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0 URUGUAY Country Overview

1.1 Overview

Uruguay is a comparatively small nation, positioned between the larger neighbouring countries,
Argentina and Brazil. Located on the Atlantic coast at 55° W latitude and between 30° S and 35° S
longitude, Uruguay’s average temperature varies from 42° F in winter and 82° F in summer. Due to its
limited topographical variance, the climate of Uruguay is fairly uniform throughout. With an average
annual rainfall of 109 cms per year, conditions are ideal for fast growing forestry plantations. These
climatic conditions are quite similar to other countries in the temperate zone of the southern hemisphere
which have strong forestry activity such as Australia, New Zealand, Chile, and South Africa. Uruguay covers
an area of 17.1 million hectares with a population of 3.3 million people, 50% of which reside in it’s
capital, Montevideo and its surrounding area. Founded in 1726 by the Spanish, Uruguay soon became a
Spanish military stronghold and its natural harbor gradually became an important area for commerce
area. Uruguay declared independence in 1828 and the subsequent administrations of President Jose
BATLLE in the early 20th century established widespread political, social, and economic reforms. A
Marxist urban movement called “Tupamaros”, began in the late 1960s, which led Uruguay's president to
relinquish control of the government to the military by 1973. Soon after, the rebels had been defeated,
but the military continued to expand its hold over the nation. Civilian rule did not resume until 1985. In
2004, the “Frente Amplio” Coalition won national the elections that ultimately finished 170 years of
control previously held by the Colorado and Blanco political parties. The political and labor conditions in
Uruguay are among the most liberal on the continent. Uruguay has benefited from being the geographical
centre of Mercosur, a free trade region in South America which includes Argentina, Brazil, Paraguay and
Uruguay , together with associate members Chile and Bolivia. Its position in Mercosur has been a major
influence in the post positive growth in recent years after continued economic decline in the eighties and
early nineties.

1.2 The forest product Industry

The significance of Uruguay as a nation of forestry production is down to it’s capacity to grow plantations
quickly, rather than in it’s existing resources.

There is much land available for planting Eucalyptus and pine and Uruguay’s good weather
conditions,flat terrain, proximity to Mercosur, and government support for afforestation projects are
providing good opportunities for an expansion of the industry. Since 1987 the Uruguay government has
supported the forest industry plantations by providing tax benefits to landowners and investors alike.
The Plantations must be located in so called “Forestry Priority Areas”, suitable for growing forest but
not for crop farming or animal husbandry. There is an abundance of such land in Uruguay. The country
has population density of only 19 per square kilometre. The main occupations are now farming for
export, animal husbandry and tourism, mostly from Argentina. Uruguay’s economy has gradually moved
away from traditional animal husbandry.

1.0 URUGUAY Country Overview (continued)

1.2 The forest product Industry(continued)

As the government targets forestry as a growth sector Uruguay’s forest industry is beginning to adapt.
The forest industry of Uruguay was focused originally on supplying the domestic market with the vast
majority of the timber being utilised as industrial and domestic fuelwood. However, after the Forest Law
15.939 in 1987 was brought through, the forest sector of Uruguay has looked for greater investment
and in the forest industry. Since 1994 There has been a rapid increase in the number of plantations in
Uruguay,most of which are of the Eucalyptus species(83%), E. grandis and E. globulus. Pine plantations
(mainly loblolly pine and slash pine) account for ap-around 15% of the total, and 2% is composed of
Salicaceae and other species.Presently, the plantations cover about 413,000ha, of which 382,000 are
due to the measures taken in the 1987 Forest Law
Over 15 million ha of Uruguay’s total land is for agricultural use and livestock production. The geography
and topography of the land is conducive to easy cultivation, harvesting, and transport of forest products.
Uruguay is mostly grassland and savannah, with a mere 5% of the territory identified as forestland. Of this,
three percent is protected from harvest by law as it is considered to be native forestland. Selective cutting
is permitted for domestic consumption. Suitable climate and soil type, and low production costs relative
to other countries are cited as the primary areas for the competitiveness of the Uruguayan forest sector.

Eucalyptus grows at an average rate of 25 m per hectare per year. but, due to differing
climate/environmental conditions, the rates of grwoth vary within regions. In the north the growth rate is
3 3
approximately40 m per hectare per year. In the southeast, 20 m per hectare per year. The cutting cycle
varies from 7 to 10 years for pulp and 20 to 25 years for lumber. Due to a rise in foreign investment, the
development of pine plantations has increased but Eucalyptus plantations have been the main focus for
plantation investments. The pine is harvested mainly for lumber production in the north. (Pine has a
slower growth rate and a longer cutting cycle than Eucalyptus),The oldest plantations are in The Rio
Negro, Paysandu and Rivera regions whereas the most recent areas of plantation development are
situated in the central and eastern regions of the country.
The establishment of Law 15.939 in 1987 was pivotal in the development of these regions.

Several international investment institutions have invested in agro-forestry plantations in Uruguay as a

result of the attractive political and environmental aspects of the Uruguayan forest industry. These
institutions include:

Shell (Holland)
Weyerhaueser Corporation (USA)
• Emce (Spain)
• West Fraser (Canada)
• Kymmene (Finland)
• Fletcher Challenger (Chile & USA)

Southern South America 33 00 S, 56 00 W
Neighboured With Total Area
Argentina / Brazil 176,215 sq km
Total Land Total Water
175,015 sq km 1,200 sq km


Total Area Territorial Sea
1,648 km 12 nm
Argentina Boundary Exclusive economic zone
580 km 200 nm
Brazilian Boundary Contiguous Zone
1,068 km 24 nm
Coastline Boundary Continental Shelf
660 km 200 nm


Climate Year 2000
Warm temperate Total renewable water resource
Elevation Points 139 cu km
Low 0m / High 514m Withdrawal (Domestic / Industrial / Agriculture)
Terrain Total 3.15 cu km/yr (2%/1%/96%)
Rollin plains, low hills, fertile coastal lowland Withdrawal per capita
Arable land percentage (2005) 910 cu m/yr
Permanent crop percentage (2005) Arable land
0.24% Hydropower
Other land use percentage (2005) Minor Minerals
91.99% Fisheries
Irrigated land
2,100 sq km (2003)


Seasonal high winds (Pampero) Water pollution frequent
Droughts Poor soil Quality
Floods Hazardous Waste Disposal
Rapid change in weather

We hope that you have enjoyed this 3 page
sample of the “World Forestry Update”
This forestry “market brief” is a Greenwood Management
ApS publication designed to help both forestry investors as
well as professionals.

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