Chilean forest products giant Celulosa Arauco y Constitución SA has made the next move in the consolidation game being played out in Brazil’s wood based panels manufacturing industry.

The pulp to panels group, with MDF, plywood and particleboard production already in Brazil, Argentina and Chile, has now purchased Tafisa Brasil SA, Sonae Group’s beleaguered Brazilian panelboard and flooring maker based in Piên Paraná state, in a deal worth US$227m.

Arauco’s move comes barely a month after two other top Brazilian players, Duratex SA and Satipel Industrial SA announced their planned merger to form the biggest panelmaker in the southern hemisphere with their joint capacity of around 4 million m3/year.

Industry sources suggest that a third consolidation deal is imminent later this year to create the country’s third major producer. They believe the market can sustain up to four big players.

The latest deal will hand Arauco, which already owns the Brazilian producer Placas do Parana SA, additional MDF, MDP (particleboard) and laminate flooring capacity with an overall capacity of some 640,000m3/year. The Piên plant has two MDF lines with 342,000m3/year capacity and a single 270,000m3/year MDP line.

Arauco through Placas do Parana has MDF and MDP capacity in Parana state totalling around 530,000m3/year.

Arauco will pay US$165.2m in cash for the shares of Tafisa Brasil and the rest represents liabilities of the Brazilian company, Arauco said in a note sent to the regulator of the Chilean stock market.