Brazilian pulp project due to uncertainty over government policy on foreign land purchases, a paper said on Saturday.
In August of 2010, Brazil's attorney general issued a finding that has cast doubt on the value of new investments into commercial forests and large scale farming by foreign-owned companies.
Paulo Eduardo Brant, chief executive of Cenibra, which is controlled by a consortium of Japanese pulp and paper companies - Oji Paper, Itochu and Nippon Paper - told the local Estado de S. Paulo newspaper that rising local labor costs were also turning its project less attractive.
"Unless there is some change in the (attorney general's) finding, the project is practically discarded," Brant said about Cenibra's investment in a new pulp plant and commercial forests in the state of Minas Gerais.
The pulp and paper industry, which is very capital intensive, has been particularly hit hard by the new government policy restricting the size of land foreigners can own. Tens of billions of dollars in investments in the pulp and paper industry alone have been suspended over the past year.
The government began taking a more protectionist stance to foreign land ownership after deep-pocketed companies and investment funds started snapping up large tracts of land, driving up local prices and creating increased competition for local farming interests
