The Uruguayan Forestry Miracle: Exploring Sustainable Practices

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In the late 1990s, Uruguay faced an economic crisis that put it on a path of destruction. Fortunately, the country found hope for recovery in its forestry industry through eucalyptus and pine plantations. By planting and managing eucalyptus forests, Uruguay boosted its economy and provided jobs for its citizens.

The Uruguayan eucalyptus and pine forestry miracle began with two paper mills: Botnia and Montes del Plata. These two companies heavily invested in infrastructure, technology, labour training, and equipment modernization to transform the country’s forests into planted ones filled with eucalyptus trees. This resulted in an increase in productivity while also promoting sustainability practices such as avoiding deforestation.

Tree plantations in Uruguay total one million hectares which represents about 6% of the country’s land.

Uruguay has achieved something extraordinary in a continent known for its wide range of ecosystems; its forests have grown in size despite the rest of South America’s rapidly depleting native forests. How did this “forestry miracle” come to be? Through a program that replaced traditional timber with fast-growing eucalyptus and the creation of several pulp mills to export paper products and wood pellets around the world, Uruguay is a beacon of sustainable forestry practices. The country has also created an impressive network of protected national parks, wildlife refuges and reserves, such as Santa Teresa National Park and Quebrada de los Cuervos Natural Monument. These are just a few examples of Uruguay’s efforts to protect its forests and promote responsible forestry practices.

Uruguay is now dedicated to sustainable forestry, unique in the region for its effectless

The Forestry Law (Ley Forestal 15939) was approved in 1987. Thirty years later, the sector represents 3.5% of the country’s GDP (a total of USD 56 billion in 2019) and generates USD 2,000 million in exports, according to the SPF. Before the law, man-made forestry plantations comprised around 50,000 hectares – today, they total one million hectares, representing about 6% of the country’s land.

The remaining 5% of the land comprises native forests which grow on riverbanks and are protected by Ley Forestal

Uruguay is one of the few countries in the region whose exotic forests have expanded; in the 1990s, they occupied 660,000 hectares, and now they’ve surpassed 1,000,000 hectares.

In the 1980s, Uruguay had a really advanced mapping system of all its territory, which allowed forest companies to identify soils with good potential for forestry, despite having low productivity for traditional land uses.

The law implemented a pioneering land management programme, and new forests containing 80% eucalyptus and 20% pine trees were planted to provide raw materials for the wood and pulp industries. Both are the most productive and adaptable types of trees for local conditions.

Forests are an important tool against climate change

The implementation of the pulp industry was gradual, as it first needed fully grown trees. The first pulp plant was the UPM Fray Bentos mill, inaugurated in 2007. The country’s second pulp mill was established in 2014. The third one, UPM’s Paso de los Toros mill, was completed in 2022 and will increase GDP by 2%, producing renewable energy by 10% and employing a further 10,000 people.

Forest plantations have also reversed unemployment figures in rural areas, improving the economic and working conditions of those living in the country’s interior. Currently, the forestry industry employs 25,000 people, plus 50% of those working in tree nurseries are women.

The new forests help counteract CO2 emissions from livestock, one of Uruguay’s major industries and generate a huge carbon sink. Moreover, more than 80% of the forestry industry is certified by FSC® or PEFCTM, closing the life-cycle of a success story that proves that doing things differently is sometimes the way forward.

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About Geoffrey W W McRae

With a highly distinguished career spanning more than three decades across five different countries, New Zealander Geoffrey McRae has established himself as a leading authority on South American real estate, agricultural, and commercial matters. As the founder of Gateway to South America – a real estate consulting group specialising in six South American countries – Geoffrey has developed a reputation for discretion, expertise, and experience that has seen him represent some of the most prestigious clients in the region. His deep knowledge and experience of South American markets have placed him at the forefront of the industry and given him the opportunity to guide and advise with confidence and surety. His long and successful career – which continues to evolve and expand daily – is a testament to his talent, tenacity, and ambition.

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