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Pulp facts to the fore in Montevideo

Major investments are going ahead in Uruguay as UPM boosts its production and supply chain offer

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UPM will invest US$280M in a new terminal in Montevideo, and a further US$70M in associated upgrades
UPM will invest US$280M in a new terminal in Montevideo, and a further US$70M in associated upgrades

Leading forestry products group UPM has got the go-ahead from Uruguay’s National Port Administration (ANP) to develop a dedicated cellulose export terminal in the Port of Montevideo.

This follows closely on the heels of UPM finally obtaining approval from the Uruguayan government to build a eucalyptus pulp mill at Paso de los Toros in Pueblo Centenario, in central Uruguay (WorldCargo News, February 2019, p25).

As reported then, planned capacity of the new mill is 2.1 Mtpa, much higher than UPM’s existing Fray Bentos facility, which has a capacity for 1.3 Mtpa of bleached eucalyptus pulp.


UPM is set to invest US$2.7B in the new mill, along with US$280M in its dedicated terminal in Montevideo and a further US$70M in new infrastructure in Paso de los Toros. The port concession is for 50 years, with provision to extend it. The operating licence is to handle cellulose and derivatives, related chemical products, and import equipment necessary to support the mill once it is in operation.

New railway link

The government has said it plans to build a new 273 km railway linking Paso de los Toros to Montevideo. In May, Uruguay’s President Tabaré Vázquez announced that the Inter-American Development Bank (IDB) had agreed to provide 50% of the funding needed to build the new US$1B Ferrocarril Central railway.

The railway link between the mill and the terminal is considered a vital part of the project’s sustainability and, said Javier Solari, project VP for UPM Uruguay, will also help the development of several agribulk sectors.


Montevideo’s deep water will ensure that large bulkers deployed in the forestry trades can be fully loaded at the terminal. Depth alongside the berth will be 14.5m. To facilitate general port truck traffic, a new viaduct will be built in front of Dock C.

The throughput capacity of UPM’s new Montevideo terminal has not been divulged. However, Victor Rossi, the minister of transport and public works, stated that, currently, part of the output of the pulp mills in Fray Bentos and Conchillas has to be shipped from ports outside Uruguay. This implies that all exports could be handled through the new terminal.

Typically, quayside handling would be performed by shipboard gear, supported by mobile harbour cranes with different attachments to handle multiple pulp bales, containers and outsize loads. A fleet of clamp trucks and FLTs will be required for warehousing and wagon destuffing duties, along with terminal tractors and trailers for internal transport. Reach stackers will probably be used to handle containers.


Santos ‘cluster’

Elsewhere on the ECSA, a 180,000 m2 area in the Port of Santos between Macuco and Ponta da Praia, which previously formed part of the now defunct Libra Group container handling concession, is to be let out on a transitional contract for the pulp industry.

Casemiro Tércio Carvalho, CEO of the São Paulo state port administrator Codesp, said that studies will be undertaken to allow a new long-term lease to go ahead, and these will be completed by end of this year. In the meantime, a temporary operating contract will be offered. Documents are expected to be signed in the second half of this year, if the go-ahead is given by the National Waterways Transport Agency (Antaq).

Libra Group ceased operations on 28 April this year, since when, part of its area has been used as a bonded warehouse. Codesp had wanted to offer it as a long-term concession, although judicial intervention ruled that this was incompatible with the judicial recovery process, and that the lease will expire in May 2020.

Carvalho stressed that several companies have indicated an interest in the area, given that Codesp wants to create a cluster dedicated to pulp, thereby meaning operators no longer have to fight for space in the port. The current scramble for more operating area is, he said, “a calamity”. By creating a pulp cluster, he added, pulp belonging to different companies can be conveyed in the same vessel.

Carvalho’s approach subsequently received the backing of Diogo Piloni, at the time the national secretary of ports and waterways at the Ministry of Infrastructure (Minfra). He said that the former Libra Terminais site should be retendered as two forestry pulp terminals.

He said studies show there is a definite demand for this type of traffic. The government is therefore to put this out to public consultation in the coming weeks. Piloni has since been appointed chairman of the Board of Directors at Codesp, so it looks like everybody is singing from the same hymn sheet.


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