Large-scale pulp production in the heart of Uruguay 

At the end of May 2023, the largest investment in the history of UPM, the Finnish forest industry and Uruguay culminated in the start-up of the new UPM Paso de los Toros pulp mill. In addition to the eucalyptus pulp mill, the project has included the construction of a pulp terminal in the deep seaport of Montevideo, as well as local infrastructure and facilities, such as roads and housing. The total investment value is USD 3,47 billion. 

The implementation of the giant project required exceptional perseverance, as the project was already well underway when the COVID pandemic struck in the spring of 2020. National restrictions, strict regulations on construction sites, as well as quarantines and logistical challenges brought about by the pandemic put the project organization through quite a stress test. The situation was overcome by combining Finnish grit and Uruguayan positivity to create new operating models. 

Perseverance and creativity were also needed to transport the machinery, equipment and structures required for the construction of the UPM Paso de los Toros pulp mill to the mill site inland in Uruguay. Extensive cargo transfers were carried out during 2021, coordinated with national authorities. UPM was responsible for several road infrastructure improvements, including the construction of 28 bypasses and the rehabilitation of roads, routes and bridges. 

Record investments in ecological rail infrastructure

The construction of the UPM pulp mill triggered the Uruguayan government's massive investments in logistics infrastructure. The reconstruction of the railway from Paso de los Toros to the Montevideo port terminal has been one of the most significant infrastructure projects in Uruguay's history, implemented through public-private partnership.  

The renewed and improved railway connecting UPM Paso de los Toros pulp mill and the Montevideo port terminal will create an efficient supply chain to global markets. UPM estimates that it will operate six trains per day, each carrying 1664 tonnes of pulp. The Montevideo pulp terminal has five tracks leading directly to the Paso de los Toros mill. 

The first UPM trains to Montevideo are scheduled to enter service this year. 

Rail transport is the most environmentally friendly way to move pulp from Paso de los Toros to the port of Montevideo – emissions are eight times lower than trucks, six times lower than barge transport and three times lower than average freight trains. 

Growth in all markets 

UPM's growth project in recent years has created a competitive industrial operating model in Uruguay, ensuring the supply of wood from responsibly managed plantations, deliveries of eucalyptus pulp from two mills that meet uniform quality requirements, and efficient logistics. This is a significant step in the company's growth strategy and strengthens its position as a global leader in pulp and paper.  

Starting in December 2023 as head of UPM's pulp, sawmill and forest business, UPM Fibres Aki Temmes believes in the growth of the pulp market, especially in the areas of tissue and specialty papers used in hygiene products and packaging materials. In addition to the main markets of Europe and China, growth is also sought in North America. 

“With the expansion of our operations in Uruguay, we have started to sell pulp to North America and have established our own sales and customer service team there. The eucalyptus we bring to the market differs in quality characteristics from locally produced short-fiber pulp. We have good opportunities to develop a profitable market there,” says Temmes. 

Side streams for utilization 

The world is becoming increasingly greener and more sustainable, while urbanization and a growing middle class are increasing demand for hygiene and other consumer products and packaging made from pulp. This means that the wood raw material coming to UPM's mills is used efficiently, down to the last stick. 

Pulp and the side streams and residues generated in pulp production are already being utilized in completely new types of products. These include, for example, UPM BioVerno diesel produced in Lappeenranta from crude tall oil, a residue of pulp, as well as biomedical products made from pulp, such as hydrogel for cell culture and biodegradable wound dressing. There are still countless new opportunities, and in the future, pulp can also be an enabler of many new businesses based on side streams. 

“During the first few months, I have already traveled to several locations and countries, meeting and listening to Fibres colleagues, customers and other stakeholders. The business operations have done very good work in recent years and now we need to continue from the weaker cycle by focusing on good performance. I believe that in the long term we have very strong foundations for growth,” Temmes assures.