Company History:
Empresas CMPC S.A. is one of the largest companies in Chile. Engaged in the manufacture, sale, and export of cellulose and a broad variety of paper products, it is second only to Empresa Copec S.A. (the nation's largest private enterprise) in the forest products field. CMPC also holds large forest tracts and plantations of fast-growing pine trees. It is the major holding of the Matte group, one of the wealthiest in Chile.
Chile's Paper Tiger: 1920-58
The son of a businessman, Luis Matte Larrain graduated from the University of Chile in 1915 with a degree in civil engineering. Visits to the Panama Canal and the United States gave him valuable contact with the industrial and entrepreneurial practices of North America. With a brother and three friends, he founded Luis Matte y Cia., which engaged in importing goods, principally fuels and lubricants.
But Matte had something more ambitious in mind--using Chile's bountiful forestry resources to manufacture paper products. Toward the end of 1918 he founded the Comunidad Fabrica de Carton Maipu. In 1920 he and Eduardo Morel Herrera merged this factory with that of German Ebbinghaus, who was operating the La Esperanza paper and cardboard factory in Puente Alto, a community on the outskirts of Santiago, to create Compania Manufacturera de Papeles y Cartones. The company had 44 shareholders and the capacity to produce 2,200 metric tons a year of paper and pasteboard. In 1924 it acquired its only meaningful rival, the Santa Victoria factory, also in Puente Alto.
Matte, who was general manager but only a minority stockholder, then presided over the construction of a cellulose (wood pulp) plant in Puente Alto and a hydroelectric power plant in Pirque. He acquired, in 1930, the San Miguel de Chillan hacienda and planted 10,000 hectares (almost 25,000 acres) with pine trees. Following a year of testing which Chilean wood might be most suitable, CMPC in 1931 purchased an industrial plant in Argentina capable of producing 9,000 kilos (about 20,000 pounds) a day of wood pulp. A new cellulose factory was constructed in 1932 to replace the original one. Shortly before Matte died in 1936, he acquired new machinery, expanded the hydroelectric plant, and began work on constructing a new wood-pulp plant to make paper for newspapers and magazines.
Following Luis Matte's death, leadership of the enterprise passed, in 1938, to Jorge Alessandri Rodriguez, an engineer who was brother-in-law of Arturo Matte, Luis's brother. He became general manager. Early in World War II, the German occupation of Norway put an end to CMPC's imports of Scandinavian wood pulp, which still accounted for half of its raw material. Cellulose from North America was more expensive. With an eye to increasing CMPC's cellulose supplies from its own resources, Alessandri, in 1940, purchased a tract of land near Concepcion that contained important reserves of radiata pine. In 1942 the company acquired a Valdivia-based paperboard company. At this point CMPC was supplying nearly all of Chile's demand for printing and packaging paper and, to a large extent, also the nation's supply of newsprint. In the 1950s CMPC built a pulp mill at Laja and a newsprint plant at Bio-Bio. This was one of the most significant industrial investments by Chilean capital without state support.
The son of a man who was twice president of Chile, Alessandri took time out to serve as Chile's secretary of the treasury (1947-50) and resigned as general manager in 1957 to pursue what proved to be a successful campaign for the presidency of Chile. On his election, the New York Times described Alessandri as having been "a brilliant mathematics student and professor. ... He is identified with Chile's wealthy aristocracy and practices profit-sharing in his company." A bachelor, he was said to have almost no social life, usually dining with Arturo Matte and his wife (Alessandri's sister), who lived in the same apartment building. During his 20-year tenure as general manager, CMPC grew more than fourfold.
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