MercoPress. South Atlantic News Agency

Uruguay confident that Portuguese pulp mill project remains on track

Forestry, pulp and paper have become a booming industry for Uruguay

Uruguay and the Brazilian state of Matto Grosso are disputing the massive investment of almost two billion US dollars in a pulp and paper plant which one of Portugal’s largest corporations is planning to build in South America, reported this week the Lisbon business daily Economico.

“The hypothesis” of building a plant in Matto Grosso sounds “most attractive” said Portucel’s president of the board Pedro Queiroz Pereira, hours before meeting with a delegation from the Brazilian state headed by its governor André Puccinelli.

However a Uruguayan official and top negotiator said the project “remains on track”.

The Portuguese newspaper said that Mr. Queiroz Pereira statements follow on reports from the Brazilian press indicating that “Matto Grosso do Sul has been selected for the plant instead of Uruguay”, in spite of the year long negotiations with Montevideo.

Mr. Puccinelli allegedly has already been successful in eliminating from the dispute for the two billion US dollars investment two other Brazilian states.

“Portucel’s investment in Matto Grosso should be around two billion US dollars in the first phase, half of which for mounting the pulp and paper plant” according to the Brazilian press.

Meantime in Montevideo, ministerial cabinet secretary Miguel Toma denied that Portucel was withdrawing from Uruguay arguing the corporation can address several projects at the same time.

“It’s not true that Portucel is giving up its investment plans in Uruguay. Furthermore I have an appointment with the board at the end of the month and will be travelling to Lisbon to advance on details of the contract. On my return there will be details on the operation”, Toma anticipated to the local press.

Although no project can be considered assured until documents are signed, “there have been no changes of plans since we begun negotiations, all remains on track” said Toma who is Uruguay’s main negotiator with Portucel.

“Obviously there are different technical reports to be culminated, environmental impact assessments to be considered, and there’s a flexible timetable, but we’ll have good news in the near future”, added the Uruguayan official.

If Portucel finally decides to build a plant in Uruguay this would be the second pulp and paper project. The first was Finland’s Botnia which has been producing and exporting for over a year, in spite of a conflict with neighbouring Argentina.

Another project from highly indebted Spain’s Ence was sold to Stora Enso and a Chilean company which have for the moment frozen the operation because of the global recession scenario.