Forestry investment perpective – Uruguay

Just back from a visit to Uruguay, where I have spent  a number of years in the past involved in  the forestry business there.  So it was interesting to see how the forestry market has matured over the years.  Some figures and perspective on Uruguayan forestry below.

Uruguay expect exports to surpass 4.5 million cubic metres of wood this year.

The forestry industry has had a major influence on Uruguay in recent years.  As a rough guide, before 1987,  there were only 100,000 hectares of plantation forests. Following changes to the law in 1987,  this has now risen to nearly one million hectares in 2009,  of the 3.3 million hectares approved for forest plantations by the Agriculture Ministry.  Native forests cover about 750,000 hectares.

The growth of the forestry  industry,  with the  accompanying growth in inward investment in forestry projects,  has been criticised by some  green campaigners who claim damages to the soil and depletion of water reserves have been caused by the  explosive growth in plantations. This is an area of some contention amongst the forestry community,  but until another option to satisfy the ever growing global demand for timber is found,  I am yet to hear  of a better solution to address the problem of timber supply/demand, without causing massive destuction of the  natural forest.

The Uruguayan forestry industry already employs  around 6,000 workers in the western border provinces. But within the next four years, another 2,000 jobs are expected to be created.  New investment projects are in the pipeline too, so the visibilty for a sustained period of growth seems to be  clear.  In July 2004, a “good forestry practices” code was brought in as a means for the “transformation and modernisation of labour relations in the area.”    However,  many  trade unionists cite the real benefits for forestry workers occurred in December 2008 when a new law was enacted that prescribed an eight-hour workday, providing half hour work breaks for all forestry workers.

The forestry industry generates one job for every 30 to 35 hectares, whereas  the agriculture and livestock  business traditionally the main drivers of the Uruguayan economy , employ one person for every 500 hectares.  Workers who stay on the forestry  plantations are generally  given accommodation, food and heating.  Forestry workers earn better on average than other agricultural labourers, however much of  the work is seasonal, with spring and fall being the busier seasons.  Many workers are given specific areas of responsibilty ie  ground preparation, planting, maintenance, etc  but these jobs produce a variety  in wage payments,  with the workers being  paid according to their levels of experience and ability.

In the western provinces in particular,  investment in forestry the industry is expected to be in excess of US$2.5 billion, with additional  spending on infrastructure such as transportation links likely to provide further employment to local workers.