Transport of building material for Botnia pulp factory stopped by Argentine customs

Botnia accuses Argentina of intimidating contractors in Uruguay project

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The construction of a pulp factory in Uruguay by the Finnish company Metsä-Botnia has met with new problems, after customs officials of neighbouring Argentina held up delivery of construction material for the plant for a few days.
      The delivery was from an Argentine company to Botnia S.A., Metsä-Botnia's Uruguayan subsidiary.
      Esteban Bengarelli, deputy head of Argentina's customs service, said that the move was prompted by environmental and public health concerns.
     
The action is part of broader Argentine resistance to Botnia's project, announced in March, for the construction of a factory to produce eucalyptus pulp in Fray Bentos on the banks of the Uruguay River, which forms the border between the two countries.
      Argentina has expressed concern that the plant might pollute the river, which has strained relations between the two neighbouring countries. Tens of thousands of people have protested against plans by Botnia and the Spanish company Ence to build pulp mills in the area.
     
Metsä-Botnia project leader Timo Piilonen says that steel parts for concrete prefabricated elements had been delivered to an Argentine company for transfer to the building site.
      "They were afraid to sign the contract, because the Argentine government has threatened action against companies that deliver goods for the pulp factory project. A container full of the parts was being taken from Buenos Aires to a factory in Montevideo. However, Argentine customs officers stopped it in the harbour of Buenos Aires", Piilonen says.
      Piilonen says that the authorities gave environmental and health concerns as the reason. "The container was in poor condition. We had bought containers in poor condition because they will be left as storage space on the site of the factory. We have paid a fine to Argentine Customs, and now the container appears to be en route to Montevideo."
     
Botnia has had problems with other Argentine companies as well.
      In September concrete prefabricated elements were supposed to be delivered from Argentina to the construction site, but the deliveries never took place. The deal was worth EUR 2.3 million.
      "Argentine officials have told construction companies that they will never get public contracts if they sell goods or services to us", Piilonen says.
      He points out that the failure of the deal is not economically significant, because no contracts were signed.
      "We have agreed on alternate deliveries with Uruguayan and Brazilian companies."
      "It is unfortunate that Argentina is treating its own companies in this way", Piilonen observes.
     
Botnia's pulp mill project, which is worth about EUR 1 billion, is Finland's largest single industrial investment abroad.
      The factory is expected to produce a million tonnes of pulp a year when it starts operations about two years from now.
      Metsä-Botnia is owned by the Finnish paper companies UPM, M-real, and Metsäliitto.


Previously in HS International Edition:
  Argentina demands Botnia abandon their pulp mill undertaking in Uruguay (11.8.2005)
  Metsä-Botnia to build massive pulp factory in Uruguay (8.3.2005)

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