MercoPress. South Atlantic News Agency

ENCE confirms freezing of Uruguay pull plant project

Ence project at Uruguay river

Spanish pulp company ENCE confirmed to Uruguayan officials that they are freezing the construction of the one million plus tons plant project in Punta Pereira until they find an associate, but discarded any chances of abandoning the whole operation, reports the Montevideo press.

According to Colonia's mayor Walter Zimmer, --where the plant is to be built--, over the weekend he met with an ENCE delegation who said they "would continue with the essentials to keep the free trade zone status and construction permits for the foundations of two jetties, but the whole operation in Uruguay will be delayed and the plant is to be postponed". ENCE delegates argued that an associate is needed "to share the volumes and cost of the operation" since pulp prices internationally have plummeted 50% and "we need to share the investment". However, according to Mr. Zimmer the delegates said that "six potential partners in the industry have expressed an interest", thus there are no chances of abandoning the project. Last January 20 ENCE informed the Madrid Stock Exchange that it was looking for a partner to share the Uruguay project, "given the new context of the world market". The Punta Pereira project of a million plus tons of pulp demands an investment of over a billion Euros of which ENCE has already disbursed 250 million. ENCE that also has 170.000 hectares of forests in Uruguay, said that eucalyptus takes nine years to grow while in Europe similar trees for pulp making, two to three decades, which is a significant cost edge for the whole project. Portugal's Portucel and Stora Enso from Finland were mentioned by ENCE as potential partners some time ago, but the corporations given the world scenario seem to have lost interest, according to the Montevideo media.