Finnish forest industry company UPM has announced the firm plans to invest heavily in a new pulp mill in Uruguay.
A 2.1 million tonne greenfield eucalyptus pulp mill will be built near the city of Paso de los Toros on the banks of the Rio Negro river in central Uruguay. The investment is reportedly worth approximately 2.4 billion euros.
The increased use of pulp, for example in consumer and industrial packaging, has seen Finland's pulp industry thrive over the past decade.
In addition to the mill investment, UPM will also invest approximately 310 million euros in developing the port operations of the capital city Montevideo, which is located approximately 260 kilometres away.
The company also said it plans to invest in a new residential area in Paso de los Toros, as well as improve the city's municipal waste water treatment plant and restore the municipal landfill.
The investment is intended to increase UPM's pulp capacity by more than 50 percent when the plant begins operating in the second half of 2022.
According to UPM, the conditions for the investment were carefully planned and prepared with the Uruguayan government.
"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," said Jussi Pesonen, President and CEO of UPM, in a statement issued Tuesday.
"At the same time, we have consistently improved our financial performance and achieved a truly industry leading balance sheet. 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," Pesonen said.