Financial crisis puts crimp in ENCE big Uruguayan pulp plan

Wednesday, 18 February 2009

The global financial crisis has put a crimp in the plans of Spanish pulp company ENCE to build a million ton a year pulp plant in Uruguay.
It's reported ENCE has told officials in Uruguay plans for a million-plus ton pulp plant in the small Latin American country will go on hold until an investment partner can be found.
Media reports in the Uruguay capital, Montevideo, said that ENCE had, however, rejected any suggested it was abandoning the whole operation at this stage, Morcosur reported.
It was reported that the mayor of Colonia - where the plant was to be built - Walter Zimmer said he had met with an ENCE delegation.
He said they had hold him they “would continue with the essentials to keep the free trade zone status and construction permits for the foundations of two jetties, but the whole operation in Uruguay will be delayed and the plant is to be postponed.”
ENCE delegates said that an associate was needed “to share the volumes and cost of the operation” since pulp prices internationally had plummeted 50% and “we need to share the investment.”
However, Zimmer is quoted as saying the delegates said that “six potential partners in the industry have expressed an interest”, so there were no chances of abandoning the project.
In January this year, ENCE informed the Madrid Stock Exchange that it was looking for a partner to share the Uruguay project, “given the new context of the world market”.
The Punta Pereira project of a million plus tons of pulp required an investment of more than a billion Euros of which ENCE has already spent 250 million.