In October, Uruguay’s government granted free trade zone status to the project, under which the company’s local subsidiary, Botnia Fray Bentos, will pay an agreed annual fee for free trade zone status. “This decision will ensure the stability of Botnia’s customs and tax treatment in the long term,” according to the company.

Botnia began studying the possibility of starting pulp production in Uruguay in 2003 and eventually chose Fray Bentos, a town of about 20,000 people. It completed an environmental impact assessment in the first part of 2004 and has begun its recruitment process.

The aim of the mill is to guarantee competitive availability of pulp, which is used in large quantities by Botnia’s Finnish owners, UPM-Kymmene Corporation and M-Real. UPM is one of the world’s leading producers of printing papers and the market leader in magazine papers.