Forestry sector offers opportunities for the installation of value-added industries

Uruguay offers important advantages for investing in the forestry sector: its geographical location, the large supply of wood raw materials from managed and certified plantations, the ease of doing business and a favorable legal framework for the forestry sector, are some of the most prominent factors.

Uruguay is located at the same latitude as the main forestry enterprises in the southern hemisphere. It is located in a climatic zone similar to that of southern Australia, New Zealand, South Africa and central areas of Argentina and Chile, with climate and soil conditions that ensure very good levels of international competitiveness.

Our country has a stable legal framework conducive to investment in the forestry sector and a national code of good forestry practices to achieve sustainable production, meeting the requirements of international demand.

Important foreign companies have already chosen the country to settle and develop their activities. In 2007, UPM - a Finnish capital company -, Montes del Plata - Chilean and Swedish-Finnish capitals - installed in Uruguay since 2009, and Lumin - Brazilian capitals - among others, were installed. Likewise, important TIMOs (Timber Investment Management Organization), such as GFP, TRG, BTG and Stafford operate in Uruguay.

In 2018, foreign sales of this product totaled USD 1,660 million, 25% higher than in 2017, and it was Uruguay's main export product.

According to data provided by Banco de Previsión Social (BPS), the governmental institution of social security, there are more than 17,000 workers employed in the sector. According to BPS data, there are more than 1,770 companies linked to the forest complex. Of these, 92% are micro and small enterprises. Among the exporting companies, the pulp producers UPM and Montes del Plata are the main ones; between them they represent 78% of the value exported by the sector in 2017.

There are important opportunities for the installation of industries that achieve a greater addition of value to the wood. The great offer of pine wood, coming from managed and certified plantations, is a great attraction for the installation of first and second mechanical transformation companies. The annual availability of this wood exceeds 3 million cubic meters per year, far surpassing the industrial capacity of the country.

In this sense, Uruguay is also working on the promotion and development of wood construction, which generates space for new companies that aim to produce inputs for this activity.

See full report: FOREST SECTOR