What's so special about this little Brazilian town to receive R$ 25 billion for a cellulose megafactory and have more people working than inhabitants?

What’s so special about this little Brazilian town to receive R$ 25 billion for a cellulose megafactory and have more people working than inhabitants?

Written by Romário Pereira de Carvalho

Published on 10/05/2026 at 09:27

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Fertile soil, favorable climate, abundant water, transport logistics, and expanding forest base explain why Inocência was chosen by Arauco to host R$ 25 billion mega pulp mill

Arauco’s mega pulp mill is being built in Inocência, Mato Grosso do Sul, because the city combines fertile soil for rapid eucalyptus development, a favorable climate, abundant water, transport logistics, and a strong regional vocation for forestry projects.

Inocência gathers strategic conditions for the mega pulp mill

The city offers a favorable environment for forest cultivation and conditions to sustain a large-scale industrial operation.

The forest base was a significant factor in the decision. Arauco has already secured 400,000 hectares of contracted and expanding eucalyptus to supply the future plant, ensuring the security of the Sucuriú project.

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Mega pulp mill to receive R$ 25 billion investment

Sucuriú will receive US$ 4.6 billion, approximately R$ 25 billion, and will be one of the largest pulp mills in the world built in a single stage. The projected capacity is 3.5 million tons per year.

With this volume, the mega pulp mill is expected to reinforce Brazil’s standing among the world’s leading hubs in the sector and places Inocência at the center of an unprecedented economic transformation.

The city has about 8,700 inhabitants. During the works, 14,000 direct and indirect jobs are expected, almost double the local population, with the potential to change the municipality’s routine.

Arauco operates in over 80 countries

The investment is from Arauco, a Chilean multinational present in over 80 countries. The company operates in pulp, wood panels, forest products, and renewable energy.

The company is in markets such as Chile, Argentina, Uruguay, Brazil, United States, Canada, Germany, Spain, China, and South Africa. Arauco is one of the global leaders in sustainable pulp production.

The new factory is expected to operate with clean energy, state-of-the-art technology, waste reuse, emission reduction, and rational water use.

Works began in April

The groundbreaking ceremony for the venture was held in April, marking the start of civil works. The schedule foresees the first batch of pulp in the fourth quarter of 2027.

The mega pulp mill was designed to integrate forest, industrial, and energy production in a single complex. Arauco expects to generate 400 megawatts of clean energy from industrial process by-products.

Of this total, 200 MW are to be used for internal consumption. Another 220 MW are to be sold to the National Interconnected System, a volume sufficient to supply a city of 800,000 inhabitants.

City expected to feel strong economic impact

The factory’s arrival is expected to boost commerce, services, housing, and municipal revenue. Inocência is 330 kilometers from Campo Grande and is preparing to receive thousands of workers during the project’s implementation.

The expectation is for structural change in the region, with income generation, new investments, and economic expansion linked to the pulp chain. The impact is likely to reach urban sectors and support activities for the industrial complex.

For a city of 8,700 inhabitants, the presence of 14,000 direct and indirect jobs during the works represents an uncommon turnaround. Demand for services and housing is expected to grow with the project’s progress.

Mato Grosso do Sul gains strength in the sector

The project reinforces Mato Grosso do Sul’s position in the Brazilian pulp market. Arauco expects that, in less than a decade, the state will become Brazil’s largest producer and one of the world’s leading ones.

In 2024, Brazil produced 25.5 million tons of pulp. About 7.5 million came from Mato Grosso do Sul, distributed among four industrial lines, three from Suzano and one from Eldorado.

The country is the second largest global producer, behind only the United States, which manufactures about 48 million tons per year.

Mato Grosso do Sul, alone, already surpasses Japan, ranked ninth, with production exceeding 7.4 million annually.

Last year, exports from Mato Grosso do Sul yielded US$ 2.7 billion, about R$ 14.4 billion, destined for Asia and Europe, especially China, the Netherlands, and Italy. Brazil exported US$ 10.6 billion in pulp.

With information from Gazeta do Povo.

What’s so special about this little Brazilian town to receive R$ 25 billion for a cellulose megafactory and have more people working than inhabitants?

Fertile soil, favorable climate, abundant water, transport logistics, and expanding forest base explain why Inocência was chosen by Arauco to host R$ 25 billion mega pulp mill

Inocência gathers strategic conditions for the mega pulp mill

Mega pulp mill to receive R$ 25 billion investment

Arauco operates in over 80 countries

Works began in April

City expected to feel strong economic impact

Mato Grosso do Sul gains strength in the sector

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What’s so special about this little Brazilian town to receive R$ 25 billion for a cellulose megafactory and have more people working than inhabitants?

Fertile soil, favorable climate, abundant water, transport logistics, and expanding forest base explain why Inocência was chosen by Arauco to host R$ 25 billion mega pulp mill

Inocência gathers strategic conditions for the mega pulp mill

Mega pulp mill to receive R$ 25 billion investment

Arauco operates in over 80 countries

Works began in April

City expected to feel strong economic impact

Mato Grosso do Sul gains strength in the sector

A village with 115 inhabitants wants new residents: it offers a house, a job, up to 44 thousand euros in benefits, almost free rent, an annual grant of 8 thousand euros for 3 years, and a 20 thousand euro incentive for businesses in the mountains of Italy.

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