(UPM, Helsinki, 23 July 2019 at 11:15 EET) – UPM has today made the investment decision to construct a 2,1 million tonne greenfield eucalyptus pulp mill near Paso de los Toros in central Uruguay. The highly competitive mill investment of USD 2,7 billion will grow UPM’s current pulp capacity by more than 50%, resulting in a step change in the scale of UPM’s pulp business as well as in UPM’s future earnings. Additionally, UPM will invest USD 350 million in port operations in Montevideo and local facilities in Paso de los Toros. The mill is scheduled to start up in the second half of 2022.
The prerequisites for the investment have been carefully prepared in cooperation with the state of Uruguay. For UPM, it has been important to ensure sustainable, competitive operations long-term and to minimise risks both in the project phase and during continuous operations. For Uruguay, the project and the infrastructure development offer significant opportunities for economic and social development.
“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. 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,” says Jussi Pesonen, President and CEO of UPM.
Competitive wood supply
The eucalyptus availability for the mill is secured through UPM’s own and leased plantations as well as through wood sourcing agreements with private partners. Over 30 years of experience in plantation operations secures well managed and productive plantations without making compromises on sustainability. Today, the plantations that UPM owns and leases in Uruguay cover 382,000 hectares. They will supply the current UPM Fray Bentos mill and the new mill near Paso de los Toros.
Efficient logistics set-up
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. These infrastructure investments also support economic activity in other sectors in Uruguay. Initial works on the central railway have been started and financing of the railway construction consortium is proceeding but is yet to be finalised.
UPM has decided the construction of a deep-sea pulp terminal in Montevideo port with an investment of approximately USD 280 million. Direct rail access from the mill to a modern deep sea port terminal creates an efficient supply chain to world markets. Montevideo deep sea port also enables synergies in ocean logistics with UPM’s existing Uruguay operations as all pulp can be delivered in full vessels directly to main markets.
UPM plans to enter into port terminal concession and rail logistic services agreements that will be recognized as lease assets and liabilities under IFRS 16 Leases. The total amount of such lease assets and liabilities is expected to be USD 200 million.
Ref.www.upm.com
Comentarios