The Paraguayan group is willing to sell a 51% stake in the business, people with knowledge of the situation said. The deal is being advised by Rabobank, which specializes in agribusiness, one person noted. Rabobank did not respond to requests for comment.

The entire project is valued at $4 billion, including the industrial plant. However, industry insiders see challenges in executing the venture, citing lower productivity compared to Brazilian plantations and high operational costs.

Paracel's top shareholder, Zapag, is a Paraguayan family-owned group with diverse business interests, including real estate, fuel distribution, ethanol production, and river logistics. Austria's Heinzel and Sweden's Girindus are also partners in the project.

With a planned production capacity of 1.8 million tonnes per year, Paracel's plant was initially intended to produce two types of pulp: kraft, widely used in white paper, and dissolving pulp, which can be used in textile fibers (viscose), food, or pharmaceuticals, depending on its purity level. Following engineering studies, the decision was made to build a production line fully dedicated to kraft pulp.

The project, officially announced in 2021 and in development since 2018, has faced challenges in securing new funding. According to another source, the possibility of selling a stake in Paracel resurfaced in the last quarter of the previous year, supported by the Paraguayan government.

However, it remains uncertain whether the sale will succeed. One person indicated that several potential buyers were approached, including Asia Pulp & Paper (APP), owned by the Jackson Wijaya's family, which also controls Paper Excellence. However, no firm commitments have been made.

Rumors intensified in the pulp and paper industry late last week, suggesting that a major company with operations in Brazil had decided to buy a 51% stake in Paracel.

Paracel, Suzano, and Bracell declined to comment on the matter, while APP did not respond by the time of publication.

In 2023, during a conference in São Paulo, Paracel Chairman Per Olofsson said the project was progressing well, with construction expected to begin the following year.

That same year, Paracel appointed former Klabin executive Flavio Deganutti as CEO, with Mr. Olofsson returning to his role as chairman.

Paracel's facility will be Paraguay's first pulp mill, positioning the country as a potential new frontier for the industry, particularly due to the availability of pastureland suitable for eucalyptus cultivation.