MercoPress. South Atlantic News Agency

Uruguay could compete for another pulp mill, if it develops logistics infrastructure

Another state-of-art pulp mill in Uruguay is possible if the logistics infrastructure is rebuilt to support large scale export-oriented businesses, said Jaakko Sarantola

Finland´s UPM pulp conglomerate which already has a plant in Uruguay announced it will commence discussions with the Uruguayan government on the development of logistics infrastructure for a possible mounting of another mill. Discussions will include railroad and roads, which currently are a critical challenge to establish large scale industrial operation in the Uruguayan inland and to connect it to a deep sea port.

 “Uruguay could accommodate a third state-of-art pulp mill with proven environmental performance, if the logistics infrastructure would be rebuilt to support large scale export-oriented businesses. If these challenges can be solved in the coming few years, Uruguay could be a competitive alternative for addressing UPM's pulp market opportunities in the 2020's,” says Jaakko Sarantola, UPM's Senior Vice President, Uruguay Development.

UPM estimates that healthy fiber demand growth will continue in the long term. By end of 2020's the world demand for chemical pulp is expected to grow by approximately 20 million tons. Some 24 million tons of capacity has been closed during the last 15 years and UPM expects the closures to continue at similar pace creating opportunity for new, more competitive capacity.

“In a short period of time Uruguay has created necessary conditions and successfully developed its pulp industry into an export business that has generated positive impacts to the country in many ways. UPM has been part of Uruguayan development for 25 years. We have consistently increased our plantation base in Uruguay and we are well-prepared to supply the wood for the third pulp mill in Uruguay.”

“UPM has developed competencies both in plantation and industrial operations as well as in environmental and social responsibility. Our operations in Uruguay have been leading in environmental performance and sustainability. This will continue being UPM's focus and commitment in all future operations as well.”

“We assess alternative growth prospects in different parts of the world. This prospective opportunity in Uruguay is well in line with our multi fiber growth strategy. UPM is one of the few operators in the pulp market supplying both long and short fiber pulps for a broad range of customer sectors. The future capacity, along with UPM's current four world-class pulp mills, could serve customers in growing consumer and industrial end-uses like tissue, packaging and specialty papers and boards”, concluded Sarantola.

Uruguay currently has two pulp mills, the one belonging to UPM, previously Botnia, and a second on the River Plate, “Montes del Plata” a joint investment by two large forestry companies: Arauco (Chile) and Stora Enso (Sweden). The two mills have turned pulp one of Uruguay's main exports, and the billions poured in helped the country strong growth during the last ten years.