On Tuesday 23/07/2019, UPM announced the decision to construct a 2,1 million tonne greenfield eucalyptus pulp mill near Paso de los Toros in central Uruguay. This investment of USD 2,7 billion will grow UPM’s current pulp capacity by more than 50%. The mill is scheduled to start up in the 2nd half of 2022.Today, the plantations that UPM owns and leases in Uruguay cover 382,000 hectares. UPM will invest USD 350 million in port operations in Montevideo and local facilities in Paso de los Toros. In addition to the mill and port investments, UPM will invest in a new residential area in Paso de los Toros and provide temporary housing for the project personnel.
This project will also enhance infrastructures of the country and has significant impact on the economy :
1/ Efficient logistics chain is fundamental to the mill’s competitiveness and supply security in global markets. This will be secured by the agreed road improvements, extensive railway modernization and port terminal construction. UPM has decided the construction of a deep-sea pulp terminal in Montevideo port with an investment of approximately UISD 280 million. Direct rail access from the mill to a modern deep sea port terminal will grant an efficient supply chain to world markets.
2/ Based on independent socioeconomic impact studies, the mill is estimated to increase Uruguay’s gross national product by about 2% and the annual value of Uruguay’s exports by approximately 12% after completion.
In the most intensive construction phase, there will be more than 6,000 persons working on the site. When completed, approximately 10,000 permanent jobs are estimated to be created in the Uruguayan economy whereof 4,000 would be directly employed by UPM and its subcontractors. About 600 companies are estimated to be working in the value chain.
The mill will be located in one of Uruguay’s many free trade zones and pay a fixed annual tax of USD 7 million per annum. The mill’s value chain is expected to contribute USD 170 million in annual taxes and social security payments and contribute annually USD 200 million in wages and salaries.
The entire project would be the largest investment ever made in the country with USD 4 billion in total investment, or about 7 percentage points of GDP.