Brazil's Suzano to invest $4.8 bln to boost output

SAO PAULO (Reuters) - Brazilian paper and pulp company Suzano (SUZB5.SA) unveiled plans on Wednesday to invest $4.8 billion over the next seven years to more than double its production capacity and said it is open to acquisitions.

The company intends to build two new pulp production units in the northeastern states of Maranhao and Piaui, and expand capacity at its Mucuri plant in the state of Bahia. It will invest $1.8 billion in each of the new units and $500 million on its expansion plans at Mucuri.

In addition, Suzano said it will spend a total of $700 million on tree plantations in the three areas to ensure its timber supply.

The expansion plans, which will be concluded in 2015, will increase Suzano's pulp production capacity by 4.3 million tonnes a year to 6 million tonnes and its paper output by 100,000 tonnes to 1.2 million tonnes. That will lift its overall output capacity to 7.2 million tonnes a year.

The company, formally known as Suzano Papel e Celulose, said it is also considering adding a second production line at one of the two new units in Maranhao or Piaui. But it said it may opt to build another plant at a separate location instead.

Despite the costly investment plans, Suzano hasn't ruled out making any acquisitions in Brazil and abroad in the coming years to further expand.

"We're looking at acquisition opportunities in general, nothing too specific yet," the company's chief executive, Antonio Maciel Neto, said at a news conference.

"If there's an acquisition opportunity abroad or in Brazil, and we judge it to be in our best interests, we could either issue debt or tap the capital market to raise money," he added.

Suzano announced its investment plans on the same day that it reported a 7.8 percent increase in second-quarter net profit to 185.56 million reais ($117.44 million), buoyed by strong pulp sales.