DUE DILIGENCE FOR URUGUAY'S NOMINATION FOR THE

UNCLAS MONTEVIDEO 000463

SIPDIS

STATE ALSO FOR EEP/EPPD - SMITH-NISSLEY/ENOCH

E.O. 12958: N/A
TAGS: PREL ETRD ELAB UY
SUBJECT: DUE DILIGENCE FOR URUGUAY'S NOMINATION FOR THE
SECRETARY'S AWARD FOR CORPORATE EXCELLENCE

REF: A. MONTEVIDEO 315

B. STATE 84836


1. Post has reviewed its May 2008 nomination for the
Secretary,s Corporate Excellence Award and is confident that
Weyerhaeuser remains an ideal candidate (ref A).
Weyerhaeuser has created a strong and consistent reputation
in Uruguay for economic transformation, social responsibility
and best practices. Its commitment to these principles has
positioned Weyerhaeuser as a corporate leader in Uruguay and
provides a great example of the benefits of foreign, and
especially U.S., investment. Weyerhaeuser has made the
Ambassador and Embassy,s job to open doors for American
business easier in Uruguay.


2. The Ambassador led Post,s due diligence review of the
Weyerhaeuser nomination, requested in ref B. Post,s
responses follow:

A) Post identifies no potential downside to selecting
Weyerhaeuser for the Secretary,s ACE.

B) Weyerhaeuser hired at least six professional and
executive level U.S.-based employees to oversee plant
expansion, finance and project management for its operations
in Uruguay. In addition, the company employed significant
U.S.-based third party contractors in the areas of industrial
support service, plant equipment refurbishment, and logistics
and customs handling.

Imports of Weyerhaeuser plywood from Uruguay generate jobs in
logistics at the ports of Savannah, Georgia and in the future
Mobile, Alabama. The majority of its products destined for
the U.S. are used in the upholstered furniture industry,
which plays an important role in the economies of Mississippi
and North Carolina.

C) For the expansion project at Weyerhaeuser,s Los Piques
mill in Tacuarembo that began in 2007 and will run through
2009, the company will import USD 15.5 million of equipment
from the United States. During the original construction of
the plywood mill in 2005-06, Weyerhaeuser imported USD 10.2
million of U.S. materials. The company continues to source
significant purchases of equipment and technical support form
the U.S.

D) Weyerhaeuser has had a notable positive impact in the
areas it operates. The difference is evident during visits
to the rural areas in which Weyerhaeuser operates. Its
employees are paid better than average for Uruguay, and since
most newly created jobs have been concentrated in
economically depressed areas in the interior of Uruguay, the
impact has been even greater. Weyerhaeuser sets the bar in
safety and security for its workforce in the forestry
industry. Employee retention is very high and even when
employees have the opportunity to leave for higher paying
jobs, many cite safety and community involvement as reasons
for staying with Weyerhaeuser.

Although unions are common in Uruguay, Weyerhaeuser operated
for ten years without a union. In the first half of 2008, a
union representing approximately 20% of Weyerhaeuser,s
workforce was formed at its Los Piques mill.

E) Post is not aware of any pending litigation in local
courts involving Weyerhaeuser.

F) Neither the Ambassador nor officers involved in the
nominating process are stock holders or stakeholders of
Weyerhaeuser.

Baxter