Drive for Growth in the 1990s
Aracruz's strong profits and low debt rate encouraged it to begin building for the future. Kaufmann had become convinced of a coming boom in pulp demand, particularly from the rapidly growing Asian and South American markets, and sought to position Aracruz as a major producer to meet that demand. The company began construction on a second pulp mill to boost its total production capacity to more than one million tons per year. That facility, in Espirito Santo, came online in 1991. The total cost of the project, at $1.2 billion, also included an investment of more than $170 million on expanding Aracruz's forest holdings.
The slumping worldwide economy and falling pulp prices caught up with Aracruz in the early 1990s, however. The company was forced to restructure, slashing a number of jobs in a wide cost-cutting effort. Nonetheless, the company went ahead with a public listing, becoming the first Brazilian company to place its shares on the New York Stock Exchangein 1992. The following year, the company brought in a new CEO, Luiz Kaufmann.