Pulp & Paper Assets in Uruguay Exchanged Between Finnish Paper Companies

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Researched by Industrial Info Resources (Sugar Land, Texas)--Finnish forest industry group UPM-Kymmene Oyj (OTC:UPMKY) (UPM) (Helsinski) purchased assets of the cellulose processing plant owned and operated by the pulp company Oy Metsä-Botnia Ab (Botnia) (Helsinski) in the Uruguayan city of Fray Bentos. UPM has also acquired the totality of assets of Forestal Oriental de Uruguay (Montevideo, Uruguay), which owns a eucalyptus plantation with Botnia. The transaction is expected to be completed in the first quarter of 2010 and has an estimated cost of $2.4 billion (1.6 billion euros).

UPM will sell approximately 30% of its shares in Botnia. Before the transaction, UPM owned 47% of Botnia's shares in Finland and Uruguay.

Located in the state of Rio Negro, the Fray Bentos pulp mill started operating in November 2007 and has a production capacity of 1 million tons of eucalyptus pulp per year. Approximately 4,000 people work at the plant.

UPM is a forest industry group that consists of three business groups: Energy and Pulp, Paper, and Engineered Materials. The company has manufacturing facilities in 14 countries and employs 24,000 people worldwide.

Botnia is a Finnish pulp manufacturing company founded in 1973. Botnia's bleached softwood, birch, and aspen pulp are used for the production of printing papers, folding box boards and tissue. The company has five operating plants in Finland, which are located in Joutseno, Kemi, Rauma and Äänekoski, with a combined production capacity of 2.7 million tons of pulp.

Forestal Oriental de Uruguay is a forestry company and a supplier of woodchips. It started operations in 1990 and has seven operational facilities in Uruguay.

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