Sukanto Tanoto commences ‘Project Star’ by Bracell, a major expansion project set to transform São Paulo, Brazil

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A global leader in dissolving pulp and specialty cellulose, Bracell is an integral part of Sukanto Tanoto’s ever-growing Royal Golden Eagle group. In July 2019, the Bracell Group went public with the details of their newest venture, Project Star, a R$ 7 billion expansion project which aims to increase the manufacture of dissolving pulp in the state of São Paulo, Brazil.

The largest private investment in the state of São Paulo within the last 20 years, Project Star by Tanoto will be ready for completion in 2021.

Founded by the visionary Sukanto Tanoto, Royal Golden Eagle (RGE) manages a group of world-class companies in the resource-based manufacturing industry, with eight companies that have offices and operations worldwide. RGE aspires to improve lives by developing resources sustainably.

In line with this vision, Singapore-based Bracell began operations in Brazil in 2003 with the acquisition of Bahia Specialty Cellulose and Copener in Bahia. Tanoto expanded operations in August 2018 with the acquisition of Lwarcel Celulose in São Paulo. As such, the company now effectively operates within two states in Brazil.

With the immense support provided by Tanoto and the Royal Golden Eagle group, Bracell is now a major international player in dissolving wood pulp and specialty cellulose, with operations supported by its state-of-the-art factories.

In Brazil, Bracell manages approximately 234,000 hectares of owned land, of which 83,000 are environmental preservation areas. Their harvesting cycle happens every five to six years using sustainably-produced eucalyptus, a 100% renewable resource. The company produces soluble cellulose rayon grids and specialty grades. With further expansion, Bracell recently added kraft pulp to their list of productions in 2018.

Tanoto’s companies are anything but small-scale. Bracell provides natural raw materials and key ingredients for a wide spectrum of products, including printing and writing papers, ladies’ clothing, textiles, baby wipes, sausage casings, cosmetics, special inks, detergents, pharmaceuticals, other food products, and industrial products, such as high-performance tire cords. They further help manufacture cellophane wraps for environmentally friendly packaging as well.

Sukanto Tanoto’s expansion project for Bracell is set to transform São Paulo and its surrounding areas. As a company, Bracell is well-known for a number of reasons, including their high-quality standards, the use of premium technology, sustainable cultivation, and environmental consciousness, along with their large production capacity of 750,000 tons of pulp, and the employment opportunities they provide for 7,000 people in the states they operate in within Brazil.

With Project Star, Tanoto’s aim is to magnify and expand every such aspect, positively benefiting production, the environment, and employment opportunities amongst the locals of Brazil.

The company has modern production facilities which minimise negative impacts on the environment, along with being actively involved in social and environmental protection programmes, such as community planting and providing support for beekeepers. Tanoto’s commitment towards social and environmental responsibility is unmatched, and Bracell’s operations reflect this through the variety of programs they implement.

Amongst these are the wildlife and flora monitoring program for biodiversity conservation and Lontra, a Private Natural Heritage Reserve (RPPN) owned by …

Traditional logistics versus technological players

Although the rewards of a digital transformation can be significant, so are the challenges to making it happen in logistic industry. Traditional freight forwarders are reluctant to implement modern technological solutions. They still prefer proven methods of customer service and preparing quotes.

What are the most important reasons for this? What is holding them back?

The reasons for the lack of investment in modern software

There are at least three reasons why a freight forwarder does not invest in modern software. The first is belief that creating a state-of-the-art IT environment is a must before launching a digital transformation. But this belief is a misconception. The implementation of modern technological solutions can be phased. Building systems that cover the entire business of the company is not necessary. A better strategy is to focus on areas where it is possible to quickly increase competitiveness.

The second reason for the lack of investment is faith in the effectiveness of currently used solutions. Freight forwarder believe that their customers prefer personal contact with sales employees, they are accustomed to negotiate rates and do not expect any changes. However, the ability to quickly receive information about the price of the service is one of the service standards most appreciated by customers. This strengthens their willingness to use the services of a specific company and builds loyalty.

Finally freight forwarders hesitate before implementing freight rate management software because they don’t know if the investment will bring the expected growth. This is another mistake. The effectiveness of the sales team is one of the most important factors affecting the level of sales. Improving the freight quote preparation process increases the number of potentially supported queries and translates into increased sales.

The emergence of technological competition

One of the strongest threats for traditional freight forwarders is from players that are adopting digital technology as the basis for business model. That lets them compete with a much lower cost base and operational excellence.

More and more such companies are appearing on the market. Their founders believe that the industry is ready for digital change which will significantly improve customer experience.

Investors who are willing to finance a technological startups also believe in the technological future of the industry. Innovations are not only related to the implementation of freight rate management software, but also to cargo monitoring, transport safety and transactions. Instant freight quotes are just the first step in the digital development of the industry. Blockchain, artificial intelligence and others are waiting in queue.

Opportunities for traditional freight forwarders

Fortunately, traditional freight forwarder have many opportunities to apply digital technology. Modern freight rate management software helps not only to improve their operations and grow their businesses but also to maintain their existing customer relationships with acceptable costs and acquire new ones.

But first they must believe that investment will be profitable and will not mean that their business must be turned upside down or rebuilt from scratch.…

Silicon Wafer Shipments Register a Decline

While the semiconductor market remained strong across the world in 2019, shipments didn’t match the record levels of the previous year. In fact, silicon wafer suppliers reported high inventories of eight-inch wafers early in the fourth quarter as shipments and orders continued to slow.

The Reason Behind The Decline

Analysts attribute the decline to on-again, off-again threats of tariffs by the United States and China – which spends more on importing semiconductor chips than on foreign oil — as well as product manufacturers looking to prop up their balance sheets by relying on existing inventories where possible. The eight-inch wafers are commonly used in automotive electronics and household consumer products, making production and sales data a barometer for general economic conditions.

Semiconductor Equipment and Materials International, a global industry organization, reported in November 2019 that third-quarter shipments slipped 1.7 percent from the previous period to 2.932 billion square inches. That was almost 10 percent lower than the third quarter of 2018 and consistent with projections cited by a trade publication in Taiwan. The dip was mitigated to some extent by an uptick by silicon wafer suppliers in shipments of 12-inch wafers, more commonly used for handsets and memory chips.

What This Means Looking Forward

Reduced recent consumption could drive down costs In Western nations if production isn’t scaled back, a possibility because the market is so fractured and competitive. That could be good news for consumers in the market for anything from memory sticks to big-ticket home appliances.

The wildcard by most accounts will be China, which has multiple silicon wafer suppliers scheduled to come online in 2020 in that country’s never-ending bid to catch up to the United States in manufacturing. The challenge the Chinese face is that their research and development program has struggled to gain ground on the rest of the world, where chip computing power doubles every other year and has meant having to import more than 80 percent of the necessary semiconductors.

No one really knows what the future holds for China and the semiconductor market, but it is safe to say that the world will be watching, especially those who love tech gadgets, to see what happens in 2020.…