If successful, the $3.3bn pulp mill that Swedish-Paraguayan joint venture Paracel is developing will enter the history books as Paraguay’s biggest ever private investment. Paracel CEO Nils Grafström, who has more than 30 years of experience in the cellulose industry, tells fDi why the country offers all the conditions for such an endeavour to be successful.
Q: Why did you choose Paraguay?
A: We studied the country carefully, with lenders also looking at it into detail, and we came to the conclusion that the country offers a good business environment. We don’t see a particularly high political risk, at least not higher than in many other countries that produce pulp today. The country is stable, there are good rule of law institutions, freedom of speech and press, all basic ingredients to do business.
Q: Why a pulp mill in Paraguay, the first of its kind in the country?
A: The country has all that is needed for a greenfield pulp mill to be successful. Strong and enforceable environmental laws, because the lenders won’t accept anything else. We found them in Paraguay; a lot of available land, good soil and rainfall throughout the year. On top of that, it needs the logistics in place to export the final products. Interestingly for a landlocked country, Paraguay has big rivers, and we will use the Paraguay/Paraná river to export the products. Besides, the mill needs electricity ... and a pool of labour in proximity, which is provided by the city of Concepción. Paraguay lacks trained people to work at the mill, but part of the project is to train the workforce. Last, the government also provided its support for the project. All this made it possible.
Read more about the Paracel project in Paraguay at fDiIngelligence.com
This article first appeared in the December 2022/January 2023 print edition of fDi Intelligence. View a digital edition of the magazine here.