May 15, 2020 / 4:47 PM / in 13 days

UPM agrees investments in Uruguay to support new $3 bln mill

May 15 (Reuters) - Finnish forestry group UPM said on Friday it had signed a memorandum of understanding with the new government in Uruguay to invest in the country’s road and power grid networks, as part of the company’s $3 billion spending on a new pulp plant.

UPM said the deals included a $60 million investment in road infrastructure and $68 million in the electricity grid.

The Finnish firm decided last year to invest $2.7 billion in the new mill, which will boost its pulp production capacity by over 50%, and spend a further $350 million on supporting infrastructure.

UPM’s plans in the region - home to several wood pulp plants thanks to a beneficial climate for eucalyptus trees - are part of its shift from a declining print paper market to pulp, which is expected to grow due to rising demand for tissue and packaging board.

UPM said it also planned to invest $25 million in a new eucalyptus nursery in central Uruguay. (Reporting by Tarmo Virki in Tallinn; Editing by Mark Potter)

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