MercoPress. South Atlantic News Agency

Spanish company plans a 1.2 billion pulp mill in Colonia

Spain's ENCE unveiled this week in Montevideo plans to produce a million tons of cellulose by September 2009 in a plant to be built in the south west of Uruguay along the River Plate coast.

Details of the project were announced by ENCE's Director for Latinamerica Adolfo Suar who estimated the overall investment in 1.25 billion US dollars with the creation of 500 direct jobs and 5.000 indirect jobs. Suar also requested the grounds of the future pulp mill in Colonia be declared a free zone. The plant will have double the capacity of the original project that was to be constructed in Fray Bentos next to the controversial Botnia-Orion pulp mill which has led to an unending dispute with Argentina and Argentine pickets. ENCE on request from the Argentine government and arguing logistics problems with two plants next to each other, at the end of last year announced that it was re locating the project along the coast of the River Plate. "The fact that we are going to double production to a million tons means we'll have to expand our forested areas", admitted Suar who emphasized that "as off 2009 the plant in Uruguay will be representing 50% of ENCE's activities in the world". Suar anticipated that the technology of the plant "will be the most updated, state of the art and the most environment friendly possible", one of the conflicting issues with Botnia and the Argentine pickets. He also revealed that the excess of energy generated in the factory with chips biomass, estimated in 70 MW, will be sold to Uruguay's grid. The Uruguayan government has yet to give the green light to the Spanish project, pending on results from accumulated environmental impact assessments. Suar said he is hopeful a "quick solution" can be found to the Botnia dispute which has soured relations between Uruguay and Argentina.