Arauco Sol

Arauco is one of the world¶s premier forestry enterprises in terms of plantation areas and yields. They have diversified their business lines to minimize the impact of volatility of pulp prices. They are one of  the world¶s lowest cost producers. They can control demand and supply of the market of pulp. The group would prefer to remain a market pulp producer. Pulp is Arauco¶s main industrial activity, generating up to 50% of their revenue. In different product segments they use different aspects of competitive advantage: Pulp Key facts: y

Over

50% of Arauco¶s revenues were generated by pulp sales.

y

They are not affected by seasonality

y

Single

largest producer of unbleached softwood Kraft pulp holding 15.8%

Competitive advantage: y

S ize

y

Largely

y

elationship R elationship

in exports with paper manufacturers

Forests Competitive advantage

y

There being in Chile is a competitive advantage. R adiata adiata pine in Chile had a high yield  per hectare due to quality of soil

y

Bioforest

was the only forestry science and technology research center and feeds

innovations y

They own two thirds of the raw material needed for production

y

Arauco strive to establish long term relationship and made renewable agreements of up to three years

Wood

Products

Competitive advantage

y

R educed

transportation time.

Sawmills

closed to plantation area, cut down on

transportation time

They utilize economies of scale. Pupl production is the core competency of the Arauco, where they have the cost advantage. They need to increase their production capacity.