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Chile Forestry Sector Eyes 30% Timber Production Expansion

Published Saturday, 24th July 2010 01:41 am - © 2010 Dow Jones

SANTIAGO -(Dow Jones)- Chile's forestry industry could increase timber production over 30% in the next fifteen years, as the sector significantly expands its land holdings, Hans Grosse, head of state forestry agency Instituto Forestal, said.

The nation's forestry sector, which produces 8% of the world's wood pulp, currently owns 2.3 million hectares of plantations.

Expansions could include the acquisition of 7.5 million hectares of native forest and the addition of two to three million hectares of new plantations, Grosse told Dow Jones Newswires.

Timber production, which is processed to produce wood boards, plywood and pulp, may increase to 50 million cubic meters by 2025, up from a current harvest of 38 million cubic meters, as a result of the expansions.

Over the longer term, there is the potential to see production of up to 120 million cubic meters of timber, Grosse told Dow Jones Newswires.

Chile's forestry exports, which amounted to $4.2 billion in 2009, could total some $7.3 billion to $9.6 million per year in ten year's time, said Infor, as the state agency is known.

These optimistic forecasts come only months after the industry suffered severe damage at the hands of an 8.8-magnitude earthquake earlier this year.

Pulp and paper producer Empresas CMPC SA (CMPC.SN) and fuel and forestry conglomerate Empresas Copec SA (COPEC.SN) are Chile's largest forestry-related companies.

-By Erin McCarthy, Dow Jones Newswires; 56-2-715-8939;

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