aracruz2000

Goodwill will be amortized on a straight line basis

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Unformatted text preview: lulose S.A. (Veracel) for U.S.$ 81,011. Veracel is currently in the pre-operational stage, growing eucalyptus plantations in the state of Bahia in Brazil. Stora Enso OYJ and Odebrecht S.A. own the remaining 45% and 10%, respectively. At the end of 2002, the Company and Stor Enso will jointly decide, based upon prevailing market conditions, whether to proceed with a planned construction of Veracel´s own green field. Upon closing of the purchase agreement, the Company andVeracel entered into a three-year wood supply contract to provide wood for the Company´s mill expansion currently in progress. Under terms of the contract, beginning in 2002 Veracel will supply up to 3.85 million cubic meters of wood at U.S.$ 40.50 per cubic meter. The Company accounts for its investment in Veracel using the equity method of accounting. At December 31, 2000 the Company’s investment in Veracel included goodwill of U.S.$ 15,583, which will be amortized over a period up to 7 years. Amortization is expected to commence in 2002, which corresponds to the estimated begi...
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