This is a lengthy tale but bear with me.
PART 1 . The Globalistas
Oy Metsä-Botnia Ab - was founded in 1973, and is jointly owned by :
M-real Oyj, is a high quality paper producer with headquarters in Espoo, Finland, and a presence in over 70 countries and approximately 15,500 employees with sales revenues of 5.2 BN Euros.
Metsäliitto Osuuskunta, the tenth biggest forest industry group in the world /wood supply / wood products industry / pulp production /and tissues, With sales of 8.6 billion euro they have 30,000 employees in 30 countries. Metsäliitto Cooperative is a cooperative organisation for Finnish forest owners and has over 130,000 members.
UPM-Kymmene Oyj. have 22 paper mills in eight countries: Austria, Canada, China, Finland, France, Germany, the UK and the USA, 31,000 employees and sales of 8.6 Bn Euros to 3,200 customers in 120 countries. The company was the result of merging 3 major Finnish paper manufacturers and The new company started its operations May 1, 1996. They are quoted on the Helsinki and NY stock Exchanges.The first quarter profit in 2006 was 181 Mn Euros.
The joint company Oy Metsä-Botnia Ab have pulp mills in Finland in Joutseno, Kaskinen, Kemi, Rauma (which uses chlorine free technology (TCF)), and Äänekoski it manufactures high quality bleached pulp grades from softwoods, birch, and aspen pulp tissue.under the name Botnia. Botnia's pulp grades have been developed for the manufacture of high quality printing papers, folding box boards, and tissue.
Large-scale eucalyptus plantations were introduced in Uruguay in 1988, promoted mainly by the World Bank and the Inter-American Development Bank (IDB), with the active participation of forestry companies to replace hardwood logging.
At the time, the price of pulpwood on the world market was $60 a ton (it is now $23 to $28 per ton,)and Botnia established a company in Uruguay Compañia Forestal Oriental S.A. (FOSA) in Uruguay, which was first established by Shell/Kymmene to promote eucalyptus cultivation which had commenced planting in 1991. Eucalyptus is a genus of trees confined originally to Australasia , however the fast growth of eucalyptus plantations (8 years to harvest at up to 90 feet high - which relates to extreme water demands) provides low cost high quality feedstock for bleached hardwood pulp. FOSA with partners UPM (38.6 %) and Finnfund (1.4 %) own 100.000 hectares of land (400 sq. miles) , of which 60.000 is good-quality eucalyptus forest that has been planted on grassland. FOSA is one of the three big forest owners in Uruguay and is certified under under the FSC standard (Forest Stewardship Standard).
María Selva Ortiz of REDES - member of the Friends of the Earth non-governmental environmental network says foreign-owned large-scale plantations of eucalyptus occupy more than 700,000 hectares (2,700 square miles) in Uruguay.
In conjunction with this investment it was decided to build a pulp mill at Fray Bentos (pop 20,000) on the Uruguay River, which is Argentine / Uruguay border. An environmental impact assessment for the pulp mill as well as an evaluation of its socio-economic impacts were started in November 2003.
This US$1 Bn. pulp mill project is the biggest industrial investment in Uruguay's history and is estimated to grow Uruguay's GNP by 1.6 per cent. The project is also the biggest industrial private sector investment by Finland abroad.
The plant will incoporate a Kyoto Protocol / Clean Development Mechanism (CDM) 32 MW biomass-based low carbin emission electricity generator on the mill site using the latest technology to use black liquor from the pulping process for steam and electricity generation in the recovery boiler. This saving in greenhouse gases translates into sales / income when traded against the European Emissions Trading Scheme (ETS).
This project is designed to generate surplus electricity which can be used outside the mill site. The amount of surplus electricity is estimated at 270 GWh annually. Enough to supply the electricity needs of 150,000 Uruguayan homes.
Another major transnational corporation, the U.S.- based forestry giant Weyerhaeuser, with partner Global Forest Partners a US based forest investments house, has purchased roughly 135,000 hectares (521 square miles) mostly grassland, since 1997. Two-thirds of it has been planted with loblolly pine and fast-growing eucalyptus and recently announced plans to invest $1.2 billion to expand its Uruguayan pulp operations.
Weyerhaeuser (NYSE: WY) is a multinational corporation based in Washington, United States. The company is now the second largest pulp and paper company in the world, soon to be second, with the acquisition of Domtar Inc. on August 23, 2006 $3.3 billion US cash-and-stock deal. Thye have manufacturing operations in the United States, Canada, Australia, New Zealand, China, Mexico, Ireland, France and Uruguay, among others. It is the world's largest private owner of softwood timberland, managing 38 million acres (154,000 km²) in five countries.
It is the third largest owner in the United States, behind Plum Creek Timber and International Paper of timber lands. Weyerhaeuser has approximately 55,200 employees in 18 countries (primarily in the U.S. and Canada).
Finnish group Stora Enso (quoted on Helsinki / Stockholm exchanges and ADR's NYSE) have sales of 13.2 Bn. Euros in 2005,with 46,000 employees in more than 40 countries on five continents.The company has been buying land in the Rio Negro region (250 KM from port of Montevideo) region and have assembled to date at least 56,000 hectares and are planting 50% eucalyptus and 50% pine. They already have established Veracel in Brazil with their Brazil-based partner Veracruz with a plantation / pulp mill which came into operation last year with 5 500 employees and annual pulp production 900 000 tonnes of pulp annually (to reach 1 150 000 t/y) and 79 000 ha of their own plantations. Veracel 2 in Rio Grande do Sul is on the drawing Boards.
Stora Enso signed an agreement in November 2005, with Gaofeng Forest - Pulp & Paper Company that will enable Stora Enso to increase its land concession rights and wholly owned plantations in southern China to approximately 60,000 ha.
Empresa Nacional de Celulosa de España (ENCE) is a company quoted on the Spanish Stock Exchange and is the number one owner of Eucalypt timberland in Europe as well as being the leading producer in Europe and number two in the world of eucalyptus-based pulp.
ENCE's Uruguayan subsidiary EUFORES has been a pioneer within the forestry development of Uruguay. As well as establishing plantations, EUFORES manages nature zones and old forest reserves, water-meadows and palm groves. It is establishing a conservation and breeding ground for endangered species in the surroundings of M´Bopicuá.
The company's forest resources cover 53,000 hectares, of which 94% are its own property. EUFORES is the largest exporter of pulping wood in Uruguay.
ENCE announced plans to build a pulp mill at Fray Bentos last year with a capacity of 500,000 tons of pulp annually (1/3rd the size of the Botnia plant which will be the wrold's largest).
PART 2 The Globalised
Uruguay with a population of 3.4 Million rarely hits headlines unless their football team does well. Figures published by the Central Bank today show that the Uruguayan economy is booming, overall the economy grew 8.4 % in Jan/June '06 compared with last year and 3.5% growth in the 2nd Qtr over the 1st Quarter.
In June the Bank reported GDP growth of 7.2 % over 2005.The IMF raised its 2006 economic growth forecast for Uruguay to 5 percent from 4.6 percent.
In Jan / June this year , manufacturing output jumped 21.1 % from last year and exports rose 16.2 % to $1.88 billion.The construction sector grew 13.4 % due esentially to the building of a new power plant by the state energy company and public works in Rio Negro province, ENCE and Botnia are building their pulp mills.
The farm sector, grew 5.4 % in the first six months of the year due to an increase in beef production and exports.
In 1988, the World Bank and the Inter-American Development Bank (IDB), initiated the planting of eucalyptus plantations. Pulpwood the economists noted was US$60 a tonne, demand was high and people like thw World Bank were being accused of financing tropical rain forest destruction. It was claimed that indiscriminate logging of trees for pulp production around the world, was consuming 15 million hectares (58,000 square miles) annually.
In the climate controlled offices of the paper manufacturers in distant Spain and frosty Finland. Uruguay appeared as an ideal location for the fast growing and fast cropping Eucalypts. Montevideo pledged full compliance and provided forestry companies with generous subsidies, soft credits, and tax exemptions. Over 12 years, the Uruguayan government’s support for this sector exceeded $500 million in tax exemptions and direct disbursements, an amount representing almost 4 percent of the country’s annual GDP. To facilitate the transportation and export of the wood, the governments of the day made further investments in new ports, bridges, roads, and railway lines.
Part of the grand plan was of course the building of pulp mills - hungry, like the trees, for water. The World Bank, lobbed loans of US£200 Mn. each to Botnia (The Orion Mill) and ENCE (The CMB Mill) who will jointly "invest" US$2 Bn. This is the largest direct private investment ever in the country’s history (Population 3.4m) , according to figures released by Minister of the Economy Danilo Astori and Ministe of Industry Jorge Lepra.
Much of the Uruguayan economic and governmental leadership, supports the project and is actively encouraging this agro-industrial project, A Cumulative Impact STudy comparing the plans with Best Intrenational practice in Canada and Scandinavia show that whilst there is pollution it will appear anywhere you build the factory.
Principally the main resistance to the project is Argentina, smarting, it is said that the project is not theirs.
Surely this is an ideal project, it promotes sustainability, replaces logged forests, provides national income, employment in construction and continuing development.
Of course, much of the investment dollars end up in the developed world for the new generation of pulping plants which utilise the black liquor re-cycling which has been invented in Scandinavia and whose re-use will provide sustainable low cost, low emission electricity for the local population.
It is an irrefutable fact that the economic benefits are coming through .... and the pulping plants are not yet complete.
