Demand for sustainable eucalyptus pulp continues to grow and UPM is looking for opportunites to grow in pulp business. This is why UPM and the Government of Uruguay have agreed on the fundamentals for a potential new pulp mill investment in central Uruguay.

The Investment Agreement, signed 7 November 2017, defines the requirements for the operating environment of a world-class pulp mill project. It details the roles, commitments and time-line for both parties as well as the relevant items to be agreed prior to UPM's final investment decision.

If all goes to plan, Uruguay could be a competitive alternative for UPM to address the global pulp market opportunities in the 2020s.

UPM Uruguay map focus
UPM Uruguay infrastructure
UPM Uruguay eucalyptus
UPM Uruguay potential new pulp mill

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​Impacts of a potential new pulp mill to Uruguay
The indicative figures are based on the study 'Economic Impact of UPM’s Operations in Uruguay' by CPA Ferrere, May 2016

new jobs
throughout the
value chain

MUSD 200
in salaries
annually throughout
the value chain

MUSD 120
tax collection
annually throughout
the value chain

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Impacts to central and north-eastern regions

Exports of
MUSD 1,100
+12% increase

Permanent increase
of approx.
2% of GDP

 small and
medium sized
  local enterprises

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​Impacts to central and north-eastern region

Impacts of a potential new pulp mill to Uruguay

Training and
for permanent jobs

New skills and opportunities
for people
in rural areas


closer to
Montevideo port

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How would environment benefit lab

​Concrete tools and
best practices to
improve environmental

​Possibility for practical
and sustainable actions
around the
Rio Negro basin

How would environment benefit river

Robust infrastructure is the foundation for industrial development. The Government of Uruguay will develop the country’s inland rail and road network that will enable new business opportunities, such as cost-efficient transportation of pulp, grain, wood products and containers.

Often considered the safest and most environmentally friendly form of heavy transport, railway offers a competitive alternative for all its users.

UPM’s products would provide the base volume for the rail. Like all users, UPM would pay for the use of the railway.

UPM Uruguay infrastructure freight train

UPM Uruguay infrastructure road and port


  • Improvements and maintenance to allow year-round use
  • Efficient wood transportation with combined high capacity vehicles


  • Modernisation to meet the latest standards
  • Accessible for public and private operators


  • Deep sea port of Montevideo to be suitable for fully loaded ocean vessels
  • Railway connection to the port

​Current UPM operations 

Current UPM operations

​Growth opportunity

Uruguay prospect

EUR 2 billion

​                  Approx.                  2 million tonnes
annual capacity
of eucalyptus
market pulp

UPM Uruguay map geography
UPM Uruguay plans for new pulp mill

​The preliminary investment estimate for the pulp mill construction on site is EUR 2 billion.

The single line pulp mill with proven environmental performance and best available techniques (BAT) would have a production capacity of approx. 2 million tonnes of eucalyptus market pulp annually. This would make it the largest single line pulp mill in the world.

The pulp mill would be located in the department of Durazno on the southern side of the river Rio Negro, 4–5 km downstream from the city of Paso de los Toros and Centenario village.

The location is subject to the regulatory approvals from the various agencies involved, and the socio-economic and environmental impact assessments.

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​In addition to the initial on-site investment, a successful project requires off-site investments

UPM infrastructure log truck
  • Plantation land, forestry, nursery capacity

  • Harvesting and transport equipment

  • Road network for forestry operations

  • Wood transportation contractor network

  • Training

  • Rolling stock for rail

  • Electricity infrastructure

  • Export facilities

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UPM’s process for the possible new pulp mill consist of three phases.

The second preparation phase consists of three gates for the implementation of the IA.

Following graph is showing the status of the implementation of the IA
The content is based on the IA and mainly Annex 2 
Each arrow describe main actions 
Implementation is described by colours:
Green: implemented
Yellow: in progress
Grey: not started
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​UPM Uruguay

Av. Italia 7519 Piso 2
Edificio Blue, Art Carrasco Business
11.500 Montevideo

Phone: (+598) 2604 6660
Fax: (+598) 2604 5406