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City With Only 8 Thousand Inhabitants Is About to Change Forever! The Pulp Mill, Valued at R$ 28 Billion, Promises to Transform It into an Economic Hub. But Is the Municipality Prepared for the Impacts That This Massive Investment May Bring? Find Out All the Details of This Surprising Story.
Inocência, a quiet town with just over 8,000 residents, located in Mato Grosso do Sul, is about to star in an economic and social revolution that has intrigued experts and sparked curiosity throughout Brazil.
While many small municipalities face challenges to grow, this small spot on the map could become a model of development — or an example of the risks associated with mega investments in underdeveloped regions.
What’s the reason for all this attention? The construction of a gigantic pulp mill, valued at an impressive R$ 28 billion, by the Chilean company Arauco. But what is really at stake for Inocência?
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This text is part of a special report by Click Petróleo e Gás, which recalls the most impactful reports of 2024.
What We Know About the Billion-Dollar Project
The city of Inocência is located 330 km from Campo Grande and is known for its low population density.
Even so, it was chosen by Arauco to host one of the largest pulp mills in the country.
According to the company, earthworks are expected to begin in the second half of 2024, and the construction of the industrial plant will start in 2025.
With a population of only 8,404 inhabitants, the region is expected to face profound changes, both positive and challenging.
The city’s mayor, Antônio Ângelo Garcia dos Santos, known as Toninho da Cofapi, stated that he is committed to ensuring that the municipality benefits from the project without suffering negative impacts.
“Our goal is to avoid overburdening the city’s infrastructure and ensuring that health systems do not collapse,” the mayor said in an interview.
According to him, a municipal legislation has been created that prohibits the construction of infrastructure around the construction site. The solution found was to house temporary workers 40 km from the city.
Economic and Social Impacts: Lessons from the Past
To understand what Inocência can expect, it is important to look at similar experiences. In 2021, the city of Ribas do Rio Pardo, also in Mato Grosso do Sul, received a factory from Suzano, another giant in the pulp sector. The municipality, which had about 21,000 inhabitants at the time, faced a true revolution:
- Population Growth: Ribas do Rio Pardo saw its population jump to 35,000 inhabitants.
- Real Estate Inflation: Rents that cost R$ 700 rose to R$ 2,500.
- Infrastructure: Partnerships with Suzano were necessary to strengthen health, safety, and social assistance.
Despite the challenges, the experienced administration of Ribas do Rio Pardo managed to create solutions that could serve as a model for Inocência.
However, Fabio Muzetti, a professor of architecture and urban planning at PUC Campinas, warns that the situation requires caution.
“The money takes time to arrive, but the pressure on municipal services is immediate. Public policies are essential,” he stated.
Administrative Challenges and Negative Examples
The example of Ribas do Rio Pardo is just one side of the coin. Gustavo Fernandes, a public administration expert from FGV, points out that a sudden abundance of resources does not guarantee prosperity.
He recalls the case of Rio de Janeiro, which, despite receiving R$ 11.3 billion in royalties from pre-salt, continues to face financial crises.
To avoid similar pitfalls, the municipal management of Inocência will need to invest in long-term planning and the implementation of consistent public policies.
The presence of Unimed, promised by Arauco, could be a positive sign of commitment to the community.
The Pulp Industry in Brazil
The pulp sector is one of the most profitable in Brazil and attracts mega investments.
The country currently has 53 pulp companies in operation, with Mato Grosso do Sul being the second largest national exporter.
In 2022 alone, the state shipped 4.46 million tons, representing 18.2% of Brazil’s revenue in the sector.
According to experts, the choice of small municipalities is not random.
The industry requires large areas for eucalyptus plantations, which are easier to find in less densely populated regions.
Expectations and Reflection
The future of Inocência is promising, but also full of challenges.
The city can become a hub of development and quality of life or serve as a cautionary tale about the uncontrolled impacts of large investments.
And you, do you believe Inocência is prepared for this historic challenge? Leave your opinion in the comments!
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