CVG Orinoco Paper Mill JV to process 300,000 tonnes of Venezuelan newsprint

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, May 21, 2003 By: David Coleman

Venezuelan Guayana Corporation (CVG) executives have signed a joint venture between subsidiaries Proforca and Serfoca forming the Orinoco Paper Mill (OPM) to produce some 300,000 metric tonnes of Venezuelan newsprint for domestic and continental sales.

OPM is designed to begin operations within the next 120 days in the industrial zone at Macapaima in eastern Anzoategui State.  Announcing the JV, CVG president, Major General (ret.) Francisco Rangel Gomez stressed the importance of the project which he says will form "a vital part of regional development on the northern shores of the Rio Orinoco" and is seen as a principal objective of the State heavy industry conglomerate's expansion.

The new CVG newsprint unit will not only allow for the development of regional Venezuelan forestry activities but will represent an annual saving of 146 metric tonnes of newsprint which have hitherto been imported from abroad using much-needed foreign currency.  Recently implemented foreign exchange controls will encourage Venezuela's predominantly opposition-controlled print media to "buy domestic" and will substantially seal-off yet another mechanism by which Colombian drug cartels launder their North American earnings.

“The paper mill will have a 300,000 tonnes/year production capacity to satisfy not only local (Venezuelan) demand but also allow us to ship newsprint all across Latin America where there's an increase of 5% in newsprint consumption projected over the next 12 months ... Orinoco Paper Mill has been guaranteed supplies of Caribbean pine lumber from a designated 144,686 hectares (357,527 acres) of current forestry cultivation by CVG-Proforca."

Rangel Gomez says the pulp & paper production plan aims to create 6,000 new jobs ... 3,000 in construction and another 3,000 in direct and indirect jobs associated with manufacturing processes.

Serfoca general manager Urbicio Velazquez told reporters that the JV is seeking finance from the World Bank and Nordic Invests Bank of Finland for $650 million in short-term loans while the CVG is contributing the physical real estate and studying procurement of necessary heavy machinery for mill operations ... initial construction work will cost $6 million while associated public works and infrastructure will cost a further $92 million aimed at closing the financing by year's end 2003.