South American Real Estate News

Argentina’s forest industry potentialities and challenges

Post available in: English

According to recent industry estimates, over the next 10 years between 60 and 80 billion dollars will be invested for the development of the forestry industry in South America. Argentina, due to its optimal ecological conditions, is expected to become a major player focusing much of that interest.

Argentina has about 30 million hectares of native forests. There are currently 1.2 million hectares of cultivated forests, mainly pine, eucalyptus, willow and poplar, which are estimated to be expanded to two million hectares by 2019.

According to the vice president of the Asociación Forestal Argentina (AFoA), José Urtubey, “Argentina has the potential to reach an area of 5 million hectares of tree plantations. It is estimated that if these expectations are achieved, the country would, in a period of approximately 10 years, triple its exports exceeding 3 billion dollars at present value.”

The forestry map shows that 70% of the plantations are located in the Provinces of Misiones and Corrientes, with almost 900,000 hectares planted.

After the 2008 financial crisis, which cut timber sales to the U.S., local housing construction became the main breadwinners for companies. The country´s construction growth rates, ranging between 6% and 9% per month so far this year, revived the activity of logging companies and sawmills in Argentina after the crisis that began in 2007, reaching its lowest point in 2009.

According to the head of the House of Wood (Cadamda), now the recovery is given for three types of housing: the construction of high-end homes -such as the ones in the Argentine coast-; provincial housing schemes;  and middle-class homes with wood finishes.

Currently, the forest industry exports are over 1.1 billion dollars; 95% of the industrial production is made from planted forests with pines, poplars, willows and different types of eucalyptus; with a direct and indirect impact of about 500 thousand jobs.

Nevertheless, Argentina still must improve certain logistics aspects and channel investments to the installation of long fiber and short fiber pulp mills, the expansion of existing pulp and paper mills, thermal power plants, panel factories, pellet production, among others.

Contact the Gateway to South America team  to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Uruguay and Chile, providing expert advice on property acquisition and investment tours.

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Post available in: English


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