Paper Excellence Promises Thousands of Jobs in MS After Court Victory for Control of Eldorado Pulp

Court Decision Reaffirms That Company Must Completely Manage The Pulp And Paper Mill In The City Of Três Lagoas (MS)

The First Reserved Chamber of Business Law of the São Paulo Court of Justice, in a decision by Judge José Benedito Franco de Godoi, resolved that the company Paper Excellence will have permission to fully control the Eldorado Celulose mill, located in the municipality of Três Lagoas in Mato Grosso do Sul.

This decision allows for the immediate transfer of the shares held by J&F, a twin of Paper Excellence. Thus, Paper, which is one of the largest producers of pulp and paper in the world, will hold 100% of the capital of the Eldorado mill, which is a leader in pulp production in the country. Currently, Paper’s shares amount to 49.41%.

The judicial process involving the purchase of the Eldorado mill in Mato Grosso has been dragging through the courts for four years. Between 2018 and 2021, the International Chamber of Commerce (ICC) understood that there was good faith from Paper Excellence throughout the buying and selling negotiation and then unanimously decided (3 votes to 0) on the company’s right to assume management of the Brazilian pulp producer.

J&F questioned the outcome of the arbitration in court, claiming that the ruling exceeded the limits of the arbitration agreement, that the company had been spied on by its own partner through a cyber invasion, among other undisclosed conflicts of interest by the arbitrators. In July of this year, Judge Renata Maciel, from the 2nd Business and Arbitration Conflicts Court, had already considered the annulment action initiated by J&F unfounded and upheld the arbitration decision in favor of Paper Excellence.

The initial agreement for the Eldorado Celulose mill, made in September 2017, was valued at R$ 15 billion. However, it was not concluded due to disagreements between brothers Wesley and Joesley Batista of J&F, and Asian businessman Jackson Widjaja, owner of Paper Excellence. This is already considered the largest litigation in Brazil at the moment.

Paper’s Objective Is To Expand Eldorado

With this latest judicial victory, Paper Excellence in Brazil is expected to begin its plans for expanding Eldorado Celulose (Vanguarda 2), with an optimistic outlook for creating new jobs. The company plans an investment of around R$ 10 billion, which will create thousands of jobs in the region.

The construction of this second production line for cellulose in Brazil has been stalled since the beginning of the corporate dispute over Eldorado. Paper Excellence operates in the manufacturing of long and short fiber cellulose, high-yield pulp, and paper.

“Our focus now is to integrate the operational team at Eldorado effectively. We recognize the excellent work that has been done at the company. We have plans for Eldorado’s staff. The certainty is that together we will write a bright future.”

Cláudio Cotrim – CEO of Paper Excellence in Brazil

In July, Paper Excellence closed a deal to acquire all the common shares of the U.S. company Resolute Forest Products, a global leader in the forest products industry. Last year, the company announced the purchase of Domtar, the largest paper merchant for printing and writing in the United States. In 2019, it had incorporated three production units from Canadian company Catalyst Paper, along with a distribution center and a new headquarters.

J&F Will Continue Battling In Court Claiming Corruption

J&F sent a statement to Rádio CBN in Campo Grande (MT), informing that it intends to appeal the latest court decision. “J&F Investimentos will continue to defend its right to annul an arbitration award tainted by espionage, which has already resulted in the indictment of the highest executives of Paper Excellence and their subordinates, as well as the failure of the disclosure duty and signs of corruption. This is a ruling of a precarious nature, and J&F is confident that it will be reviewed,” the statement says.