The Helsinki-based company said in a statement the new 2.1 million-tonne mill will be located in central Uruguay and will raise UPM's pulp making capacity by more than 50% after it comes online in the second half of 2022.
"The prerequisites for the investment have been carefully prepared in cooperation with the state of Uruguay," UPM said. The company, one of the world's largest paper product and pulp producers, said the main driver for the investment was the bright industry outlook and expected brisk demand for pulp, particularly in the Asian market.
UPM said its strong growth expectations are based on "global consumer megatrends that drive the demand for tissue, hygiene, packaging and specialty papers." In addition, UPM said it would invest $350 million in port operations in Montevideo - the Uruguayan capital from where the pulp will be shipped onwards - and local facilities in Paso de los Toros, the site of the plant, including a residential area for the employees.
Citing independent studies, UPM said the new mill is estimated to increase Uruguay's gross national product by about 2% and the annual value of the nation's exports by approximately 12% after completion.
Some 10,000 new permanent jobs are expected to be created, of which some 4,000 directly employed by UPM and its subcontractors.