Fibria Celulose will relocate the business from the Port of Baltimore.
"We needed an alternative that would provide us better competitiveness in the Northeast U.S.," said Mateus Carmo, Fibria general manager for North American operations. "The Port of Philadelphia provided us a better value for operations."
The fiber, manufactured from eucalyptus trees, is used to make tissue paper, including facial tissue, paper towels, and toilet paper. It will be distributed from Tioga, in Port Richmond, by rail - in a joint venture by Conrail, Norfolk Southern, and CSX - and truck.
To meet the company's needs, the Philadelphia Regional Port Authority agreed to make rail upgrades. The state has pledged to improve bridge clearances to accommodate bigger, taller boxcars.
The terminal operator, Delaware River Stevedores, will invest in equipment, information technology, and training, said Robert Palaima, president of the firm, which employs waterfront labor at Tioga.
In a letter to Fibria's business partners, Carmo said that the infrastructure improvements "will transform Tioga terminal into a premier wood pulp terminal," with 397,000 square feet of warehouse space, 22 railcar spots, additional on-terminal storage of up to 30 railcars, and multiple truck docks.
The terminal will serve Norfolk Southern and CSX (Conrail handles the switching) and offer a 42-foot-deep draft for ships at berth, on-terminal drop-hook truck capacity, and convenient access to I-95 and I-76, the letter said.
"We've been working on this for quite some time. The governor's meeting helped accelerate the talks," Palaima said.
Tioga has catered mainly to seasonal cargoes such as Chilean fruit.
"We have been trying hard to identify a cargo that is steady and long-term," Palaima said.
The distribution center will operate five or six days each week, with work unloading the ships and maintaining inventory and distribution to paper manufacturers.
Palaima said he expected 18 to 24 ships a year eventually with an annual volume of 500,000 tons.
Gearbulk International and STX ships will transport the pulp.
"Fibria's success will have a domino effect, as companies from all over the world will take another look at the Port of Philadelphia as a hub for their shipping operations," Corbett said in a statement.
Charles Kopp, chairman of the Philadelphia Regional Port Authority, which oversees Philadelphia port terminals, said other shippers in Brazil and elsewhere in South America were interested in the city and "will be watching closely" to see how Fibria fares.
"If good reports go back," Kopp said, "the hope is to get more."
Fibria produced 5.3 million tons of pulp and paper in 2013 and exported worldwide. Revenue was $2.9 billion.
"We can be more competitive in the area compared to Baltimore," Carmo said. "We saw Philadelphia strategically positioned to help us."
BY THE NUMBERS
Port's designation as N.E. distribution center for eucalyptus wood pulp will create:
Total jobs, including
rail and trucking.
and terminal jobs.
In economic activity annually.
Ships a year