The Business Case for Forestry Investment in Uruguay

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In Uruguay, investors have a variety of options for forestry investments. They can opt for either eucalyptus for the pulp industry, eucalyptus for the building industry, or pine trees such as radiata pine. Moreover, they can choose between land that has already been planted or pastoral land suitable for planting. Additionally, they may consider already forested land that has not yet been harvested or land that has already undergone one harvest, as eucalyptus can regrow and undergo a second cycle.

Another critical aspect is whether to lease the land or contract a forestry manager. This decision can significantly impact the return on investment.

One of the advantages of forestry investments is the low cost of maintenance and fire insurance, as well as the potential to generate revenue from livestock. After a decade, the first harvest can be obtained, followed by the second harvest in the twenty-first year. Typically, the yield of the second harvest is 75% of the first, without the cost of planting. After 20 years, new trees can be planted in accordance with the farm’s forestry layout.

Uruguay is fortunate to have internationally recognised mills such as UPM and Montes del Plata, creating an advantage for forestry investors. In addition, there is a strong demand for chip exports to Portugal and for quality wood for manufacturing.

It is important to note that the 1987 forestry law outlines the soil types suitable for forestry investments while prohibiting commercial tree planting in certain areas.

Hector Laca

Hector is a highly regarded agricultural consultant with exceptional interpersonal skills and extensive farming knowledge. His empathy fosters strong client relationships. Innovative and adaptable, he excels in various work settings. Hector’s expertise is bolstered by advanced degrees, including a PhD from New Zealand.