UPM has gained more than 30 years of experience operating in Uruguay. Our work originates in forestry research since the early 90s, when we established our eucalyptus tree development programme. UPM’s focus on R&D from the very beginning forms a strong basis for sustainable plantation operations in Uruguay. This foundation provides a unique end-to-end view of the entire value chain, through which we continuously seek to add value to our customers.
In 2007, the UPM Fray Bentos pulp mill started operations in Uruguay and, essentially, marked the birth of the modern pulp industry in the country. The mill and forestry activities provided thousands of jobs for people, many of which were from the local community. UPM has helped to develop educational programmes and supported the creation of a regional technological university in Fray Bentos to advance technical skills and engineering expertise in rural Uruguay.
Being able to hire highly qualified local talent has been a priority for UPM. Thanks to the Fray Bentos mill, we have seen an increase in, for example, chemical engineering students in the region pursuing a career in the forest industry. Local recruits have been trained early on by our team in Fray Bentos to be the next generation of operators in Paso de los Toros. Transferring expertise and lessons learnt from our previous mill has been a crucial element in building up new operations.
Various positive impacts
UPM has worked in close cooperation and maintained an active dialogue with the local community and authorities from the very beginning of our growth project in Paso de los Toros. Besides providing jobs, education, and business opportunities for local entrepreneurs, an industrial investment of this scale causes changes such as increased traffic and potential social unrest that require mitigation measures.
Accommodating the employees working at the construction site of the new mill was one of the main concerns for the local population. In order to prevent the influx of construction workers from overwhelming any single location, UPM constructed temporary and permanent housing for over 5,500 employees in four different locations. With the completion of the project, the permanent houses and their related infrastructure have been transferred to state ownership, benefiting the local community. A good example of the positive local impacts is also the completely new business area created by the local company that manufactured the housing solutions.
All in all, through our growth investment, UPM and its subcontractors will create 4,000 new direct jobs through the value chain, as well as approximately 6,000 induced jobs and a 2% increase in GDP for the Uruguayan economy. Combined with the existing operations, UPM operations in Uruguay will directly employ 7,000 people, generate 10,000 induced jobs, contribute to 3,4% of Uruguay’s GDP, and drive the development of 150 communities in 14 regions of the country.
Major capacity growth
On 26 May, 2023, the first full shipment of about 50,000 tonnes of UPM Euca pulp combined from our Fray Bentos and Paso de los Toros pulp mills successfully set sail towards Asia. The shipment was loaded to completion at our highly specialised, fit-for-purpose pulp terminal in the port of Montevideo. Currently, we are proceeding with the Paso de los Toros mill’s ramp-up phase, gaining operational stability and increasing capacity towards the nominal annual production capacity of 2.1 million tonnes.
The new mill represents a major development for both UPM and our customers, as we are able to more than double our yearly production of eucalyptus pulp. Over the years, we have developed a solid platform in Uruguay and earned a place in the industry with consistently high-quality eucalyptus pulp from the Fray Bentos mill. I fully expect our new mill to gain a similar position, as we strive to provide value to our customers and opportunities to grow together in the years to come.
Marcos Battegazzore
VP, Pulp & Forestry operations
UPM Uruguay
