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UPM is embarking on Uruguay pulp mill investment

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UPM is embarking on Uruguay pulp mill investment

January 20, 2020 - 12:55
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UPM is embarking on the most ambitious investment in its history by building a new pulp mill in Uruguay.

Located in Paso de los Toros, the new pulp mill will significantly increase the volume of UPM’s pulp trade and improve the group’s earning power. In addition, it is a move warmly welcomed by the company’s customers.

Bernd Eikens, Executive Vice President at UPM Biorefining, recently met with Chinese customers who eagerly anticipate the new production facility. “They wish we could accelerate the project and finish it sooner. It’s encouraging to hear that there is already strong demand for the new mill’s products. In this respect, the road is paved for a successful project“, Eikens states.

The production capacity of the new Paso de los Toros pulp mill will be over 2.1 million tonnes of eucalyptus pulp. This means that UPM’s pulp production capacity will increase by more than 50%. The production facility is scheduled to start up in the second half of 2022.

Another key factor was that UPM has systematically increased the number of its forest plantations in Uruguay, and the group already has another operational pulp mill in the country — the Fray Bentos pulp mill, which started up in 2007.

Eikens adds that the synergy benefits of the two mills are substantial, as the new mill can utilise UPM’s existing organisation in Uruguay, from human resources management to financial administration.  “We can also share our production and maintenance expertise. Minimising transport distances from the forest plantations to the pulp mills can in turn critically improve the cost efficiency of both mills. In addition, we are able to use the same vessels and port logistics in the outbound transport of pulp.”