Botnia sees Uruguay paper pulp mill starting up

HELSINKI, Sept 20 (Reuters) - Metsa-Botnia MRLBV.HEUPM1V.HE, Europe's second-biggest paper pulp producer, said it expects its mill in Uruguay to start up on schedule this month, despite a major diplomatic dispute.

Media reports have said start-up of the 900 million-euro ($1.3 billion) plant may be delayed due to the row between Uruguay and its neighbour, Argentina.

“No such information has come to our attention, an official request or something of that sort, that would lead to (a delay),” Botnia spokesman Marko Janhunen said.

Janhunen said Botnia was finishing the construction of the plant and carrying out test runs, while it continues talks with the Uruguay government on getting permission for a start-up, which Jahnunen said was a process done in stages.

Argentines living in Gualeguaychu, a city across the river from the plant on the Uruguay side, have for long protested against having the mill, saying it will dump toxins into the river, foul the area and ruin tourism.

But Metsa-Botnia has said the plant will bring environmental as well as economic benefits to the area, expecting to create 8,000 direct and indirect jobs in the region and to produce up to 3,000 tonnes of pulp daily up to 2009, or about 1 million tonnes per year.

“The political process is ongoing to resolve the diplomatic conflict. You don’t need to be much of a political analyst to be able to say that this would be easier now than later,” Jahunen said.

According to Finnish financial daily Kauppalehti, a potential delay in the plant’s start-up would cost Botnia about 8 million euros a week, but Janhunen declined to comment on the figure.

Metsa-Botnia is owned by the world’s leading magazine paper maker UPM-Kymmene and Metsaliitto Group, also the owner of paper maker M-real.