Uruguay is betting big on its fast-growing forest economy. Last year, wood pulp surpassed beef for the first time to become the country’s leading export industry, generating $2.5 billion (42% of which went to China), now representing 20% of the country’s total exports.
In its latest climate change plans—submitted to the UN in 2024 and covering the years up to 2035—Uruguay stated its intention to increase its forest plantation area by 20% of the total area recorded in 2020. However, “there is room for more” eucalyptus, argues Lucia Basso, president of Uruguay’s Society of Forest Producers, who expects the country to reach more than 1.8 million hectares of forestland by 2050.
Uruguay’s forestry industry received a boost in 2005, when Uruguay struck a pulp mill deal with UPM (named Botnia at the time). That led to the first pulp mill on the coast of the Uruguay River (which has since been followed by plants established in 2023 and 2024), located in the Fray Bentos municipality on the country’s western border with Argentina: “The development of this industry is the result of a successful state policy, the Forestry Law of 1987,” said Ignacio Bartesaghi, director of the Catholic University of Uruguay’s International Business Institute. This, “together with another policy on free trade zones and free ports, has allowed investments worth several billion dollars to flow into the sector.”
And it’s not just pulp where industry is thriving, with Wood Central reporting last year that Uruguay is now competing with Brazil, Argentina, and Chile to become a regional power player in mass timber construction.
Speaking to Wood Central at last year’s Timber Construct, Australia’s largest timber construction conference, Matias Abergo, Arboreal’s President and Co-Founder, said Arboreal exports 450 containers of timber every month and supplies 22 countries (including Australia and New Zealand) with timber from its state-of-the-art plant. “We came from the construction industry; normally, you would start with the forestry, do the sawmilling, and then add value to your lumber.”
“But in our case, we discovered that we can make this transition to help drive the automation of construction,” Mr Abergo said. “So we started in 2017 and fell in love with mass timber. Not just for the speed of construction but for the decarbonisation.”
