Helsinki, Finland, 18 January 2011 -- Stora Enso's and Arauco's joint-venture company, Montes del Plata, will build a new state-of-the-art 1.3 million metric tons per year pulp mill at Punta Pereira, in the department of Colonia, Uruguay. The total investment is estimated to be approximately USD 1.9 billion (EUR 1.4 billion).
Each of the joint-venture shareholders has a 50% stake in the mill's equity and will be entitled to half of its output. The project will be financed about 40% through equity and about 60% through loans raised by Montes del Plata. Stora Enso is consolidating its 50% share with the equity method.
The project comprises a state-of-the-art, best available technologies pulp mill; a deepwater port; and a power generating unit based on renewable resources. The new mill is expected to be operational by the end of the first quarter of 2013.
Eucalyptus pulpwood for the mill will be sourced from Montes del Plata's own plantations. The company currently owns 254,000 hectares of forestland in Uruguay, of which 138,000 hectares are planted, about 100,000 hectares are protected, and 16,000 hectares are suitable for planting. The project also will be of value for the economic and social development of Colonia and Conchillas, where the company is committed to an environmental performance of excellence and to working with the local authorities and the community.
“Low cost plantation-based pulp is one of the cornerstones of our strategy. Our investment is a concrete step in implementing this strategy to build the future of our Group. The Uruguayan government authorities both nationally and locally have been a welcoming supporter to Montes del Plata. We look forward to implementing the project in close co-operation with them. We are also proud to invest together with a great partner like Arauco and have a joint vision of building something in Uruguay that will be a role model for the world,” said Jouko Karvinen, CEO of Stora Enso.
“We are extremely happy to see this investment becoming a reality. It is the result of hard work by the team of Montes del Plata, strong support from the shareholders Stora Enso and Arauco, and seamless co-operation between the company and the Uruguayan and Colonia authorities. A new stage is beginning in which we will strive to build a project of excellence,” said Erwin Kaufmann, CEO of Montes del Plata.
The new pulp mill will be the largest-ever privately executed investment in Uruguay. The construction and operation of the pulp mill will have significant economic and social effects in the country. An average of 3200 and a peak of 6000 workers will be employed during construction and about 500 people are expected to work at the mill once it is operational. The mill is forecast to have a positive impact on Uruguay's GDP of 0.8% during construction and 2% when it is operating.
Stora Enso is a global paper, packaging, and wood products company producing newsprint and book paper, magazine paper, fine paper, consumer board, industrial packaging, and wood products. The Group is a world leader in forest industry sustainability. Stora Enso is listed in the Dow Jones Sustainability Index and the FTSE4Good Index. Stora Enso employs some 27,000 people worldwide, and had sales in 2009 amounting to EUR 8.9 billion. Stora Enso shares are listed on NASDAQ OMX Helsinki (STEAV, STERV) and Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs (SEOAY) in the International OTCQX over-the-counter market.