The flames of a fire in the factory of Ence peeked out to the road along the ria of Pontevedra this Wednesday. Despite its spectacular nature, was extinguished in half an hour and the issue was not over. In the same way, the bets failed, the company have also been extinguished –and have been made to reflect– the large producer of pulp from eucalyptus and renewable energy with biomass. Its new strategic plan 2019-2023 points to two directions: to diversify production and reduce costs, but with processes that will be very gradual, amounting to a total investment of 1,200 million euros.
the trump card of The group’s pulp and paper is in the good time living the international market of cellulose. The index for european NBSK, benchmark, has risen 20% this year, with prices per metric ton of pulp, which more than a thousand euros, compared to a cost of production recognized by the company as 325 euros. That’s why their estimates exude optimism: projected that in 2023, with operating income almost double to that product and pass the 245 million today to 400. In energy, the Ebitda will increase from 45 million today to 150. “We’re not going to bet this number to a single letter, and we are not going to invest it all at once. The strategy is to do so gradually. If you come badly given or twisted, we can always slow down or stop,” says Ignacio de Colmenares, vice chairman and ceo.
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Ence has learned that the projects pharaonic are not the best way to face the future. The most important of its history was on the point of giving the fret with the company in 2008, when it launched a factory in Uruguay, with which he contracted a debt of 1.075 million, and that had to settle before the non-viability of the project. A few pimples that have not finished in the mud. Ence has learned that the projects pharaonic are not the best way to face the future. The most important of its history was on the point of giving the fret with the company in 2008, when it launched a factory in Uruguay, with which he contracted a debt of 1.075 million, and that had to settle before the non-viability of the project. A few pimples that have not finished in the mud. With more than 1,000 employees in the present, in 2017, the turnover amounted to 740 million euros, with a net profit of 119 million. Until last October, the sales have been of 619 million and profit of 92 million.
The bulk of the investment will go to improving the production of its plants in Navia (Asturias) and Pontevedra. Also be used between 60 and 115 million to prevent the escape of water vapor and improve the emissions of noise and odor. Ence drag from decades ago allegations by the impact of their factories and this week, after the fire, the Association for the defence of the Ría de Pontevedra called for an end to his activity, “for the danger that it poses to the population living with a polluting factory that destroys economic resources”.
will Begin to produce viscose for the textile and pulp for hygiene products
Market hygiene
“The global demand grows about 1.5 million tons each year, due to the Betsmove increase of the population and a higher consumption of diapers, absorbent… But mostly grows in Asia, where the urban middle classes increase exponentially and where the rural population to get to the city demand diapers, toilet paper or buy packaged food”, explains Colmenares. A demand that China may not provide coverage because there is a deficit in wood raw material that is obtained by the cellulose). “Therefore, it will continue to grow and the supply is stagnant. In addition, in the present, there is only one cellulose factory under construction in Chile that will be operational in mid-2021”.
In the factory in Navia are going to invest 305 billion, between 2019 and 2021, in order to adapt it to the new production of hygienic absorbent; the expansion 80,000 tons of pulp production, in addition to the diversification in the viscose, of a fabric natural from wood which from long ago comes to him eating the ground for cotton, with a consumption level for more than 15 years. Meanwhile, Pontevedra will receive 195 million to expand its capacity over 120,000 tonnes.
Even if they look to be benefited by the pull of the global demand coming from China, for now, their markets will continue to be in Europe. With a production capacity of 1.07 million tons per year, the company cup the 11% share of the european market, which allocates 90% of its production.
For the employer’s association of the pulp and paper sector, “the Spanish industry of cellulose in general, and of Ence, in particular, have a good position in the european context, with a positive outlook, especially in high quality products like the absorbent, tissue or speciality papers (for floors and furniture), with a demand to the upside,” says Carlos Reinoso, director general of Aspapel.
also, the plan of the Spanish has been well received by the analysts of Bankinter, Caixabank, GVC Gaesco-Beka, and more skeptical by the Sabadell. This last diagnosis considered to be very optimistic projections of the prices of cellulose and gives a 50% chance that the production of pulp for hygienic products absorbent is, as it says the company, launched in 2020. According to Iñigo Recio, of GVC Gaesco-Beka, “by 2020 it is likely that prices will even go up to $ 1,100, but it is possible that as of 2022 fall to 900”. A deviation that, to Of Apiaries, do not pose any problem, “even so, our leverage would be controlled and we would continue forward with the plan.” The company ensures that it would maintain a distribution of 50% of profit in dividends following the debt below the operating income throughout the period.
Next to the cellulose, Ence bet on the business of generation of electricity with an investment of up to 615 million euros (biomass, solar thermal and photovoltaic). The construction of a factory of biomass in Huelva and the purchase a year ago of another in Puertollano (Ciudad Real), binds to the recent acquisition, in this same locality, of a thermal property of Iberdrola Renovables by 140 million. Between 2019 and 2023 will launch a new biomass plant in Almeria, with an investment of 125 million. “It is the ideal place to manage the waste that come out of the crops under plastic, and that are now burned.”
Is another way of diversifying the business. “The pulp is cyclical in front of this [energy] that is stable and regulated. With it we can rely on a permanent flow of cash and ironing out the ups and downs of the cellulose”. A business that the company will promote. “It’s a safe bet because [the biomass] does not depend on neither the sun, nor the wind. And when closing the coal fired and nuclear will be needed to support energy. It also has a positive impact on rural areas: it creates jobs, takes care of the mount, increases the population…”, says Colmenares.
