Urupanel has a manufacturing base in the central Uruguayan city of Tacuarembó producing pine and eucalypt plywood and thin MDF. The mill has annual production capacities of 80,000 m3/year for plywood and 60,000m3/year for MDF, but the operation is reported to be running currently at just 30% of capacity.

Urupanel originally launched a plywood plant in Uruguay in 2004 backed by Chilean capital and aimed at serving the export market. In 2006, Urupanel began a second construction phase to take capacity to 100,000m3/year, but the company was hit hard by the 2008 world recession.

In 2009, Urupanel launched the country’s first MDF line investing around US$25m and hiring another 70 workers but the company faced rising costs for raw material as it lacked its own forest resources.

Last year, Urupanel was acquired by the investment firm Austin Park Capital of Sarnen, Switzerland, reportedly for around US$20 ¬¨- said to be the value of the former owner’s debt. But growing debt and a crisis in the forest products sector saw the panel maker driven into drastic production cutbacks and workforce layoffs.

This year, following months of uncertainty about the company’s future, a majority of its creditors, which included Spanish and German banks, agreed to accept a plan to repay part of Urupanel’s debts understood to amount to around US$23m.

Its new investor, Quito, Ecuador-based Cotopaxi is a long established Andean region MDF producer that will benefit from Uruguay’s rich forest resources.