Chile: A Forest Industry for the 21st Century

A comprehensive profile of the Chilean forest products industry

and the country’s future supply of timber.

By Robert Flynn, 2005

Wood Resources International, LLC

www.woodprices.com
 Chile: A Forest Industry for the 21th Century
The world is increasingly dependent on plantation forests to supply its paper and wood products needs. The Chilean
forest industry is one of the few regions of the world that is almost totally reliant on plantation forests for its wood
fiber supply. In addition, the manufacturing industry is very dependent on international markets because of the
relatively small domestic consumption of forest products. Thus, the development in Chile is a good reflection of the
face of the international forest products industry in the 21st century.

The Chilean Economy

Chile has long been recognized as the outstanding economy and business-friendly location in Latin America. In 2003/
2004, Chile received the highest ranking in Latin America in a number of multi-country evaluations by many interna-
tional organizations, including economic freedom (Heritage Foundation and Wall Street Journal), lack of corruption
(Transparency International), competitiveness (World Economic Forum) , sovereign risk (Euromoney, Moody’s, and
Standard & Poor’s) and business environment (Economist Intelligence Unit).

The Forest Resources Log Prices

Chile is in the midst of a major expansion in radiata Sawlog costs in Chile have been stable and low com-
pine wood supply: Harvests of pruned radiata pine logs pared to many competing regions, such as New Zealand
will more than double between 2004 and 2012. and Brazil.

Chile: Radiata Harvest Forecast to 2010 Conifer Sawlog Prices 1995 - 3q/2004
25
80
Brazil, Chile & New Zealand
+ 42% 70
20
60
US$/m3 (delivered)
million m3

50
15

40
+ 36%
10 30

20

5
10
Source: Wood Resource Quarterly
0
0
5

3q

3q

3q

3q

3q

3q

3q

3q

3q

3q
/9

/9

/9

/9

/9

/0

/0

/0

/0

/0
1q

1q

1q

1q

1q

1q

1q

1q

1q

1q
Pulplogs Sawlogs
2001 2010 Brazil Chile New Zealand

The Pulp Industry Secondary Wood Products Exports

Chile’s pulp industry is poised for another major ex- Total forest products exports broke through the $3 bil-
pansion, with a shift to a much greater production of lion level in 2004. Exports of secondary wood prod-
short fiber pulp. ucts nearly doubled between 1998 and 2003.

5000 Chile: Pulp Production by Fiber Type 1990 - 2010 700 Chile: Secondary Wood Product Exports
4500
600
4000
Other
3500 500 Furniture & Parts
Short Fiber Doors & windows
3000
1000 tonnes

Long Fiber
Million US$

400 Blocks & Blanks

2500
Moulding
2000 300

1500
200
1000

500 100

0
0
90

91

92

93

94

95

96

97

98

99

00

01

02

03

05

10

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
19

19

19

19

19

19

19

19

19

19

20

20

20

20

20

20
 A Comprehensive Analysis of a Fast Growing Industry
In this new extensive profile report, Wood Resources International provides key data and analysis of the
important forest resources and forest industry in Chile. Also discussed in the report are important issues related
to forest products trade and investment opportunities in Chile. Based on numerous trips to Latin America
during the past 15 years, the author provides extensive insights into the current and future forest industry
situation in Chile.

Anybody with an interest in the fast growing forest industry in Chile would benefit from the insights in the study,
including timber investors, wood products producers, importers, distributors, pulp producers/consumers, con-
sultants and industry analysts.

The over 200 + page report includes historical production trends and forecasts for:

• Wood pulp • Lumber

• Plywood • Composite wood panels
• Secondary wood products • Log exports
• Wood chip exports

Chile: A Forest Industry for the 21st Century will discuss all of these important subjects, and more:
• Timber supply trends and harvest forecast to 2020
• Pruned log availability and clearwood supply forecast
• Economic analysis of planting radiata pine, eucalyptus, and other species in Chile
• Sawlog and pulplog price trends
• Timberland ownership
• Forest and forest industry investment opportunities
• Comparative advantages/disadvantages in secondary wood processing
• Development in key export markets
• Transportation issues
• Economic and social issues in Chile
• Major producers and exporters in each industry segment
• Production trends and forecast for all major forest products
About the Author
In 1992, author Robert Flynn coauthored the first English language profile of the modern Chilean forest industry,
“Chile: Forests, Forest Products Businesses, and Opportunities”, published by Miller Freeman. The author has
traveled annually to Chile since 1991, participating in many industry conferences and completing a number of
consulting projects for major Chilean companies. As Director of Consulting Services for Wood Resources
International, Mr. Flynn has experience working in many countries, in analyzing wood supply and demand trends,
industry development, and international wood product trade flows. He is coauthor of the annual publication “The
International Woodchip and Pulplog Trade Review” (now in its 12th edition), as well as two multi-client studies on
the Eucalyptus solid wood industry development and a profile of the global Douglas-fir resource and industry.

About Wood Resources International, LLC

WRI, an internationally recognized forest industry consulting firm established in 1987, has successfully com-
pleted more than 200 consulting assignments in over 35 countries worldwide. In addition to consulting services,
the company publishes two market reports tracking sawlog and pulpwood markets worldwide.
www.woodprices.com
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