I for a completely new project would be 1977 and that even this timing I •i can be achieved only by prompt and decisive action. Thus the most

constructiva immediate program would be to initiate at once the i! various proce urea necessary for implementation of a new project (See Section R). 'i: Financial analysis indicate« that the Model II and Model III alternatives are about equally attractive and that, from this point

of view, Modal I appaerà unattractive. If Model II has once been R-193A/07/31O1 - Pag« Q/2

constructed tha expanalon to include production of corrugating ma di um

(Modal 1), however, presents a much iaproved financial proapect.

If the «vailabllity of capital may be Ignored the logical

•election would be to proceed aa rapidly as poialble with implementation

of Model III which, It Is aetiaated, could be In full production by

1979. Since even this large mill would consums leaa than one half

I1 of the bagaaaa available and the mar kit analysis ah ova that by 1982

(conservatively) demand will exist for a similar quantity of the aame Ili papara, a duplicate projact could conceivably be planned for implementation before 1985.

It would taca unlikely that auch large amounts of capital could Ili•i ba made available within auch a ehort period. An alternative progresa would ba to proceed with Modal II aa the >¡i initial atep and then, uaing the profita generated, to add the production of corrugating madium at a later time. The indications

ara that the addition could be totally financed in this way bsfore

1984, thus asking the expansion very ranuneret iva.

A definita feaaibllity study for either or both of these possible

alternatives would indicata definitely which one would yield optimum

benefits both nationally and provine lai ly. i

H!;i in I-193A/07/3101 Page R/l .TANT*

R. IMPLEMENTATION OF PROJECTS

R.1 Central

Inasmuch at prefeasibility étudies arc often considerad aa

interesting economic exerciaes and are frequently ahelved or

long postponed, even if very viable projecta are indicated,

bee ausa of a lack of underatandlng aa to how projects can be or

should be implemented, and also because such projects aa do

proceed on the baaia of prefeasibility studies often take yeara

to implement or develop poorly, thla section on the implementation

of projects has been prepared as a general guide.

Once a decision is reached on the basla of this prefeasibility

study to proceed with one or more of the projects propoeed,

several further atepe are required. In generally chronological

order these ere:

- Formation of a cono any or government agency that vili carry

out and opérete the project.

- Selection of conaultlng engineers.

- Preparation of a definitive feasibility study suitable for

financing the project.

- Financing arrangements.

- Selection of the method of contracting for the supply of the

plant.

- Construction of the plant. R-193A/07/3101 - Page R/2 •I • CMMKTAMTI

- Arrangement for the training of operating and management

peraonnel.

- Arrangeaient for start-up and management contracts.

Dependent on the method and organization selected for

implementation some of these various ateps may be combined, some

may be eliminated, and the sequence may vary, but, In general,

all must receive consideration for effective and efficient

planning. Training and management contracts have been treated i!: under Section C but the other steps also merit diacusslon in some detail. •i! 1.2 f9rmtU?n °f Capimi II! Unless administration of the project can be assumed by an existing private company or government agency, the first step •i is the formation of an organisation that will carry out the project end be the eventual owner and operator of the proposed

plant. Initially, such a company or agency would require a

11: very smell staff, but personnel involved should have full power 'i' of decision concerning all aspects of the project and should be provided with sufficient funds to proceed with further steps.

Later on, upon completion of the definitive feasibility study, i! the staff would be increased and, at that atage, should consist of at leaat a Preaident or Managing Director, a General Manager, 'í an Engin» er with technical experience of the process involved, an Office Manager, an Accountant, aa well as the necessary II R-193A/07/3101 - Page R/3

clerical help. This itaff »hould be augmented as work proceeds I until, at the time of mill start-up, the entire management staff is available. ¡ j If the project is taken up by an existing company or agency, I. it is possible to proceed through the phases of selection of

consultant and the definitive feasibility study using company or

agency personnel, but at least one or two senior people should be

1 assigned specifically to the project. Once the definitive r feasibility study is completed, a subsidiary company or division 11 within the organisation should be set up with a staff having full power of decision concerning all aspects of the project and i i provided with sufficient funds to proceed with further steps. The I initial staff of this subsidiary company or division would be

similar to that mentioned above and would be augmented in the

same manner as the work proceeds.

Unless a definite entity with funds and powers of decision

11¡ is set up it is very difficult for the necessary work to proceed i efficiently thus this step assumes primary importance. i R.3 Selection of Consultants i If the project is taken up by an existing firm or agency |! which has a staff of experienced technical personnel capable of

conducting feasibility studies, the selection of consultants !! may be unnecessary. In most cases, however, to obtain an accurate

and definitive feasibility f.tudy suitable for financing negotiations,

I !l •

1.0 I: i e l||> i 5 » - ,:t '„- il

20 I.I 18 1.25 1.4 R-193A/07/31O1 - P.g. R/¿ M. COMMUTANTI

the engagement of an independent and experienced consulting

firm will be enential. If the administrative organization

which haa been act up has experienced auperviaory personnel

the formation of a subsidiary or division specifically for i! execution of the project may sometimes be omitted but, even under these circumstances it Is preferable to first form a i! subsidiary or division to adminieter the project to ensure that highest priority and full attention will be given li! continuously to the planned implementation. The consultants may be engaged for the feasibility study

Ü alone, or for the partial or total implementation of the project II as well. The consultants muet be experienced in the design of

the type of plant proposed and, if for technological reasons

li the consulting firm must be a foreign firm, the foreign

consultants should be obliged to associate themselves with a !! local engineering firm. Thi« will not only permit savings in

foreign exchange, but will also result In a plant that is

better adaptad to local conditions.

The preparation of feasibility studies by equipment

suppliers la not racommended, «ven though such servie«« may be

offered "fr«« of charge". Th« suppliers' prime interest is the

sale of equipment and any such "free" study will naturally favour

th« equipment and processes marketed by the supplier, sometimes

with disregard for suitability and/or «conomy. Sine« the equipment

• R-19ÎA/07/3101 - Pagi R/5 It. COMMTAMTt

supplier ujualiy is not responsible for civil and structural work,

•msce 1 laneou» local cotti, and product manufacturing costs, these

may be estimated on the low side to make the project appear more

viable, thereby increasing the possibility of the sale of equip-

ment. Such engineering is not, and cannot be, at no cost, It is

eventually Included in equipment pricing. Although it may be

argued that nothing is lost by obtaining such a "free" study (since

there is usually no obligation to purchase the suppliers' equip- • U ment), the information obtained is of little or no value as a a I basis for financing, especially as regards civil and local costs. t> In fact, most financial institutions will not provide financing I on the basis of an equipment supplier's study. About the only exception is financing by supplier's credits, which would apply

only to the equipment furnished by the supplier. i ¡i Although nothing la lost through obtaining a "free" feasibility study from equipment suppliers, these studies are of I 11 limited value and generally result in a loas of time until a

study acceptable to financial Institutions is prepared. I The best assurance of obtaining a feaaibility study that is reliable and accept ab1« to financial Institutions is for the I! study to be prepared Independently either by the company's own staff (If they have experienced technical people available) or !! by an Independent consulting engineering firm. !l R-193A/07/3101 - Page t/6 II • COMMUANT*

R.** Preparation of a Det'.nlttve feasibility Study

A definitiv« feasibility atudy is prepared with sufficient I acciracy to allow negotiation of financing for a specific project. I I Some of the work of the prefeaslblllty atudy will be repeated, I but with a much higher degree of accuracy in order to arrive at market figures, raw material availability and coat, capital costs

and manufacturing coats which can be thoroughly aubstantiated. 'S The work for such a study would Include: I ¡! - thorough market survey including, if possible, advance commit - si ments by potential customers,

- thorough raw material aurvey covering availability, quantities 11¡ and qualities and delivered coat at mill site with, if possible, advance commitments from potential suppliera,

- thorough analyels of the plant site, Including preliminary

I i! ground aurveya and soil testa to allow accurate estimates of

civil and structural engineering costa, and thorough hydro-

I Í graphic surveys to establish the quantities and qualities and

temperatures of water available,

¡! • laboratory analysas of raw materials and pulping tests,

- an analysis establisning the type and size of project, I! • complete description of the proposed project, - preparation of detallad flowahaats with material balances,

- complet« preliminary plant layouts showing equipment locations

and building dimensions, I !l R-niA/07/UOl - Pag« R/7 I.CMNMTAHTt

r «pical «•ost estimates oí a high degree of a,:_ra y to all iw

financial bieget« to be finalized. (Tbl* would i"vcKe ailing

preliminary quotation» on all major equipment and obtaining

unit coata for tvll and structural work), i! preparation of very accurate manufacturing cost estimates, I - very complete economir analysis, including disc-jnted : ash I flow, rate of return, break-even analysis, sensitivity analysis, eie.

I If Although change» will inevitably occur at any project proceeds, I ! a definitive feasibility atudy is required as the sound baals on t: which to proceed. Such a atudy would coat in the order of

I ! $200,000.00. However, many portion« of auch a feaaibillty study,

s-ch as the site survey, «oil test«, water analyses, flowsheets,

Mi plane layout, equipment list« and «icing etc., can be uacd in

subsequent «tage« of the development of the project «me« they 11: actually constitute a portion of the preliminary engineering Subsequent engineering cost« would accordingly be reduced to I ¡i sosM extent. t. S Financin« the Frolact

Once the feaaibillty study has been completed, the i !! next step Is co arrange for the financing of the project. ¡I In mosc casas, cher« are two type« of capital required to

finance a project - equity capital and loan capital. l !l • R 193A/07/3101 • Page R/8 (.CMMMTAHT1

Equity capital is the pott ion ot Í mis pledged by the

parti.ipant» ;:f tv,e company desiring to h^ild the proje t

Equity capital is also known as sha-

are usually iM.fd to raise the inoney -equired írom the

participants OT owners. Loan capital is borroved or. the

basis of project viability and ar'angement nv9i be made I to cover interest charges and repayment of the principal. In a few cases, projects are implemented with equity I I capital alone, but because of the large amounr of capital required for p^lp and paper projects, it is more common

to use loan capital in addition to equity capital. Usually 11 note landing agencies require that equity capital should aaount to at least 301 and preferably 40% of the total • S capital required. The range of debt/equity ratio may be M! increased or decreased according to indications of the 11: economic analysis of the project in question and, In particular, the degree of risk (economical, political, ( ü laarket) involved. Loan capital may be obtained in the following forma:

- untied or direct loans,

|! - debentures,

* buyer'• crédite,

- aeller'e eredita i !l leffg* Mi R-193A/07/3101 - Page R/9 II.CONSIftTAJfTt

The loan» must be rcpatd over a period of years and

Interest must be paid on the borrowed capital. Terms and

Interest rates vary greatly and depend on the methods of

contracting and financing, and the risk factor« related

to the projact.

Interest payment« begin from the time the money is

borroved. As the construction period may take several

years this means that additional capital has to be provided I; to pay for Interest during construction. (In the case of package deals and turnkey contracts, the interest payments

li| due during the construction period are sometimes Included ill In the contract price). Repayment of the principal usually begins only after completion of the projact or after 'li commissioning of the plant. 'Í Many projucts are financed by using two or more ni categories of credits mixed in the manner that best suitu the particular circumstances. Por instance, assuming a

project where 50% of the total capital cost will be spent 1 I locally and 50% will be Imported, and with 25% In the form ! of equity, the following breakdown might be considered: Total capital cost 100% r Iqulty 25%

Seller's credit 45%

Seller's credit local costs 7% ili Direct loan 28% R-193A/O7/3101 - P«ge R/10 ITAMTt

Not«: Total .^pital it 105% «a 5X repreaenta lnteraat on

threa loans during th« construction period.

Slnca th« form of fInane 1: j chosen may affect contracting,

the advantages and limit at lone of th« different financing

methods are discussed In the following paragraphs.

(b) Untlad or Direct Loans

Untied or direct loans are available from banks, or

international lending agencias auch aa I.F.C. or the I.A.D.B.

Such loans are "untied" because they are not subject to the

aupply of equipment, materiale, or servlcea from any specific

country or for any particular application. Interest ratea

are th« prevailing comercial rates. The period for repay-

ment of the loan is alao usually that normally obtainable,

though In som« cases longer taras «ay be available.

Under cartaln circumstances untied loans are available

as wall through various national aid programs at very low

interest ratas and vary long parlod for repayment. Such

untied aid loans ar« usually administered by an international

t commission or an International landing agency such aa I.F.C. Ï I 9-, or the I.A.D.I. In most casas certain specific criteria must ba mat to qualify for auch aid loana.

Untlad loans hava the advantage of allowing the borrowed

money to ba uaad for any portions of tha project Including R -193A/07/3101 - Page R/ll II.CWMMTAMn

purchase of equipment, materials, and services, < onerai tlng

for buildings and civil works, or payment of lo:al oses

Alto auch funda permit the free choice of suppliers so that

equipment, materials, and services may be purchased from

any source In the world on an Internationally competitive t II basis. •g

A thorough feasibility study by a reputable Independent

consulting engineering firm is essential for obtaining »ach i'I !E loans unless the funds are requested by a company experienced In the particular field and the feasibility study haa been M prepared by company personnel. Ill (c) Debentures Debentures are In effect e mortgage on the company

being formed. They may be taken up by banks, trusts, M! insurance companies or private subscription but they confer no ownership rights upon the subscribers. Debentures are a

• il common method of obtaining loan capital in developed western

nations. Loans obtained in this way are almost identical

to untied or direct loans in application but they usually

have long repayment term«.

(d) Buver'i Credits

Certain countries will offer a "line of credit" to

!! other countries on a government-to-government basis. These

funds are usually administered by the local central bank or R-L93A/07/3101 - Page H/12 11. COMMUTANTI

national development bank, and interest rate« a-e subject

to a amali additional charge making them higher thar in

(b) or (c). Normally the borrower also has to meet certain

specific criteria to qualify for such loans. Il Funds obtained tn this manner are, in effect, a form of buyer's credits and can be used for any acceptable I I projects but expenditures are restricted to the purchase of a major portion of the equipment, material, and aervices I Ir from the donor country. I ! Many countries also have "export" credits available K which constitute in effect, a line of credit for a specific I Í project and are usually administered by a government agency of the country from which the credit is available. The

•li Export Development Corporation of Canada is a typical example. 1 II Interest rates usually conform to commercial rates but, because such eredita are to promote exports from the countries i i ! making them available, the terma of repayment may be somewhat

I ! better than untied loans (except aid loans) and the time I for repayment longer.

Buyer's credits are generally limited to the purchase

|! of equipment, materials, and services from the country

providing the credit although limited amounts may be made

available for local costs (usually e minor percentage of the

goods and services supplied). The number of suppliers is i !l R-193A/07/3101 - Page R/L3 •I < COMMUTANTI

not restricted but the agency providing the credit normally

wishes to deal with only one "exporter".

The employment of a consulting engineering firm to

perform the functions of the exporter haa diatinct advantages li in that the consultante would be in a position to purchase I il in accordance with standards of optimum suitability and best price and delivery based on competitive bids from any

I qualified supplier (piecemeal). I si! Since with buyer's credits, the suppliers are paid directly by the lending agency in accordance with normal

I i progress payment schedules and other commercial terms, i refinancing charges are avoided and consequently costs are kept to minimum, particularly for piecemeal purchasing 'ii based on competitive bidding. As with untied loans and seller's credits, project purchasing may also be done on a

"package deal" or "turnkey" basis if desired but properly

• i: supervised piecemeal buying can achieve substantial l;i savings. I I The chief disadvantages are that buyer's credits are for the most part restricted to purchases within the donor l i! nation and little or no funds can be used to cover local li! coats. The first of these is not usually a serious draw- back In any industrialised country granting buyer's credits. I The second is quite often covered by loan guarantees to i!i »-193A/07/3101 - Page R/K i.comwTANn

banks of the donor nation which provide funds for local

work. I (e) Sallar»• Credits Sallar'a (or supplier'•) cradlts ara provided by suppliers

of equipment and materials and may be provided by a «ingle

manufacturer or a consortium. Because of the financing

complications that would occur with piecemeal purchasing (due

to the large number of suppliers and contractors that would I be Involved), seller's credits are almost always used only I for purchasing on a package deal or turnkey basis. Sailer'a credits are applicable only to the equipment, I materials, and services supplied by the package deal or turn- key contractor, and are thua much mora restrictive than any

of the types of loan previoualy discussed. Many of the

¡I advantages of piecemeal purchasing are loat. Seller'a credits I I like buyer's credits are limited to the supply of equipment,

materiale, and services from the country from which the

capital is obtained, and further restricted in most cases

to products of specific suppliers. A portion of local costs

can usually be covered, but If «11 costs must be covered as

in the case of a turnkey project, the contractor must make

special arrangements.

!l R-193A/07/3101 - Pag« R/15 • • COMMUTANTI

Seller's credit» often appear to have low interest

rata* but, thle la uaually maraly optical. In order to

b« abl« to provida credit, the contractor for a package

or turnkey project mu»t firet obtain inaurane» coverage Il from hia national export Inaurance agency, auch inaurance I :¡ coverà default in payment» to the contractor to the extent of 80 to 831. With thie inaurance coverage piua the

contractor'» guarantee for the 15 to 201 balance, the il! contracting supplier can obtain Ioana from commercial banks to provide the capital required.

I l! The financial charges for seller's credits are i i appreciably higher than for direct Ioana or buyer'a credits. If they appear low, It Is becauee a portion of ¡i the Inherent additional expenses has been diacounted forward i í! and added into the price of the package deal. Seller'a eredita are the most expensive form of financing a project

I IS but, on the other hand, are usually easily and quickly I! 11 arranged.

(a) SlfilXla,

In previous ••étions mention ha* been mad« of "piece-

meal purchasing", the "package d««l" and "turnkey contract»"

which are standard méthode of procuring accessary equipment,

materials, and services for execution of a project. Aa these i !l # lì R-193A/07/3101 - Page R/16 »1 . COMMTAWTl

are to a large extant related to the type of financing

which can be obtained and can have substantial effect I on the efficiency and coit of lap'«ment at ion they are I i discussed at eoa« length ir. the following, paragraphe. •I 1 Unrestricted piecemeal purchasing Is possible only 'i with financing through untied or direct loans, or funds raised from the sale of debentures. Buyer's credits will I also perait a degree of piecemeal purchasing but purchases a are generally limited to the nation extending tha credit

I E unless the particular ltaa or service is unobtainable In I i that nation. I In the case of piecemeal purchasing the equipment îi and materials are purchased individually from a number of supplier« on a competitive basis and contracts for

foundation work, construction of buildings, mechanical and

11: electrical installation, and erection work are let on the II! same basis. In order to purchase in this manner a govern- i i ment agency or a company usually muat engage the services of a consulting engineering fira to carry out the process li! design and the layout of the) plant, to select and sise the type of equipattnt to be used, to prepare specifications so lî that the various item« of equipment can be purchased item

by item fro« different suppliers, and to carry out the I !l m R-i93A/07/3iOi Pagt H/1/ Il . COMMUTANT*

complttt detallad dattgn of tha plan' «o that contracta

can b* lat for ita construction. In addition, the

consulting anginaar would aupar viae tha conat ruction and

carry out the project management, purchaaing, expediting,

acheduling and coat control, if the client cannot or does

not vlah to perform the a« functions.

Piecemeal purchaaing haa the primary advantage that

the beat and aoet aultable equipment can be purchaaed at

the lowest poaaible prie«. Sine« the conaultlng engineer

can work directly In the lntereet of hia client and can

be completely impartial in the ««lection of procesa, equip-

ment, and deaign alternatlvea, this flexibility alao ensures

the most efficient and economic design of the mill with

consequent savings In both capital and operating coata.

Another advantage la that a project can be completed

more rapidly ualng piece««al purchasing with detallad

design and coordination by an engineering firm (aa opposed

to a package deal or a turnkey contract). Tim« savings In

excess of one jamt may be achieved. For example, process

design work and equipment purchaaing can proc««d almost

simultaneously, and construction can begin before completion

of all structural design datai la. M. COMMUTANTI

The chief disadvantage of thlt system Is that there is

no precise fixed price for the complete plant and financing

must be arranged on the basis of accurate estimates by the

consulting engineer.

In industrially advanced nations, piecemeal purchasing

with detailed design by a consulting engineer is the method

most commonly used for pulp and psper projects because it

assures the lowest cost and the best and most suitable

equipment for the project.

The cost of engineering In the detail necessary to

permit piecemeal purchasing depends on the scope of the work

end the sise and complexity of the project. For the average

pulp and paper project process design, specifications,

detailed piping, mechanical, electrical and structural

design, and supervision of construction would cost approxi-

mately 6 to 7-1/2% of direct capital costs.

If purchasing, expediting, cost control, and project

management are also included engineering expense would be

In the order of 9 to 101.

(e) »ackaee Paal or Turnkey Furch as Ins

In the case of a package deal, a contractor, an equipment

supplier, or a consortium of equipment suppliers, furnishes

• "package" usually consisting of all equipment, for the

proposed project and all engineering services, ss well as R-rn\/^7/3l01 - Page R/19

specialized crut i";i .< ** i • t ance foi r h«* i. -.< .i l lar to > of

r he equipment The purcbrtitr nrov'.iln the

and all local costs (except working capital) are included

I In the total price. Turnkey Is not a* consnon as the package

I ÜIt deal since local costs cannot usually be financed by buyer's or seller's credits and special arrangements must be made • to cover such expense. I ¡I Both package deal and turnkey type contracts may be I financed In any of the ways which have been discussed but they are most commonly associated with financing through I !l buyer's or seller's credits. If untied loan or debenture i !! ft . ••.' ar-. .-. i-al i ibi« a client will usually favour piscsswal I! purchasi- y .rílese other factors make package or turnkey «ora 1 SUltti > , ' iI Tha chief advantage of the package deal or turnkey contract is that tha citant deals with only ona party who l! asaus»s full responsibility for tha whole project. Also coats are aore precisely defined since, for the turnkey

arranges»nt tha total price is fixed, and for the package 1 Ï deal tha foreign exchange portion can be fixed. In both K-lwiA/uz/jlui - Pag« */¿Q

c as* ment art isially TI ad* In three to f i v* install-

ment a, frequently It eluding Interest during >. or -t " c t Í on,

ao that little work ia involved in processi -g payments.

Tha two principal faaturaa • aealgnment of raaponalblllty

for th« ant ir» project, and fixed price - have »powerful

appeal »specially : •-. governments, state companie», and

private firma with limited technical resources a« only une

deci »Ion has t o ba made, th« »election of the package deal

or turnkey contractor. Th« purchaser aaeuaea a mlnlatuai of

raaponalblllty and require» only a email staff to adwlnUter

the Implementation of the project.

Offsetting the a« advantages ar« factora which can caua«

package or turnkey arrangeawnta to b« unattractive. Tha

»oat algnlf leant of the »a ar«:

- Increased capital costs

- Increased t law for impleeentat ton

- Unsuitable équipaient or «ejulpeent layout

Th« coat 'òf detailed engineering for accurata pricing

would b« prohibitlv« ao th« contractor auet determine prie«

frosi preliminary engineering only. For protection, there-

for«, contingency provision amist b« «aspi«. Similarly, since

coaplet'on tie* and performance penalty clauaes are uaually

Included in euch contracta, protection oust also b« included m to cover any delays In delivery, construction, or achievement R 19ÎA/0//3101 - Page R/21

of guaranteed performance which might occur.

The normal ai rangement of payment in a lelartvely

I •mall number of in«talIment», and generally unrelated I 1 to the rate of expenditure, nee cas tt »t et an additional I allowance for refinancing of aube ont raitore and euppllera. I The coat» of auch refinancing can be algnlflcant and, of I courèe, muet be Included In pricing. In many curt too a factor ia applied 'o compeneate •I I If for th« coat of preparation of unaucceaaful prevloua blda 11 for other projecta. Typically, the coat of auch bid preparation wight be In the order of $150,000 to $250,000 III which ia too much to abaorb if it can be recovered. Relative to the project in hand theae are ail

unproductive coat a but they are almoat alwaya Included

in pricing for package deal or turnkey projecta. Depending

on the extent to which they are applied in the price i I! estimating, overall corta can range fron 20 to 351 more i !i than for piecemeal purchasing with independent engineering. I The time required for completion of a project le an Important factor to be considered in both the financing i: and contracting phaaaa. Delay in the start-up of a new i I! enterprise inevitably results In loss of profits which ;i •lght otherwise have been generated, thus, once the decision

to proceed has been made, time saved la equivalent to money

1 i ¡i earnad. R-193A/07/31O1 - Page */22 traam

Design by consulting engineers and piecemeal

contracting again show advantage In chi• aaptct. Whan

policy daclaiona h ava been mad« and financing hat been

arrangad the consulting engineer may ba engaged to begin

detallad design work Immediately and, under normal circum- ! stances, construcción can begin about aix months after

approval to proceed has been confirmed. From this point,

I depending on the slss and complexity of the project, I I completion will take 2 to 2-1/2 years, i.e. a tocal of 2-1/2 I to 3 years elapsed time will see the beginning of the operation.

For the package deal or turnkey arrangement, on the I !! I other hand, relatively complete specifications must first be drawn up Co permit fixed prices to be quoted with any I degree of accuracy. This work will normally take four to !! I five months and, adding three to four months for preparation of bids and sona additional time for analysis of the bids f •ii received and contract negotiations, it is possible that a i year or more can elapse between the time of decision to proceed and the beginning of detailed design. Proa this

point the time required would be essentially the same as

for piaceaaeal purchasing with consultants, i.e., 2 to 2-1/2 1 years. i I!l K-l-JjA/07/jJUl Pig« K/¿J

Some economy in time can be achieved in package and

turnkey contratta by preparation of specifications and

I negotiation with potential contractors concurrently with I I arrangement • fur financing, but usually, implementation I of the project by package deal or turnkey contract will Ì >\ consume an additional year, 1 Plant layout and procesa deilgn, being planned around equipment and processes in which the contractor has Interests,

1 It may be deficient du« to undercapaclty, overcapacity, or 1 1! aven isiproper applications. This is natural since the package deal or turnkey supplier will wish to incorporate as

much as possible of his own «achines and process ay steal, 1. but this can easily lead to basic design defects with ! consequent production problème. 1 t Efficiency In operation end maintenance, in particular i' can be adversely affected by Inadequate planning and 1 « unsuitable equipment selection and/or layout. The contractor

1 \ has no continuing responsibility for operating and maintenance

costs and consequsntly will devote little engineering time

to optimising these Important aspects. Since a fixed price

Is Involved the major part of engineering effort Is usually

directed towards putting together a plant which will meet

production and quality specifications but with a close aye Ml on the quoted price in order to achieve maximum profit itom i ¡i the contract. R-193A/07/3101 - Pag« R/24

extracting through « consortium of suppliers (as

opposed 'i' a tingla supplier) can increase t^e probability

I of operating or maintenance problems since each consortium

i metaber will wish to Incorporate as much as possible of his ,1 own machinery, equipment, and processes. Thi* can result 1 In non-uniformity or lack of standardization In the many 'i minor Items such as pumps, motors, couplings, agitators, • valvas, Instrumentation, etc. etc. which are common to most • It of the process areas. The resultant large spare parts 11 Inventories and complicated maintenance procedures contribute *: to excessive repair and maintenance costs. i il t.7 Ç9BtWla°ni Suaaaarlslr.g the content of «hat has been stated in this • s chapter, the following conclusions may be drawn: M! (a) For efficient and successful imp lassant at ion of any project M: there is a well-defined procedura which, if followed, will - •• yield best results. The listed steps must-all be. considera - ' i! in the planning and organisation must be arranged accordingly. i (•) A controlling agency or cosspany must be formed to maintain

coordination and administer the work. Personnel or committees

|! must be given full powers of decision and access to adequate M! fund«. i li R-l'y 1A/CV3101 - P*K«- «/-' II • COmWTAMTI

(o limi«- ai , <. ompiny wlirh is formed n no: lixely t- havt

:- if f ir : t-nt "-an power and technl

r.ins.:lilng engineers are usually ergaged. I (c) The moat important basic step ia the definitive feasibility

study. Both from the point of view of val.dtty and arrant;.

ment of financing, such studies ar«- performed best by

Independent consultants

(e) Financing may be arranged through a number oí generally

standard procedures. Each method of financing has its

advantages and diaadvant agei and selection must be based on

the requirements and circumstances relevant to any spedii,

project. Untied loans or debenture funds, however, pertr.it

maximum flexibility with consequent savings in capital ana

t ime.

(f) Design and piecemeal purchasing by experienced engineer i'>n

consultant will yield best results. Package deal «T t< »

key contract« should be considered only when financing

arrangements or other circumstances leave no alt errat i ve. •