Chile’s forest products giant Arauco has shelved its plan to build a new 500,000m3/year MDF plant in Paillaco, Chile, due to escalating costs and the ill effects of the subprime mortgage crisis hitting the US construction sector.
The panel plant, which won approval from the Chilean environmental agency Corema at the end of May, was also to include 150,000m3/year melamine lamination line and an MDF mouldings unit. The complex, with biomass electricity cogeneration plant and resin production, was due for start-up by 2009-2010.
Arauco directors decided to postpone the project, set to involve an investment of well over US$200m, after it became clear costs would rise by 20%, or more than US$40m. The highest costs Arauco faced were for buying and shipping machinery from Europe.