Ence Finds New Site for Proposed Uruguay Pulp Mill

Dec 13, 2006 - Spanish pulp, paper and wood products producer Ence yesterday announced a new location for its planned 500,000 ton per year pulp mill in Uruguay after Argentina complained it would harm tourism and the environment at its original site on the Argentina-Uruguay border.

Argentina's government said it was pleased with the new location, which Ence president Juan Luis Arregui and Argentine Cabinet Chief Alberto Fernandez revealed at a joint news conference in Buenos Aires.

"The Argentine government wants to express its sincere gratitude to Ence for the attitude it has taken," Fernandez said.

"The plant definitely will have the best production standards and the environmental impact will be minimal, well below the levels accepted by Uruguay's national environmental body," Fernandez said.

The new site is at Punta Pereira near the north shore of the wide Rio de la Plata river, about 37 miles (60 km) downstream from where the Uruguay River feeds into the Rio de la Plata. It is also downstream from the original site at Fray Bentos on the Uruguay River.

Ence said in October it would put the EUR 930 million plant somewhere other than Fray Bentos, but still in Uruguay. At the time it said the relocation did not have to do with the growing problems between Argentina and Uruguay over the plant.

“We are not relocating because of the conflict, we are relocating because, in terms of manufacturing processes, it is impossible to build two pulp mill in Fray Bentos,” Arregui said in October.

“These two plants would need 6 million tonnes per year of fiber. A truck load is 30 tonnes, so that’s 200,000 trips in a year, going up and down the same roads. And that’s just the wood. Pulp dispatch would be about a third of that,” Arregui added.

Finnish company Metsa-Botnia is still building its own pulp mill at Fray Bentos, which has been the source of bitter disputes between Argentina and Uruguay.

Residents of Gualeguaychu have blocked a main bridge leading to Uruguay during many weekends this year to protest the Botnia plant, which can be seen on the other side of the Uruguay River.

The Argentine government is concerned about contamination and the plant's impact on tourism and fishing, while Uruguay insists the project is environmentally safe.

Both sides have turned to an international court and, with no end to the conflict in sight and desperation rising, Uruguay last week sent troops to the Botnia plant, fearing sabotage by protesters.

SOURCE: Reuters, Industry Reports

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