MercoPress. South Atlantic News Agency

Vazquez announces massive investment in pulp plant and port

Vazquez, “concern but not alarm with the financial crisis”

Uruguay's president Tabare Vazquez announced that a Portuguese pulp and paper company will spend over 4 billion US dollars to build a cellulose plant and port in Uruguay.

During a meeting with foreign correspondents Vazquez said the investment from Portucel Soporcel Group includes not only a pulp plant but also a deep-water port in the east of the country next to the Brazilian border. Regarding the current global financial crisis Vazquez said Uruguay is ''concerned but not alarmed'' adding that if needed it could tap some of the 9 billion US dollars in international reserves to ease credit and boost lending. Vazquez revealed that Uruguay has available an additional one billion US dollars on stand by from multilateral organizations such as the World Bank, Inter-American Development Bank and the Andean Promotion Corporation. He also recalled that in January 1999, when Brazil surprised Mercosur associates with an unannounced devaluation of the Real, Uruguay's foreign trade was 67% dependent on neighbors Brazil and Argentina, but currently that percentage is down to 30%, "which means we have a diversified trade". "This also means that the current depreciation of the Brazilian currency, (in the range of 30%) should not have a significant impact for Uruguay, as happened in 1999, one of the seeds for the collapse of 2002. However in spite of Vazquez reassuring message the head of Uruguay's meat packaging industry has blamed the financial crisis for crippling beef exports, as Russia and the EU suspended shipments. Something similar is happening with the hides and tanneries which have been forced to diminish activity and have left workers redundant. Vazquez, a professional oncologist announced that in November he would be visiting Paris for the 120 anniversary or the Pasteur Institute, Strasbourg and Cyprus.