The MDF and plywood producer’s plant, located in Tacuaremb√≥, Uruguay, has been occupied by its union-backed workers since the shutdown by the owner, Cotopaxi group (ACOSA) without warning at the end of July. Closure of the facility has laid-off its 420 strong workforce.

In a brief statement, ACOSA said it was "impossible" to keep Urupanel running "due to significant operating losses over the past three years" although it had sunk US$20m in the business. ACOSA said the plant’s operation will be suspended while Urupanel seeks Uruguay’s equivalent of Chapter 11 bankruptcy protection, according to regional media reports.

The group, which rescued indebted Urupanel in 2012, warned that its future depends on substantial restructuring of the business.

In October, potential investors from an unnamed Chilean forest products company were set to visit the Uruguayan plant and an unidentified Brazilian company that offered to acquire Urupanel proposed slashing the workforce to just 50 workers, the Uruguayan newspaper El Observador quoted a timber workers union leader as saying.