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Portucel: state paper aims high

For someone who lists the presidency of the Institute for the Development of Eucalyptus Applications on his CV, Jorge Armindo Teixera is remarkably personable. The main achievement listed on that CV is his position as the president and CEO of Portucel - Portugal's leading pulp and paper manufacturer and the country's best hope for a privatization in 2003.

And he says he has a vision. "The Portuguese have a problem," he says. "We think small. We have to challenge ourselves." He's certainly doing that. Portucel has been on the government's list of assets to sell since May 2001, in a deal that was scheduled to be completed by the end of 2002. But bad equity markets and a change of government have combined to halt those plans, leaving 55.7% of the firm in state hands. The remainder rests with retail investors and a 29.2% stake with Sonae, a Portuguese private-equity investor.

The first model for the privatization was simple. It called for the government to sell roughly half of its stake on the stockmarket. And a follow-up offer had a reasonable chance of success - the company's stock price declined by just 1.7% in 2002, in contrast to the 25% slump in the Lisbon stock exchange's PSI 20 index.

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