Sector News

Lenzing joins forces with Duratex in a more than $1-billion wood pulp plant JV in Brazil

June 22, 2018
Chemical Value Chain

Lenzing Group, a world market leader in specialty cellulosic fibers, and Duratex São Paulo, Brazil, the largest producer of industrialized wood panels in the southern hemisphere, have agreed to form a joint venture (JV) to investigate building the largest single line dissolving wood pulp (DWP) plant in the state of Minas Gerais, close to São Paulo, Brazil.

This decision supports Lenzing’s backward integration and growth in specialty fibers.

The joint venture will investigate the construction of a 450,000-metric tons/year DWP plant, which is expected to become the largest and most competitive such plant in the world. DWP is the key raw material in the production of Lenzing’s biobased fibers. The two companies have secured a plantation of 43,000 hectares that will provide the Forest Stewardship Council certified biomass. The plantation is fully in line with Lenzing’s wood and pulp sourcing policy, the company says. The basic engineering and the application for permits will now be started. Final investment decision is subject to the outcome of the basic engineering studies and the approval by the respective supervisory boards.

Lenzing will hold 51% in the JV, which will operate the mill, and Duratex will have the rest. The estimated cash investment by the joint venture for the construction of the DWP mill is expected to be more than $1 billion based on current exchange rates and the basic engineering study. The JV will supply the entire volume of DWP to the Lenzing Group. “Specialty cellulosic fibers are an important contribution to make the global textile industry more sustainable…We are pleased that with Duratex, a recognized leader in sustainable forestry management, we have a strong partner in this joint venture. Together we will create a very sustainable and competitive raw material base for Lenzing’s global expansion plans”, says Stefan Doboczky, CEO of the Lenzing Group.

Lenzing’s nameplate capacity as of 31 December 2017 was 1.009 million metric tons/year. The company reported revenue of €2.26 billion ($2.63 billion) in 2017.

By Natasha Alperowicz

Source: Chemical Week

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