UPM Paso de los Toros right on track
UPM’s new pulp mill in Uruguay has moved successfully from ramp-up phase to full capacity. As part of UPM’s entire forestry value chain the mill has various positive impacts on the local economy and regional development.The UPM Paso de los Toros pulp mill achieved an important milestone in the first half of this year when it reached full nominal capacity – a month before its first scheduled maintenance shutdown in June. With an annual production capacity of 2.1 million tonnes of eucalyptus pulp the mill increases UPM’s pulp capacity by more than 50%.
According to Marcos Battegazzore, VP Pulp and Forestry Operations at UPM Uruguay, the first 18 months in operation have been an intensive period, requiring a steep learning curve. All activities and services including subcontractors along the entire value chain – from tree nurseries and harvesting to maintenance and logistics – are now up to speed.
“The start-up and ramp-up periods of a pulp mill are kind of a discovery phase where you find out which things were perfectly implemented during the design and installation phases, and where there is need for adjustments and improvements. We are now in the normal running phase and looking forward to seeing the full potential of the mill,” Battegazzore says.
He adds that the shutdown was a complete success, and the overall stability of the mill has been at very good level after starting up again.
“Maintenance shutdowns are important in securing stable, safe and environmentally sound operations. We have continued to develop and fine-tune our production and have been running consistently even above the designed capacity for the last few months,” Battegazzore notes.
Connection to the world
Although UPM has accumulated a great deal of experience and know-how from operating the Fray Bentos pulp mill now for almost 20 years – and managing forestry operations in Uruguay for over three decades – the Paso de los Toros mill is a unique setup especially regarding its logistical platform.
Because of the mill’s inland location, the rebuilt and improved railroad connecting the mill to the new deep sea pulp terminal in the port of Montevideo is an essential part of the supply chain. The state-owned railroad is part of the Uruguayan government’s infrastructure plan, executed as a public-private partnership. While the 273-kilometre rail connection was being renewed trucks have been used for transporting pulp to the port.
“We have progressed this year as planned by gradually ramping up the train deliveries in quarterly phases. In May the first pulp transport by rail was successfully delivered from Paso de los Toros to Montevideo, and we have since increased the amount of pulp transported by train on a weekly basis. By the end of the year we are aiming to have shifted fully from trucks to rail, with four to five daily trains travelling between mill and port,” Battegazzore explains.
The first shipment of pulp from UPM’s pulp terminal in Montevideo sailed in May 2023, and all operations have worked smoothly since the beginning, Battegazzore says.
“We have so far loaded more than 60 ships and delivered pulp to all of our market areas – APAC, North America and Europe – and also regularly receive shipments of chemicals for pulp production, such as caustic soda and sulfuric acid.”
UPM Euca from two top class mills
A key factor behind the smooth progression of the Paso de los Toros project has been the UPM Fray Bentos pulp mill and its expert staff, some of whom have relocated to the new mill. They have also been an invaluable resource in training new mill operators. Fray Bentos recently reached a milestone of its own by producing the mill’s 20 millionth tonne of UPM Euca pulp.
“We’re proud of how the Fray Bentos mill has consolidated itself as a benchmark in the field and how, in fact, it launched the entire modern pulp industry in Uruguay. Initially there were many questions raised locally, for example, regarding the environmental impacts and safety of the industry, but our professional organisation was quickly able to demonstrate the mill’s solid performance in all aspects,” Battegazzore notes.
He emphasises that the goal from the very beginning has been to make sure that the quality of UPM Euca is exactly the same from both mills.
“In terms of quality parameters and papermaking properties, it’s important that our customers can rely on the consistency of the product. Much of this is of course due to the consistent quality of the raw material and optimised mix of eucalyptus species established on our plantations.”
Roots of forest industry in progressive legislation
UPM’s history of planting eucalyptus in Uruguay dates back to 1990 – almost to the beginning of the plantation forestry industry in the country. The national forest law passed by the Uruguayan government in 1987 was aimed at diversifying the country’s land use and industrial structure and advancing the protection of native forests.
Lucia Basso, Chief Executive Director of Plantesia, a company specialised in timberland assets management in South America, explains that the law, based on the Uruguayan soil classification, created an excellent plan for a pioneering land management programme. This helped to identify forest priority soils that had low fertility for traditional uses such as cattle grazing but with good potential for forestry.
“This development was further supported with tax exemptions and subsidies, which are no longer in force, targeted at the forest industry – they helped to attract investments,” Basso says.
She considers these measures to have been highly successful as today forestry is Uruguay’s leading export industry, with a total value of almost USD 3,000 million, representing 6% of the country’s GDP.
“The sector has grown so that we have reached just over 1 million hectares of planted forests. Despite this, forests currently use only around 6% of the land area. Originally about 4 million hectares of forest priority soils with low productivity for other agricultural activities were identified, so there is still plenty of room for the sustainable growth of forestry,” Basso estimates.
Besides heading Plantesia, Basso is president of SPF (Sociedad de Productores Forestales), the association of forest owners in Uruguay. Providing a network for different operators within the field, the association is also involved in, for example, areas such as forest fire prevention, research, communication and labour-related legal issues.
Positive social impacts of sustainable forestry
Investments into forestry have created jobs, export income, educational opportunities and better transport connections and services for Uruguay, especially in rural inland areas. The Paso de los Toros pulp mill project impacts most strongly on the relatively less developed central and north-eastern regions in the country.
In the case of the pulp industry the entire value chain from wood supply to logistics is located in Uruguay. UPM’s operations alone represent more than 3% of Uruguay’s GDP.
“Forestry is one of the sectors that has best integrated all its phases into a production chain, from the primary silvicultural phase to industrialisation and commercialisation. In addition to horizontal integration with transportation and logistics, R&D and technology,” Basso points out.
Having recently travelled to Finland for the first time, Basso was impressed with her visit to a local forest and experiencing Finnish forest management practices first hand. She says comparing Nordic forests to Uruguayan plantations isn’t really possible – mainly because native Finnish forests are managed with up to 80-year rotations, while eucalyptus plantations are harvested every 10 to 12 years. However, the principles of sustainable forest management are exactly the same.
“UPM’s sustainable forestry concept supports both environmental and social aspects, ensuring the quality of operations with the consequent care for natural resources as well as the safety of workers,” Basso notes.
Successful team effort
UPM’s total value chain in Uruguay – including plantation operations, both pulp mills, related logistics and contractors – has created approximately 7,000 direct and 10,000 induced jobs in the country. According to Marcos Battegazzore, UPM’s own staff at the Paso de los Toros site has grown from about 500 to currently approximately 850 people working at the mill daily. He wants to give thanks to the entire operations team in Uruguay for making the largest investment in UPM’s history a success.
“This has obviously been a major exercise for both our own teams and external operators. I’m extremely happy with the collective success we have so far achieved and will together continue the process of continuous learning and improvement,” Battegazzore concludes.