Finnish forestry company UPM wants to invest $2.7bn to build a eucalyptus pulp mill in Uruguay so big it will raise the country’s GDP by 2% and boost the annual value of its exports by 12%.
The company plans to build the plant in Paso de los Toros, in the centre of the country.
The pulp of fast-growing eucalyptus trees is used in many paper products, from newsprint to disposable diapers.
In a 23 July press release it said a combination of low-cost wood supply, huge scale, latest techniques and efficient logistics would allow it to produce a tonne of pulp for about $280, making the mill "one of the most competitive in the world".
Jussi Pesonen, the chief executive of UPM, said: "During the past decade UPM has developed additional plantation areas in Uruguay and created a market-driven pulp business with wide customer base in growing end uses.
"We are now in an excellent position to take this transformative step and capture the opportunities of attractive, growing markets in a sustainable and highly competitive way."
The production capacity of the mill will be 2.1 million tonnes, and will increase the company’s current capacity by more than half. When in operation, UPM says, the mill will also generate more than 110MW surplus of renewable electricity.
UPM is also investing $350m in port operations in Montevideo, the capital of Uruguay, and local facilities in Paso de los Toros.
The factory is scheduled to be complete 2021.
Image: Paso de los Toros, Uruguay (Zeroth/CC BY-SA 4.0)