The Finnish pulp and paper maker UPM (listed on Nasdaq) and the Government have signed a preliminary agreement for the construction of a new pulp mill ($2.32 billion) to be located close to the city of Paso de Los Toros, in the department of Durazno. The Government will develop the rail and road network by funding the construction and long-term maintenance of the network.
If UPM decided to move forward, the mill will have an annual capacity of about 2 million tons of eucalyptus market pulp. The impact of this project for Uruguay is estimated at 2 GDP basis points and more than $1 billion in export revenues each year.
The project will be really structuring for the country on account of its importance for the economy of Uruguay and for whole infrastructures it will create.