The Lenzing Group, one of the top manufacturers of specialty cellulosic fibers, and Duratex, a major producer of industrialized wood panels for the Southern Hemisphere, have formed a joint venture to investigate building the largest single line dissolving wood pulp (DWP) plant in the state of Minas Gerais, close to São Paulo, Brazil.
Lenzing said this decision supports the backward integration and the growth in specialty fibers defined in its corporate strategy sCore TEN. The project will investigate construction of a 450,000 ton DWP plant, which is expected to become the largest and most competitive single line DWP plant in the world, Lenzing noted. Dissolving wood pulp is the key raw material for the production of Lenzing’s bio-based fibers, and the company will hold 51 percent in a future joint venture.
For the operation ahead, the two companies have secured 43,000 hectares of land that will provide the Forest Stewardship Council certified biomass. Lenzing, based in Austria but with facilities around the world, said the site is in compliance with its wood and pulp sourcing policy, which commits the company to only obtain wood and pulp from non-controversial sources. The basic engineering and the application for required permits and merger clearances will now begin.
The estimated cash investment for the construction of the DWP mill is expected to be slightly more than $1 billion. The joint venture will supply the entire volume of dissolving wood pulp to the Lenzing Group—a move Lenzing said marks an essential milestone in its effort to grow its specialty fibers business.
“Specialty cellulosic fibers are an important contribution to make the global textile industry more sustainable,” Stefan Doboczky, CEO of Lenzing Group, said. “In line with our corporate strategy sCore TEN, we are committed to strong organic growth in this field. 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.”
The final investment decision to build the plant is subject to the outcome of the basic engineering studies and the approval by the respective supervisory boards, which is expected in 2019.