Uruguay. Botnia S.A.

The loan totalling USD 70 million is granted for financing Botnia’s investments in building a state-of-the-art, single-line bleached eucalyptus pulp mill in western Uruguay. The mill’s capacity will be approximately 1 million tonnes a year. Besides the construction of the mill, the port facilities and the forestry operations will be upgraded and expanded by Botnia’s sister companies. The entire output will be exported.

With the total investment standing at USD 1.2 billion, this is the largest single foreign industrial investment project in Uruguay’s history and the largest investment a Finnish company has ever made abroad. It is estimated that the new pulp mill will, directly and indirectly, create 4,500 new jobs during the construction stage and 300 at the operational stage.

The project is expected to help increase the country’s GDP by 1.5%. Botnia S.A. is a project company with Finnish Metsä-Botnia as the majority shareholder. Metsä-Botnia, operating five pulp mills in Finland, is Europe’s second largest pulp producer.

Uruguay is one of very few locations in the world where already existing plantations can supply the raw material for a new pulp mill of this scale. The mill will be supplied with wood from plantations about 200 kilometres northwest of the mill site. No natural habitat will be destroyed by the establishment of new plantations.

Processed pulp will then to be transported by barge to an export terminal located further down the Uruguay River. The mill will produce pulp using a conventional kraft pulping process, with chlorine dioxide used in an elemental-chlorine-free (ECF) bleaching process.

It is acknowledged that the new pulp mill’s operations will cause a major change in the local environment. As its principal objective, the project’s design is aimed at minimising and mitigating the potential negative impacts of the operations.

Detailed studies have been developed to quantify the environmental and social impacts. The project is designed and operated in accordance with the Uruguayan environmental legislation, the World Bank’s Environmental Guidelines as well as international standards and recommendations for modern pulp mills, such as the Best Available Techniques (BAT) defined by the EU Integrated Pollution Prevention Control Bureau.

Liquid effluents will be comprehensively treated via a biological wastewater treatment plant using an activated sludge process. The atmospheric emissions collection and treatment system includes incineration, electrostatic precipitation for dust abatement, and a scrubber gas washer.

The company will implement a comprehensive Environmental Management System to cover all of its operations, and this is expected to be certified to ISO 14001 and OHSAS 18001 standards. As part of its environmental management system, the company will have formal plans for handling of hazardous materials used in the process, as well as an emergency response plan to deal with accidents, spills and other upsets.