MercoPress. South Atlantic News Agency

Uruguay to sign agreement with Brazil to boost the naval construction industry

Minister Kreimerman made the announcement during the launching of a barge with 5.000 tons capacity for the pulp industry

Uruguay and Brazil will be signing this month an agreement to promote the development of Uruguay's naval construction industry, which has been described as one of the fastest growing sectors of the economy, said Industry and Energy minister Roberto Kreimerman in Montevideo during the launching of a barge for the pulp industry.

 “Our policy is based on the diversification of industrial production, promoting new areas plus the traditional ones” said Kreimerman who revealed that on 16 May Uruguay and Brazil will be signing the agreement to promote the country's naval industry, which is also an example “of the very good trade and manufacturing relations we have with the government of President Dilma Rousseff”.

“Our relation with Brazil is 'paradigmatic' and that ensures demand for our naval industry; they have huge needs of support vessels for their booming offshore oil industry and promotion of fluvial activity” added Kreimerman.

The 90 meters long barge with a payload of 5.000 tons, launched and baptized “Playa de las Cañas” is the third vessel contracted by the Montes del Plata pulp factory and will be used for the transport of tree trunks along the river Uruguay to Punta Pereira on the River Plate.

This is the third barge built especially for the purpose of feeding the recently finished pulp mill, Uruguay's second and which demanded an investment of 1.5bn dollars and is to be inaugurated sometime later this month and is expected to begin production a few months later.

The three barges were constructed by the Uruguay-Galicia consortium Galictio-Tiferey, with 80% of Uruguayan labor. An estimated one thousand people work at the yard close to Montevideo.

“The overall investment in the construction of the three barges was over 13 million dollars and represented a strong boost for Uruguay's naval cluster”, said Montes del Plata in an official release.

Montes del Plata is a joint undertaking by Sweden/Finland's Stora-Enso and Chile's Araucaria. Given the plant's production capacity it is among the short list of the largest in the world.

Uruguay is promoting its naval cluster to create jobs and recover an industry that has wilted for decades. However with the strong demand and higher prices for international commodities, agriculture production and new industries such as pulp manufacturing has increased significantly and the country's roads system was not built to sustain a constant traffic of heavy trucks.

Thus the emphasis on fluvial transport both for cereals, minerals and pulp, such is the case with the barges constructed in the Cerro yards. It's a cheaper transport system and less contaminating since each barge can carry the equivalent of almost 500 trucks.

Another option is railways, but Uruguay's network was dismantled in the sixties and seventies, on suggestions from the World Bank, since at the time with cheap fuel, trucks and buses were more profitable, while the maintenance of trains was expensive and when not had to be subsidized.