Ence, a company based in Madrid, is today not only the leading European producer of eucalyptus-based

pulp but also the number one owner of eucalyptus timberland in Europe. Oscar Del Santo talks to Ence’s
cellulose division manager Francisco Gil and its marketing spokesman Javier Milans del Bosch.

236 Industry Europe Industry Europe 237

S
ince we became a private company in
2001,” reflects Francisco Gil, “there
has been an increase of 27 per cent in
our production which has risen from
850,000 to 1,080,000 tons. We are the
second largest producer of eucalyptus-
based pulp in the world and there is no
doubt that our sales have been boosted
by the faster-than-expected growth in
the use of writing paper or tissue for
238 Industry Europe
domestic purposes: kitchen and toilet
rolls and handkerchiefs are just some
familiar examples.
“Europe is by far the largest consumer,
with 5.3 million out of a total world con-
sumption of 9 million tons, and there is a
booming demand for our pulp and other
services. We are responding to a market need
with a quality product that offers some
unbeatable features.”
This is the confidence of a company
whose shares have ascended to dizzying
heights, thanks to an exceptional financial
performance in 2005. Consider the figures:
the fourth quarter posted a net profit 129
per cent higher than that of 2004; a share
capital increase of one new share for
every three existing shares was success-
fully carried out and turnover reached a
record €571 million; and electricity sales
up 49 per cent; to top it all, American sub-
sidiary Eurofores increased its forest land
assets to exceed the 100,000 managed
hectares benchmark.
This enviable state of affairs is underpinned
by a solid business structure that has
managed to adapt to the new realities of
being a private company. Grupo Ence
carries out its activities through two broad
areas: forestry and pulp. The forestry area
is engaged in the cultivation of trees both
in Spain and in Uruguay, as well as the sale
of timber to pulp processing industries
and the provision of various wood prod-
ucts and forestry services. It manages
around 200,000 hectares in Iberia and
Uruguay and focuses mainly on the cultiva-
tion of eucalyptus. The pulp area, on the
other hand, produces and distributes
Ence’s trademark TCF (totally chlorine
free) and ECF (elemental chlorine free)
ecological cellulose pulps.
As Mr Gil is quick to point out, Ence is changing world. However, at Ence, we period of time; our objective is to create
no longer a pulp company, and it would have always believed that our past experi- the right blend of youth and experience.”
be wrong to see the company from that ence is valuable and helpful when travel- On the technology front, Ence carries
limiting perspective. “We also deal in the ling through the uncharted territory of the out its research and technology projects
production of electricity from biomass and future. That is why, rather than employing through a shared research and technology
the production and sale of wood products. fresh graduates, we have always favoured centre (CIT) based in Pontevedra but with
We currently run three pulp mills in Huelva, those with some previous relevant experi- branches in Huelva, Navia and Uruguay.
Pontevedra and Navia and, although cel- ence. While we are always injecting new “The CIT has been essential in furthering
lulose still accounts for the bulk of our blood into the company we also value innovation in our company,” explains Mr
revenues, there is a definite upward trend those who have been with us for a long Gil. “It currently employs 37 people but
in sales from electrical power, wood and
forest services and products. The fact is
that we are much more than a cellulose
company: our forestry area, for instance,
creates firebreaks, actively participates in
reforestation projects and manufactures
forest machinery. The same applies to
our area, which is increasingly stretching
its wings beyond our traditional core
business of pulp production for various
paper products.”
Technology and culture
There are two pillars on which Ence has built
its recent successes: permanently high
levels of investment in technology and
research, and a distinctive company culture
that has focused on continuity rather than
drastic change. “A company culture is
never static and there is no doubt in my
mind that change is a necessity: we all
need to adapt to the challenges of a fast-
Industry Europe 239
 there are 33 more in the area of R&D working
in the CIT branches attached to our mills.
When it comes to forestry, the CIT has been
focusing on the genetic improvement and
enhanced forestry of the ‘eucalyptus
globulus’. Some recent projects include
genetic transformation techniques, selec-
tion of better quality trees and the design
of specialised forest machinery.”
There have also been some momentous
achievements in pulp technology and solid
wood products. Mr Gil feels particularly
proud of Ence’s TCF and ECF Kraft bleached
pulps, all of which are suitable for producing
paper grades that can achieve certifica-
tion by Eco-labelling institutions. “We are
in fact the world leading producer of TCF
pulp with more than 400,000 tons manu-
factured last year, and remain convinced
about TCF processes benefits.
“It is not just that environmental regu-
lations will require TCF but also that
consumers worldwide are increasingly
demanding it. The environmental and
ecological advantages of TCF pulp are
enormous, knowing as we do today that
dioxin and other toxic chlorinated com-
pounds are formed in the reaction between
chlorine and organics in the pulp. TCF
has been of capital importance to us and
has ensured that we have retained our

240 Industry Europe

leadership position in spite of the
cyclical downturn that the industry
has suffered recently.”
Facing new challenges
The globalisation of world markets has
certainly left its imprint on the pulp manu-
facturing sector and, in the words of mar-
keting spokesman Javier Milans: “At Ence,
we have all had to smarten up to face the
new challenges posed by intense price
competition from producers in countries
such as Brazil or Indonesia.” As he explains,
“The reason this market is so competitive
242 Industry Europe
is because we are dealing with a commodity
that is subject to cyclical demand and sig-
nificant price swings.
“We feel we are in a strong position
thanks to the species of ‘white’ euca-
lyptus we work with and to the suitable
service we develop for our customers.
In this sense, according to our best
research and experience, we have a dif-
ferentiated mix of product and service
that gives us an unquestionable edge.
Once our Uruguayan operation becomes
a reality, our production capacity will be
increased by 500,000 tons and this will
hopefully allow us to meet expanding
global demand.”
As a matter of fact, Ence already has a
strong presence in Uruguay with 117,000
hectares of managed forest reserves. It is
the project of building and operating a pulp
mill in the M’Bopicua area that has stirred
controversy both in Uruguay and neigh-
bouring Argentina for its possible environ-
mental impacts. Mr Gil says: “There have
been a lot of unsubstantiated and subjec-
tive views being put forward that are not
based on fact. I would like to highlight
that, despite a lot of disingenuous disin-
formation being put about, we are a clean about every major European country. We development in our field of action. Finally, our
producer backed by just about every envi- have full-time staff dedicated exclusively diversification strategy – with electricity gen-
ronmental and quality certificate there is to the technical assistance of all of our eration from biomass or wood trading and
available, both nationally and internationally. clients – whatever the size of their forestry services – should ensure that we are
“Our eucalyptus forest reserves, for account may be.” ready to look to the future with confidence
instance, are FSC (Forest Stewardship “Constant cooperation with universities and high expectations.” ■
Council) certified. We comply with every and other research institutions ensures
piece of environmental legislation in terms that we are always at the cutting edge of any www.ence.es
of safety, emissions and effluents, interna-
tional waterways, etc. We use sustainable
raw materials that, by their very nature,
contribute positively to the global environ-
ment. We were indeed the first company
in the Spanish pulp and paper sector to
obtain environmental certification for our
pulp mills and also the first to voluntarily
join and adopt the EMAS (European Standards
for Ecomanagement and Ecoauditing) pro-
tocol. In my view, the issue has become a
political hot potato for reasons that are
beyond our control and that have to do more
with regional politics than with the feasi-
bility and undoubted benefits of our project.”
While Ence exhausts every possible route
to convince the public of the advantages
of its Uruguayan plan, it also wants to
make sure that it can further consolidate
its leadership position by – in the words of
Mr Milans – “delivering first-rate customer
service and after-sales support.Ence has
a wide client base and is present in just
Industry Europe 243