"We have capacity expansion projects in some regions and other investments aimed at improving service levels, delivery, and product quality," said Manuel Alcalá, CEO of Smurfit Westrock in Brazil. "Part of the funds will also go toward artificial intelligence, where we've already begun investing, to boost [forest] productivity and reduce downtime," he added.

Of the total, approximately $31 million (around R$174 million) will be allocated to the Três Barras plant in Santa Catarina. Inaugurated in 1974, the facility--part of Westrock's legacy in Brazil--produces pulp and kraftliner paper, which is later converted into packaging. The company also operates a forest business unit in the same region.

One of the main projects at the Três Barras site is the expansion of the causticizing plant, which recovers chemicals used in the wood pulping process. According to the company, this upgrade is expected to increase production capacity at the facility by 6% to 10% by the end of 2027.

With an installed capacity of 600,000 tonnes of paper per year, about 70% of the output from Três Barras is supplied to the company's converting facilities. The remainder is sold to other markets, mainly Argentina, Paraguay, and Chile. "Três Barras is a strategic platform for us in Latin America," Mr. Alcalá said.

Commenting on the ongoing tariff dispute between the United States and China, Mr. Alcalá acknowledged that there has been an impact on sales, particularly in sectors such as proteins, fruits, and footwear. "We've already seen an immediate market reaction, as exporters have to quickly reposition themselves," he said.

According to Mr. Alcalá, the company also ramped up sales to China in the past month, when U.S. tariffs on Chinese goods peaked, although he did not provide specific figures.

Boosting forest productivity

A portion of the announced investment will go toward the company's forest operations. Smurfit Westrock currently manages 54,500 hectares of forestland in Brazil, including roughly 22,000 hectares of pine, 10,000 hectares of eucalyptus, and the rest in native forest. "By law, we can't buy more land in Brazil, so we have to become much more productive," Mr. Alcalá said, referring to Brazilian legal restrictions on land ownership by foreign entities.

The company's pine plantations currently yield 48 cubic meters per hectare per year (m³/ha/year), and the goal is to reach 60 m³/ha/year in the next harvest cycle. The national average is 30.8 m³/ha/year, according to the latest report from the Brazilian Tree Industry (IBA).

Post-merger results

The integration process between Smurfit Kappa and Westrock, which began in July 2024, is nearing its one-year mark. According to Mr. Alcalá, the process has been "relatively easy." "The companies had very similar values, and now they're aligned. Their portfolios were complementary and there was very little customer overlap," he added.

The merger created a global paper and packaging giant with annual revenue of approximately $20 billion and operations in 42 countries. In the first quarter of 2025, Smurfit Westrock posted a $150 million net loss, reversing a $229 million profit from the same period a year earlier. Revenue reached $7.67 billion between July and September, up from $2.91 billion the previous year. The company attributed both the loss and the revenue spike to merger-related effects.

In Brazil, in addition to its forest business and paper mill in Três Barras, Smurfit Westrock operates ten packaging plants--eight in the Center-South region and two in the Northeast.

While the company does not disclose country-level financials, Mr. Alcalá noted that the Brazilian operation's EBITDA rose 13% year over year, driven by post-merger synergies and outperforming initial projections. "I see a lot of opportunity in Brazil and believe we are very well positioned here," he said.