Finnish company UPM said Tuesday it will go ahead with plans to invest more than US$3 billion to build a eucalyptus pulp plant in Uruguay.
The plant will begin functioning in the second semester of 2022 and construction is set to begin “immediately.”
The company will spend US$2.7 billion to set up the plant itself andUS $350 million on river port and logistical facilities.
The company already operates one such plant in Uruguay. It was highly contentious because it is located on the Uruguay River, which forms the border with Argentina, which sued over the potential fallout to the waterway.
The International Court of Justice sided with Uruguay and declined to halt construction of that facility.
UPM has promised to create thousands of jobs in a country that is experiencing growing unemployment, with an unemployment rate of 8.7 percent and the employment rate (the percentage of people of working age that have jobs) of 56.8 percent.
“During construction, the industrial site with employ, at its peak, 6,000 people. Once it is finished, we estimate that it will create around 10,000 permanent jobs,” the firm said in a press release.
The left-leaning government of Uruguayan president Tabaré Vázquez negotiated with UPM over the proposed second plant which will be installed on the primary internal river of the country, Río Negro.
Terms of these talks were never disclosed.
Environmentalists have raised concerns over the effect on the river and opposition parties have questioned what economic and labor concessions the company may have granted to UPM.
Cellulose is one of the countries biggest exports and in 2018 it exported US$1.660 million of the substance.
According to the UPM, the investment could generate two percent annual increase in GDP and a 12 percent increase in exports.