Empresas Copec SA
SGO:COPEC
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Good afternoon, everyone, and welcome to Empresas Copec's 4Q '20 Results Conference Call. Today's presentation and the 4Q '20 earnings release are available on the company's website at www.empresascopec.cl and also on our Investor Relations website, investor.empresascopec.cl.
Before we begin, I would like to remind you that this presentation may include market outlooks and forward-looking statements, which are based on the beliefs and assumptions of Empresas Copec's management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events, and therefore, depend on circumstances that may or may not occur in the future. Investors should also understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Empresas Copec and could cause results to differ materially from those expressed in such forward-looking statements. This presentation contains certain performance measures that have been adjusted with respect to IFRS definitions, such as EBITDA.
I would now like to turn the conference call over to Mr. Rodrigo Huidobro, Chief Financial Officer of Empresas Copec. Please go ahead, sir.
Okay. Thank you very much. Thank you, everyone, for joining in today. We're going to take a look at the results of the fourth quarter 2020 for Empresas Copec. I will be joined here today by people from our Investor Relations department, led by Mr. Cristián Palacios; and also people from Arauco, led by Gianfranco Truffello. They will both be helping us out in the questions you might have at the end of the presentation.
[Operator Instructions]
So I will remind you towards the end of the presentation to please submit your questions.
I will now move on to the presentation, actually to Page 4 of the presentation. You can flip it yourself, please, where we can -- we are taking a look at the main highlights of the quarter. It was actually a very good quarter for the company. We saw a strong recovery in EBITDA in both year-to-year and also quarter-on-quarter. This was explained basically by a very good performance of the wood products division joined by also good performance in pulp and in fuels. In the case of wood products, we have seen a gradual and persistent improvement, which was basically led by demand coming from home remodeling, from home improvement, in general, and from construction. Year-on-year, we saw volumes increasing strongly, 4.5% in the case of panels and 25% in the case of sawn timber, so very strong growth. Margins have increased year-on-year basically due to higher prices for sawn products but also due to operational efficiencies that we have been achieving also gradually throughout the year.
In the pulp division, we also saw a higher EBITDA, which is related to -- especially to higher volumes in the comparison with both the preceding quarter and the last quarter last year. And also, in quarter-on-quarter comparison, we see higher prices in pulp. More on that, of course, in a while.
In the case of fuels volumes, we have seen a gradual normalization of the activity in all geographies in which we operate, and therefore, we have seen volumes gradually trending up. They actually were up by 20% in Chile and 22% in Terpel. Gas station volumes are actually above pre-pandemic levels in some geographies, which is a very good signal of recovery. In the case of LPG, this has been a very resilient business throughout the pandemic, and we have been able to achieve EBITDAs in line and even higher than in the corresponding quarters in 2019.
The projects have been making progress as expected throughout the pandemic. We've had to solve some issues, and we've faced some delays as we have informed you throughout the year. But in the late few months, we have been seeing progress as expected. MAPA is up to 78% as of February, and we're still expecting startup by early 4Q, this year. In the case of Mina Justa, almost 100%, we're almost there and we're expecting to begin production during March. Leverage. Regarding leverage, we also have good news. We've gone down from 4.6% to 4.2%, which is basically driven by our improvement in EBITDA for the quarter.
Moving on to Page 5. We can see the EBITDA of $573 million placed there in a historical context. This compares, of course, very well to the immediately preceding quarter and also to the last quarter last year. In 4Q 2019, we achieved an EBITDA of $397 million. So we have a 45% increase on that figure and 22% on the figure related to the immediately preceding quarter.
In terms of net income, we recorded $118 million, which compares very well with the significant loss we recorded in the fourth quarter 2019, which was basically driven by impairments, as we will detail further on.
On Page 6, we can see the increases in EBITDA explained by company. You can see there that EBITDA increase is basically because of the performance of Arauco. Arauco is up because of a better performance both in wood products, especially in wood products, but also in pulp. In the case of fuels, which also explains a large part of the increase in EBITDA, we are seeing better EBITDA because of better volumes and margins as well. Towards the right-hand side of the graph, you can see the composition of EBITDA. As usual, we have Arauco, Copec and Abastible, making up more than 90% of the total EBITDA of the company.
On Page 7, we can see a similar analysis for net income. You can see there that we are increasing net income. It's actually had an increase of 157%. We're starting, though, from a negative base. That negative base was explained by impairments basically, by nonoperational factors, basically in the 4Q last year. And the main differences this year are explained by Arauco for -- because of operational and nonoperational effects. Camino Nevado, which is our mining division, where we recorded very large impairments last year, in 2019, related to Mina Invierno, that is also, of course, up with respect to the fourth quarter last year. And then we have our Abastible and Copec also contributing to this positive difference.
Towards the right-hand side, we can see, as always, our main subsidiaries, representing most of the net income and the loss that we are recording in this particular quarter, once again, in Camino Nevado, and again explained by further impairments that we have gone ahead within meeting the end.
On Page 8, we can see the detail of the consolidated income statement. As I said before, we've recorded that profit or positive net income of $118 million. This is explained by nonoperational factors in the first place. We have a decrease in other expenses, as a smaller loss for associates, and that's all related to impairments both in Arauco and in Camino Nevado last year. In the case of other income, we have an increase because of the sale of some forestry assets in Brazil and also higher revaluation of biological assets, which is the noncash effect that we record in net income and which relates to the growth in the value of plantations.
In terms of operating income, we are seeing better results at Arauco, explained by margins and volumes in wood products basically and also volumes in pulp and also improved results in Copec in Chile, in particular. And that's related to a better industrial margin and also higher volumes in gas stations. Abastible also has been performing well throughout the year. In this particular quarter, we have better operating results with stronger physical sales across different geographies.
On Page 9, we are taking a look at the most important financial ratios. Operating margin is up, EBITDA margin is up, and net debt-to-EBITDA is down. So in all cases, very good news. We've gone through a period of very intensive expansions in terms of CapEx. And so you can see there that since the fourth quarter of 2018, we have been gradually increasing our net debt-to-EBITDA level. This was further increased last year because of a scenario of low pulp prices and the effects of the pandemic. So we came to a high of 4.6, which we recorded in both the second and third quarter 2020. And we are already changing the trend and started to go down, and now we're standing at 4.2. This should continue to improve throughout the year if we see further improvements in EBITDA in the year -- in the months to come.
In terms of maturities, we are standing quite well with a well-balanced debt schedule for the coming years and a reasonable amount of cash in order to face the maturities that we have this year and CapEx that we will be facing this year as well.
Moving on, if you jump now to Page 12, we have some more detail on our forestry division. Arauco showed an increased net income, $75 million compared to a loss of $92 million in the fourth quarter 2019. And this is, once again, essentially because of a stronger operating income. We have shown higher margins in wood products, which is driven by higher prices and also lower costs. This is very important because we have been achieving operational efficiencies, particularly in North America, following the start-up of the railing mill. So lower costs and also higher prices in sawn timber and panels.
In the case of pulp, we have seen an increase in pulp volumes and prices, which are stable when compared to the last quarter of 2019, which are up when compared to the third quarter of '20. In the case of nonoperating income, we had some impairments last year in the fourth quarter of 2019. We had some impairments related to closing down some panel facilities. Once again, given the start-up of Grayling, we went ahead with an optimization of production and logistics in the North American market, and this implied closing down the oldest and less efficient facilities and that brought about an impairment that we recorded in the fourth quarter of 2019.
Together with that, we are showing higher other income, which is related to a sale of assets in Brazil and also revaluation -- higher revaluation of biological assets, which is this effect of growth in the value of plantations. This is all partially offset by other profits that we recorded in the fourth quarter 2019, a onetime profit that we recorded given the acquisition of Masisa Mexico. And this stemmed from the fact that we acquired the asset at a price that was deemed lower than the fair value of the asset, and that gave way to a onetime profit that we recorded in the fourth quarter 2019.
If we move on to Page 13, so more information on pulp we have here. With respect to the fourth quarter 2019, so year-on-year, we have EBITDA going up explained basically by higher volumes. On the graph there, on the right-hand bottom corner, you can see EBITDA coming up to $122 million for pulp, up from figures of $68 million in the fourth quarter of 2019 and $104 million in the third quarter of 2020. So significant increases with respect to both quarters.
Year-on-year is explained basically by higher volumes, and we also had unit costs dropping for the different fibers in different percentages. In the case of quarter-on-quarter, we have higher volumes and prices. We have volumes going up by 17.8% and prices going up by 5.4% with respect to the third quarter, and also unit costs, which have our variations. In the case of hardwood, it's up by 6.7%. In the case of bleached softwood, it decreased by 2%. But in general, clearly, an upward trend of the EBITDA in pulp.
Moving on to Page 14, some more information on pulp, especially regarding the fourth quarter last year. That was actually the fourth quarter in the year. We saw the printing and writing industry with quite interesting dynamic with a recovery, despite the restrictions imposed by the COVID-19 pandemic. Tissue market was quite strong throughout the year and was stable with respect to the immediately preceding quarter. We did not see any further increases but stable at a very good level.
In the case of China, we saw very strong demand basically across the board, in packaging, printing and writing and specialties as well. This led to prices increases basically in long fiber.
In the case of Europe, the same dynamics basically, sometimes with a small -- with a little delay, but the same dynamics, all in all. Printing and writing, packaging and specialty also very strong. High operating rates, low stocks in general and lower imports as well. We can see demand increasing by 2.6% in an aggregated figure for the total world figure. For the first 10 months, that's the information we have -- the first 10 months of 2020, 2.6% up. China, very interestingly, 5.4% up but most of the other geographies as well.
In the case of inventories, they are standing at very reasonable levels, very -- in the case of softwood, it is very much in line with historical levels. In the case of hardwood, it is even below ever at historical levels. So it has been trending down, and we now feel that these are levels that imply stability in the market going forward.
On Page 15, we have more information on what we have seen in the pulp markets in the months following the fourth quarter 2020. Actually, in the first quarter 2021, we have seen markets looking very healthy, strong demand across all geographies, some restrictions in supply. And as a result of all that, we have seen prices moving up quite significantly. Some maintenances of different mills around the world have been postponed from the second half of 2020 to the first half of 2021. So this is basically generating a sensation of restrictions in supply and pushing prices further upward.
We can see there, on the graph in the bottom left-hand side, that in China we are now standing at $730 per ton for hardwood, $900 per tons for softwood and $1,050 per ton for dissolving pulp. So all in all, a very interesting and positive evolution of all kinds of prices and a very healthy market that we are seeing right now.
Moving on to the next slide, we are giving out some more detail about wood products in general. EBITDA is up to $197 million, which is quite an impressive figure for this division, $197 million for the last quarter last year, so 2020. Comparing very well, of course, with the $73 million that we recorded back in the fourth quarter 2019 and with the $141 million that we have recorded for fourth quarter 2020. This is driven, in the case of panels, as you can see there, we're basically increasing volumes and prices quite significantly with respect to the last quarter last year, 2019. And we're also continuing to increase prices with respect to the fourth -- to the third quarter 2020.
And in the case of sawn timber, as you can see there, these increases in volumes have been quite strong, 25% up year-on-year and almost 12% quarter-on-quarter. Prices are also very interestingly up by 5.8% and 10.5% quarter-on-quarter and year-on-year, respectively. So all in all, a very good performance of the wood division.
Some more info on that on Page 17, where we are showing some more information on our most important market, which is the North American market, which currently represents 50% of our total sales. In the case of particleboard and MDF, we saw strong demand driven basically by home improvement, repair, remodeling, constructions. As you can see there, the housing start indication is quite strong. We are up to 1.6-almost-million units. The prices continue to increase. Together with that, as I said before, we have achieved cost reductions as well, which have healthy margins. We believe that this -- the signals that we're receiving is that these market conditions could continue throughout all of the first half of the year and could go even further on. But of course, this is contingent and conditioned by the eventual evolution of the COVID-19 effects when they have affected production, demand and logistics in general.
In the case of remanufactured products, we also saw very good demand. Markets are very active. North American market especially is very active. We have seen demand levels that are not very frequent for this time of the year because of seasonality. So that's a very good signal as well. And in this particular product as well, we saw reduced supply from China and other competitors because of import duties that have been placed on them, which, of course, place some additional pressure -- upward pressure on prices.
In the case of plywood, we have seen demand steadily increasing during the past months and prices actually reaching a very, very high levels -- record levels.
On Page 18, some more information about other markets. LatAm or actually, South and Central America, which is our second most important market with almost 40% of our sales. Very good situation in Brazil, a good scenario with a strong demand and tight supply. We are seeing signals of this eventually remaining stable for the coming months, of course, always subject to the evolution of the pandemic.
Same thing in Chile. Demand has been very strong. We have seen very good activity in plywood and panels driven by furniture, home improvement, moldings and other product lines. We have seen prices going up also in sawn timber.
In the case of Argentina, same scenario basically. Good demand, good price scenario, and this has increased more than inflation and devaluation. So we have been able to maintain our prices and margins measured in dollars.
Asia, Europe and the Middle East are smaller markets. But in general, we have seen the same trends all around the world with very good demand and reduced supply in sub-geographies. That's it for now for the forestry segment. Just one second.
Moving on now to Page 20, where we're starting out with the fuels division. In general, we saw a higher EBITDA when measured in local currency. This is -- the numbers that we are showing there are millions of Chilean pesos. So we saw an EBITDA of CLP 127 billion compared to CLP 122 billion last year. The reason for that for this higher operating income and EBITDA basically higher volumes, which is quite amazing given the pandemic situation, but we are seeing higher volumes in the gas station channel and also better industrial margins in Chile. Together with that, we saw a positive revaluation of inventories in Chile and Terpel.
We had been hit throughout the year by negative FIFO effects, so negative effects in inventories. Now we saw a change in this trend, but we saw a positive effect in inventory, slightly positive. But the important milestone there is that the trend has changed both in Chile and Colombia.
Regarding volumes, we saw a drop in volumes, of course, when comparing it with the last quarter of 2019, given the effects of the pandemic. So they dropped by 12% in Terpel, 5.5% in Chile and 5.7% in Mapco. But clearly, the trend is upward, and we are gradually showing a recovery in our sales volumes in the last few quarters.
In the case of nonoperating results, nothing very significant. Probably just to mention that we went ahead with some sale of real estate assets in the fourth quarter 2019 that yielded a positive effect in other net income last year.
Moving on to the next slide, some operational figures for Copec in Chile. We see that the market share there accumulated as of December is standing at 58.6%, which is clearly within the usual historical range that we have shown. The market share ended for the last quarter at 57.9%. We're also showing the fuels volumes on the right-hand side there. We can see that volumes are down in the industrial channel, which is the channel that has been hit the most by the pandemic, 13.8% down year-on-year, but gas stations are up 1.4% with respect to last year. Regarding the outlook, we are seeing this gas station volume, which continues to be very strong and so growing already above pre-pandemic levels. As always, this is a business segment that has usually very stable margins when measured in local currency. But there is, of course, some volatility always coming from FIFO effects, which depends on the evolution of the oil prices.
We also have the industrial segment, which is much more volatile because we have large clients going in and coming out of the market with deferring markets -- margins among them and some other volatility factors, but in general and over time, this is a stable-margin business, and we continue to perceive that, that is the case. Very well positioned, in general, in gas stations with a very strong network in Chile and in all the geographies in which we take part.
In the case of Mapco, it is worthwhile mentioning that Mapco ended the year with a record EBITDA of $75 million, which compares very well with the $58 million recorded in 2019. This is driven mainly by a very good scenario of margins, which lasted throughout most of the year and may not be representative of recurring EBITDA. But Mapco, the trend has been clearly upward, and we have achieved significant increases in margins and volumes. And now we're focusing -- as we show there, we're focusing on margin stabilization, operational efficiencies. We continue to work in optimizing the product mix in convenience stores, and we're also starting work in renewing and expanding the network. So very good year for Mapco in particular this year.
On Page 22, we're moving to Terpel. Terpel showed an increase in nonoperating and operating income. You can see the EBITDA there going up measured in Colombian -- in million Colombian pesos. The nonoperational factors, which are quite relevant, have to do basically with lower financial cost and favorable exchange rates. In the case of operational factors, we essentially recorded higher margins because of a result of revaluation of inventories.
In the case of fuels, we have seen a decrease year-on-year. We continue to see decreases, of course, which is 11.9%. This is essentially explained by decreases in Colombia, which is the main market and where the weight of the aviation segment is also especially significant. And so if you can see in the charts down there, where we are showing the 4Q 2020 compared to 1 year before that and 1 quarter before that, in the year-on-year comparison, we have a minus 11.9% driven by Colombia and also with a very significant drop in the Dominican Republic, which is essentially aviation. So that is a segment that continues to be most affected. The rest have gradually recovered very well.
In the case of quarter-on-quarter, to the right-hand side, you can see that the increase is 22.3%, which is a very good figure, and that is driven by the main market, which is Colombia, which increased 24.6% and recovery was recorded across the different geographies. So in general, very good performance of Terpel.
In -- on Page 23, we are showing some information about Abastible, our LPG subsidiary. Abastible had a good performance throughout the year, very resilient. Volumes in the residential segment tended to increase because of the pandemic, and to a great extent, offset those volumes in the industrial segment that, of course, tended to go down because of decreased commercial and industrial activity during the pandemic. All in all, the EBITDA and the net income finally recorded by Abastible in the year was better than in 2019.
In terms of operating income, we saw higher margins in Chile and higher volumes in Colombia and Ecuador. Volumes increasing in all geographies, especially in Colombia, with 13.5% up; Ecuador, where we saw an increase of 6.4%; and also in Chile and Peru with some smaller increases but also surprisingly increases as well.
Nonoperating income is also up in this particular quarter and also -- and has been the -- this has been a factor affecting the results of Abastible throughout the year. Taxes, which are volatile in the case of Abastible because of exchange differences that are recorded in relation to international subsidiaries; in this case, it was a more favorable tax result.
Moving on to Page 24. Some more operational information on volumes sold of LPG. You can see there that Chile goes up by 1.3%. This is essentially driven by the bottled segment, which is residential in general and offset by the bulk segment, which is industrial and commercial and that continues to be affected by the COVID-19 restrictions.
In Colombia, we saw an increase of 13%. That is also related to the residential and bottled segment but also driven by some commercial strategies and geographic expansion that has yielded very good results because of Abastible in Colombia. Actually, total market share of Norgas has been gradually increasing.
In the case of Peru, we still see that that's a market that is affected to a great extent by formality, and that has been especially patent during the pandemic. However, so gas now reached pre-pandemic volumes. We saw increases year-on-year driven to a large extent by Autogas, which is the mobility -- or the LPG for vehicles segment. The bulk segment continues to be affected as in all geographies by restrictions related to the COVID, and some contraction in this case as well in the bottled segment.
In the case of Ecuador, pretty much the same pattern. We saw a decrease in the bulk segment related to restrictions on commercial and industrial clients. However, we decreased less than the market. There were -- therefore, market share has continued to go up. In the bottled segment, we saw increases in line with recovery in residential and also in this particular case, commercial and industrial activity.
On Page 25, a brief word on Sonacol. Sonacol is usually a very stable division and moves up and down in relation to the volumes transported. In this particular year, of course, volumes went down because of decreased consumption at the final customer level. And therefore, we saw a decrease in EBITDA for the quarter and net income as well.
Other investments -- and we'll go through this very quickly because we do not have any significant variation there with the exception of Laguna Blanca, which is recorded through Camino Nevado, where we recorded an impairment basically of $254 million. This is for 100% of the company. We have 50% of the ownership in this case, so we'll record half of that. But for the whole of the company, last year, in the fourth quarter 2019, we recorded a total impairment of $254 million. This is related to the Mina Invierno mine that we are no longer operating. And that compares favorably with another impairment that we did in the fourth quarter of 2020, which amounted up to $82 million, $83 million for this year. So it's a further impairment but much lower than the one we did in the fourth quarter of 2019, all of them related to the Mina Invierno asset that we cease to operate.
Regarding the rest of the companies, which are basically natural gas and fishing and also our international mining division, the results are pretty much in line with the last -- with the fourth quarter last year. So not a lot of comments to make.
If we move on to page -- a couple of pages forward to Page 29, we're going to start revealing the milestones and highlights of the quarter. I will invite you at this point in time to start submitting your questions through the -- via text to the platform -- through the webcast platform. We already have received some questions.
The first milestone to highlight here is that Empresas Copec continues to be recognized for its quite significant activity and improvement in sustainability matters. In this particular case, we were, for the first time elected for the Sustainability Yearbook, which is issued by S&P and Robeco. These companies also give way to the ranking -- to the indexes to the Dow Jones SI -- Dow Jones Sustainability Indexes, in which we have been taking part for several years now, but this is the first time we're elected for this yearbook. On top of that, we were elected as Industry Mover. So distinguished within our industry for the very important improvements that we made during year 2020.
On Page 30, we are showing a pretty significant milestone achieved by Arauco, which has turned into the first company around the world to be certified carbon-neutral. This was carried forward during September 2020, the data corresponding to 2018. And with the protocol established by Deloitte, carbon emissions were measured and those carbon emissions that are issued but also captured by native forests, forest plantations are also -- and also carbon-storing products. The whole process was basically audited by PwC as well. And this finally turned Arauco to the first company -- forestry company worldwide to have this certified carbon-neutral condition. Total captures amount to 6.9 million tons of carbon dioxide. Total emissions amount to 4.3 million tons. So there's a net capture of 2.59 million tons of carbon dioxide. So very interesting achievement by Arauco and very good contribution to controlling climate change.
On Page 31, we have some information on MAPA. We already anticipated that progress was up to 78% as of February 2021. The main equipments and parts for the final stage of the project has been received, and construction and assembly of those products are already underway. Some technical details there or the recent highlights, probably something to highlight is the fact is that the power boiler test, which is one of the most important parts of the mill, the test has been successfully completed.
A brief word on the special efforts that Arauco has placed in providing safe sanitary conditions for workers and constructors throughout the whole construction process. Arauco has placed the sanitary conditions above everything else and has adjusted protocols and facilities accordingly. We have now 5 test centers installed and performing more than 2,000 PCR exams per day. So a great effort there in terms of ensuring safety and sanitary conditions for workers and constructors.
The startup is expected to take place at the beginning of the fourth quarter 2021. At that point, as we've said before, we are all going to be shutting down the existing mill, Line 1, which is the oldest mill in Arauco. And all of this, of course, will be done in accordance with the environmental permit that has been issued.
Moving on to Page 32. We have some info about Mina Justa. Very interesting progress here. We are up to 99.8% of the total project. And therefore, we're operational -- we're expecting operations start up for this month. During March, we should have, let's say, the first production already. And the first shipments should take place during the second quarter of this year. This is, just to remind you, a project where we own 40%. The controlling stake of 60% is owned by a Peruvian company called Minsur. It is a project located in the south of Peru, in Ica. The production that we expect to reach is 150,000 tons per year during the early years of operations, where we will be exploiting the best grades in the mineral, of course.
The average -- well, the life of mine will be 115,000 tons per year of fine copper, 16 years of life of mine. The total CapEx is going to be in line with initial expectations, which is very good news, $1.6 billion, very much in line with expectations. We are all operating facilities for importing acid and water supplies, which are critical to the project. And we expect to produce around 100,000 tons of fine copper during this year with a mix of 35% cathodes and 65% concentrates. All in all, very good news from Mina Justa.
Page 33. We already mentioned this through the presentation. This is very good news in terms of normalization of fuels volumes. In the case of Terpel, we saw a drop of 12% year-on-year in the fourth quarter, but this drop is less than we recorded in the third quarter, which was 28%. This implies an upward movement of 22% quarter-on-quarter. In the case of Copec, the drop in volumes was already single digits, so 6% less than in the fourth quarter 2019. We had recorded a 21% decrease in the third quarter when the restrictions related to the COVID-19 were much more active. And this implies that we increased by 20% quarter-on-quarter. So very significant increases, in general.
In the case of Mapco, volume was down by 6%. And that implies that it is also down 5% quarter-on-quarter. In that particular case, conditions have been a little more volatile regarding lifting restrictions and placing restrictions related to the COVID. But as we told you before, Mapco ended a very good year with a record EBITDA.
In the gas station channel, in particular, and we already mentioned this as well, we already are seeing pre-pandemic levels, and in some cases, even more than pre-pandemic levels in [indiscernible] gas stations.
If you move on to the next page, we are showing here a project that is iconic for our strategy in relation to electromobility. We want to lead the electromobility transition in Chile, as we have said before. And we have inaugurated one of the largest electroterminals in LatAm for charging buses. With this, we continue to consolidate our role in -- as leaders in the country's energy transition phase. And at the same time, we explore new forms of mobility and energy segments. This is a very modern facility, state-of-the-art. It includes 57 high-power Voltex chargers, which is the brand we use for the electroterminals at Copec. These are all supplied with renewable energy, solar and hydraulic. And we are supplying simultaneously up to 115 buses, which means benefiting more than 600,000 users of public transportation. So a very interesting milestone in our gradual transition towards electromobility.
And finally, a brief word -- we do not have any significant news here, but a brief word just to remind you that we are in a process of sale of assets for Sonacol, Gasmar and also evaluating a potential sale of MetroGas and AGESA, which is our natural gas division. We have been permanently informing about the sale of assets. We have nothing specific at this point. These are all confidential processes, so not a lot that we can say. But just to remind you that this process are ongoing. These are 2 processes -- 2 divestment processes that are going ahead, and we are evaluating a third one. These are all assets that fit the same risk profile, long-term, stable cash flows, and therefore, they may be worth more in the hands of specialized investors. We are, through these sales processes, also giving some more visibility to these assets that are pretty much hidden within our portfolio. It also contributes to improve even further our credit metrics in -- throughout these years where we have faced very important investments and CapEx and reduced EBITDA.
So really nothing new to inform. Gasmar is the most advanced. It's well into the commercial phase. In the case of the others, we have -- as we have previously informed, we have been going through different stages previous to the commercial phase, bend the due diligences of the contracts, information for product goals and so on and so forth, which has been importantly late by the pandemic. We continue to perceive a very important deal of interest for the 3 assets. That's what we can inform at this point in time given the confidentiality of the processes regarding our asset sales.
Having said all that, we are reaching the point where we are going to be getting any potential Q&A that you might have. Cristián is going to be receiving the questions through the website -- through the webcast platform and is going to be consolidating those questions and asking and passing them over to me or to Gianfranco.
Please, Cristián, if you can go ahead.
Okay. Rodrigo, we start with the Q&A. We have our first question from George Staphos at Bank of America. "If you could please -- and what are your expectations regarding an additional $450 million contribution to Arauco? And under what conditions would you do this? And additionally, ROCE is up at 4.9%. What do you see as normal for normal level for Copec? And when would you expect to achieve this?"
Yes. Regarding the capital increase, we have got ahead already with a $250 million capital contribution to Arauco in September last year. We have committed up to $700 million for this year, as required by Arauco. We are, of course, in permanent contact and conversations with Arauco regarding their need of capital for this year. We are probably going to be looking at that matter within the next few weeks. It will depend on the evolution of the pulp markets and Arauco's markets in general. It will depend on what finally happens with MAPA and the minute in which it will be able to start-up and the final CapEx that we commit in MAPA and the credit metrics in Arauco in general.
But our main objective is to, of course, keep our investment grade both at the Arauco level and at the Empresas Copec level. But we are permanently monitoring this and looking at potential needs by Arauco and the capital increases committed, and we are willing to realize it as soon as it is needed and if it is needed. So that's permanently monitored.
Regarding returns, yes, we have been gradually going up. We usually look for returns of somewhere around -- if we look at historical returns, we usually have seen returns of anywhere between 8% and 9% in a long-term -- long-time average. This is -- corresponds to the composition, of course, of very different segments, which are fuels, panels, LPG and pulp, and they all have very different risk profiles. So in general, we get -- or we aim for lower returns in those businesses that are more stable and higher returns in those businesses that are more volatile.
On average and across all business line at the consolidated level, as I said, the long-term average is around 8% to 9%. We have seen a max of around 12% when we see very good pulp pricing scenarios, but the average is around 8% to 9%. That's the long-term answer.
Okay. Thanks. Next question from Carlos De Alba at Morgan Stanley and also Rodrigo [indiscernible] at BTG. "What are basically the expectations of -- for CapEx for 2021 and 2022? And then if you can comment on expected volumes and shipments on the fuel division, production at Mina Justa and also production at Arauco in terms of pulp volumes."
Okay. Yes. Regarding CapEx, we are coming out of a couple of years where we saw quite important figures in CapEx above $2 billion both for 2018 and 2019 -- sorry, 2019 and 2020. And this was driven, as you well know, by this intensive CapEx phase that we have been going through, which has meant going ahead with the MAPA project, the Mina Justa project, acquisitions of assets in forestry, such as Masisa, the dissolving pulp project and others.
For year 2021, this is going to go down, undoubtedly. We're still working on that figure. Still have to clarify which projects are going on this year and which are going to be postponed. Just to remind you, last year, we had initially announced a figure of $2.6 billion, which ended up being around $2.1 billion. So that meant that we postponed approximately $500 million in projects that may be carried forward this year or not, depending on conditions related to the pandemic and also depending on the evolution of our credit metrics. So we are going to be looking at those 2 factors very closely in order to finally determine which projects we are carrying forward.
Anyhow, we are aiming for a range of around $1.6 billion to $1.9 billion. It's a very broad range still because we still have to make these definitions. And that range is comprised of a base CapEx of around $700 million to $800 million, which is the usual Capex, plus what is remaining of MAPA and -- the remainders of MAPA and Mina Justa for up to $700 million to $800 million approximately. And the rest is comprised of these smaller projects that we have been gradually postponing, which are smaller expansion projects and efficiency projects as well, which we still have to determine. So -- but that's at least a broad range for 2021.
2022, still nothing very visible, just the base CapEx of around at $700 million to $800 million that we usually go ahead with. And on top of that, we should add those projects that make sense, that have a positive NPV and that we decide to go ahead with, but nothing very clear at this point in time.
Regarding outlook for fuels volumes, we expect volumes to grow pretty much in line with GDP, as they always do. And that is very hard to say at this point because it depends a lot on the pandemic, of course. So very hard to say. But as we said during the presentation, we have seen gas station volumes already recovering to levels which are very equivalent, and in some cases, even above pre-pandemic levels. So we are, at this point in time, seeing good signals, but it's very, very hard to project and they should be indexed through economic activity and to the pandemic situation.
Margins, as I said during the presentation, should, as always, be very stable in general with these volatility elements, which are related to FIFO, exchange rates and industrial margins.
Regarding Mina Justa, as I said, we should expect 100,000 tons during this year and then gradually increasing towards the expected 150,000 tons for the next few years as we work on the best grades of the mineral. The standard ramp-up period for a project of this size and this complexity is around approximately 1 year. So by year-end or by the first quarter of next year, we already should be producing at full capacity in the case of MAPA.
There was one further question on the volumes related to pulp and wood. I will hand that over to Gianfranco for that area.
Yes. Thanks, Rodrigo. Yes, regarding volumes, I mean, as usual, we sell what we produce. On the full year, we will probably sell all what we produce. Through the quarters, there will be some variation regarding the shipments. And currently, we're expecting some small delays from logistics from Chile, basically, not in other markets. So that could be impacted some of the volumes in the first quarters. But we hope that, that will normalize through the year. So I will guess that we will, as usual, sell the capacity that we produce.
And regarding MAPA, the startup will be at the beginning of the fourth quarter and with the usual ramp up of about 6 months. So we should be producing more or less 200,000 tons. Most of that I don't think will be sold during the year because of the inventory accumulations and shipments. So in terms of volumes sold, I think that MAPA shouldn't be felt in the market a lot this year, almost will be felt in the 2022, of course, but volumes should be quite similar to last year on aggregate for the whole company.
Okay. Thanks. Now we have a question on panels. Leopoldo Silva at LarrainVial. "Could you please share your thoughts on the possibilities of the 800,000 tonnes idle panel capacity? Since housing migration will be a longer trend in the U.S., could Arauco overhaul its assets to make them productive again?"
Gianfranco, please?
Well, currently, we don't have plans to reopen those mills right now. I mean, we let go all the employees and things like that. And so we need to assess if really it's a long-term trend or not. Currently, we don't have plans to reopen that. If we close them because they were not very competitive in terms of cost of older mills in general. So right now, we don't have intentions to reopen it now, but we should see in the future what happens on the long-term perspective. We don't have also intention to sell those assets right now. So currently, no changes in the close of those assets.
Okay. Thanks. Next one comes from Isabella Vasconcelos at Bradesco BBI. "On wood products, will higher prices and in-house cost initiatives be able to offset cost pressures, for example, higher refined costs?"
Well, it's difficult to assess right now, I mean, because it depends on the market. Every market that we are currently producing and sell is different in Latin America and Brazil, of course, the states. So it depends on the movement of those input prices in those markets, but I think we will try. And at the beginning, prices went up earlier than input costs. And right now, we are feeling some increase in those costs. And depending on the market conditions, we will be able to pass those to customers or not. But currently, I don't have a clear view on if we'll compensate or not. We hope so, and we expect to -- demand to continue to be strong in order to be able to increase prices to compensate for those increase in input materials and -- but also it will depend on competition in those markets.
And a second one from Isabella "On asset sales, do you see any other opportunity to sell forests?"
Could be. I mean, we are always analyzing that to see if there's an opportunity to obtain more value than we have in our assets. I don't think it would be more sales in Brazil. That was an opportunity unique because it was some pine plantations in a location that was very difficult to access with high cost of harvesting. We were not using those plantations for many years. So that was a new condition. So in Brazil, I don't think that we will sell more. In Chile, we need to assess case by case, and we will announce if we have any operation that will be materialized.
Next one comes from [ Adeel Farooqi ] at Santander. "Also in the panel business, demand has been good but is there also a supply effect?" He wants to know if that supply effect has to do with disruptions caused by COVID-19.
Yes. I mean, there's some effect of disruptions because of COVID-19 because of the strong winter in the U.S. -- in the south of the U.S. So many factors play in different markets. But we have seen some production restrictions in some of our competitors that have helped us to compete better. So depending on the market -- but yes, we have seen some of those. I don't know exactly the amount of impact in supply, but we have seen news about less supply because of COVID restrictions and some impact of weather, especially in the U.S.
Okay. We have another one from Carlos De Alba at Morgan Stanley. "Do your net captures of 2.5 million CO2 meet additionally tests? And if so, can you monetize them? When?"
Well, we think that we meet additional request, but in order to monetize them, you need to have a market develop in order to trade those certificates -- or to issue those certificates. You need a framework to do that. And currently, for native forests, for captures of CO2 in plantations and in wood products, there's no really an active market. So it could happen, not in the short term we think.
But we do have captures of CO2 because of energy generation using biomass that we have been certifying CRs, which are carbon bonds for 10 years. And those has a clear methodology under the United Nations, the CURO Protocol, and we certified about 600,000 every year. Those could be -- we are selling every year. Currently, the prices has been very low in the past, like $1 or $2 per ton. I think that price will start to go up. And those, we can enjoy a better price and monetize them better. But currently, I don't think there is, for the rest, a market yet. I think it could develop in the future and we will analyze them if we would like to monetize.
Thanks, Gianfranco. I have another one from Rodrigo Godoy at Citi Banchile. This -- he has 3 questions. I'm going to pass it over to Rodrigo for the first 2 ones. "What is the deadline to complete the sale of Copec's stakes in Gasmar? And if they are all -- there are still pending more impairments related to Mina Invierno?"
Yes. Regarding the first one, the deadline is within the first 2 months of this year. I can then give you exactly the exact date, but it's within the first 2 months of this year. So we are approaching the deadline, but we're also running through the final commercial phases at the Gasmar process.
Regarding Mina Invierno, we already went ahead, as we said before, with a quite large impairment in 2019, $250 million approximately for the company as a whole. We complemented that with an $80 million impairment last year in 2020. And we believe that values that are now recorded in Mina Invierno's financial statements are quite representative of the value they will have if we either sell them or decide to use them in other projects. And so we shouldn't go ahead with any more significant impairments at Mina Invierno.
Okay. Thanks, Rodrigo. Rodrigo Godoy is also asking for a guidance regarding cash cost for Mina Justa in the midterm.
We have initially estimated that cost around $1.3 million to $1.4 million cash cost for Mina Justa. That is the C1 cash cost concept. So $1.3 million on $1.4 million, that's a range that we're currently estimating.
Another one from Leopoldo Silva at LarrainVial. "If you can comment some more details on the funds already committed to the corporate venture capital that Copec has or is developing right now and funds already committed in these investments? Or any color you can give on this matter?"
Yes. This is an essential part of our strategy to face the upcoming trend and transition towards electromobility and other forms of energy. As I said in the presentation, one of the very strong components of that strategy is trying to position ourselves as the leaders in electromobility. And along those lines, we currently own the largest gas station network in Chile for electroterminals. So the largest electrical charging network in Chile is owned and actually, this--I think it is the largest in South America--is owned right now by Copec. We lately inaugurated this electroterminal for buses as well. And in parallel to that, we have a division that is focused full time in monitoring trends in those segments that are relevant to our fuels business, which are basically mobility, energy and convenience.
In association to that division, we have this corporate venture capital, which has been invested heavily. It has been investing in different ventures. Some of them had to do with solar panels. Some of them have to do with intelligent administration of energy based on big data techniques and so on. So we have several initiatives to which we have committed already, some tens of millions of dollars. I would say, they are around $30 million to $40 million that have been invested already in this kind of interest related to the transformation of the energy sector and the business segment in fuels.
Thanks, Rodrigo. Next one comes from Alfonso Salazar at Scotiabank. This is pretty in line with the last question. "How is the fuels division preparing and adjusting its strategy for a transition of the -- towards electric vehicles, which seems to be accelerating? How do you see EV revolution evolving over the next decade in Chile? And what is the current plan of the company and the Chilean authorities, basically?"
Yes. I think I pretty much covered that question with my previous answer. But just to complement it, we still see projections coming from industry experts and consultants that show that fuels markets in LatAm, in general, should continue to grow for 15 to 20 years more. So we'll still have a growing phase of fuels as electromobility gradually expands its use within core markets. And in order to prepare and be able to take advantage of that transition, we are pursuing a strategy that I just described, which has to do with leading electromobility first in Chile and also be totally attentive to whatever other business opportunities appear in mobility, energy and convenience.
Okay. And we have 2 last questions. One comes from [indiscernible] at Monera Asset. "How much of impairments are left for the closure of Line 1 this year? This is referring to Line 1 of Arauco."
Not so much. We, as I said in another conference call, the savage value of Line 1 will be about $30 million, and we're currently doing about the $1.7 million to $2 million a month. That's the pace for the 9 months that we'll still have. So $15 million, $16 million of deterioration -- accounting deterioration for Line 1 is still left during this year.
Okay. And the last one [ Luis Lida ] at Armada Capital. "Would you please provide more information on the sustaining CapEx for Mina Justa required by your 40% stake?"
Yes. This is -- we are still estimating those figures, but should be around $20 million per year required as sustaining CapEx for Mina Justa, $20 million per year, very initial rough figures that we will be basically giving more precise numbers throughout the year.
Okay. So that was the last question I have here. So we can conclude the Q&A section.
And ladies and gentlemen, we will conclude today's question-and-answer session. At this time, I'd like to turn the floor back over to Mr. Rodrigo Huidobro for closing remarks.
Okay. Thank you very much, everyone, for joining in today. We will be meeting again some time by mid-May in order to take a look at the results of the first quarter of this year. Thank you, all, very much. Bye.
And ladies and gentlemen, thank you. This will conclude today's presentation. You may now disconnect, and have a nice day.