MercoPress. South Atlantic News Agency

Stora Enso confirms construction of pulp mill in Uruguay

The Swedish-Finnish-Chilean group became Uruguay’s largest land owner

The Swedish-Finland group Stora Enso and Chile’s Arauco confirmed to the Uruguayan government their intention of building a pulp mill in the country with an investment in the range of two billion US dollars reports the Montevideo daily Ultimas Noticias.

The two companies decision which have teamed together for the enterprise, comes months after they acquired a majority stake in Spain’s Ence interests in Uruguay including 136.000 hectares forested with eucalyptus and the industrial project to build a cellulose mill in Punta Pereira, along the River Plate, for 344 million US dollars.

According to a top Uruguayan official quoted by the newspaper the news was confirmed last week during a meeting of a delegation from the consortium with local authorities in Montevideo.

The investment should have “a great impact” for the economy of the country, generating “at least 3.000 new jobs” and a growth projection for the Uruguayan economy equivalent to 2% of GDP. The exact location of the future plant was not confirmed.

Following the purchase of Ence’s interests in Uruguay, Stora Enso and Arauco became Uruguay’s largest private owners of land totalling 250.000 hectares.

The announcement of the new plant comes in spite of the ongoing dispute with Argentina over the location of the Botnia cellulose mill along a shared border river jointly managed.

Argentina took the case to the International Court of The Hague arguing Uruguay had ignored the treaty dating back to the seventies which demands joint decision regarding the use of common waters, plus the fact that Argentina claims the plant contaminates, both accusations are vehemently denied by Uruguay.

A ruling from the Court in The Hague is expected for the first quarter of next year. Meantime Argentine pickets remain blocking an international bridge linking the neighbouring countries just across from where the Botnia plant is preparing to celebrate two years of activity.

Pickets have blocked the bridge and access for almost three years.