LD Celulose, Lenzing’s joint venture with Duratex to build one of the largest dissolving wood pulp plants in the world, in Minas Gerais, Brazil, has received $1.1 billion in financing from IFC, a member of the World Bank Group, and IDB Invest.
LD Celulose was formed between the Austrian fiber company Lenzing and the Brazilian Duratex to set up one of the largest soluble cellulose plants in the world. The Lenzing Group is a market leader for wood-based cellulosic fibers and Duratex is one of the largest producers of industrialized wood panels in the Southern Hemisphere. The LD Celulose joint venture, created in 2019, is owned 51 percent by Lenzing and 49 percent by Duratex.
With an overall investment of $5.2 billion, the plant is being erected in Triângulo Mineiro, between the municipalities of Indianópolis and Araguari. When operational in 2022, it will produce 500,000 tons of soluble cellulose per year.
The special cellulose fibers produced in LD will be used in the textile industry, generating fabrics with innovation and sustainability. When the plant starts operating, it will generate around 1,100 direct jobs, boosting the social and economic development of the entire region.
The financing co-led by IFC and IDB Invest will support LD Celulose’s investment program for 2020-2022, which consists of the construction of a dissolving wood pulp (DWP) mill and the installation of a cogeneration plant with a capacity of 144 megawatts. As part of the project, LD Celulose will also sustainably plant and manage approximately 70,000 hectares of eucalyptus plantations.
DWP is the main raw material used to produce wood-based textile fibers that are biodegradable and considered environmentally friendly. The end products of DWP include textiles and hygiene products. Once operational in 2022, LD Celulose will have capacity to produce up to 500,000 tons of DWP annually.
LD Celulose’s cogeneration plant will contribute to an increase in the share of sustainable biofuels and renewable energy in the country’s energy mix. The financing will also increase sustainability standards for the pulp industry and the plantation forestry sector through LD Celulose’s adoption of IFC’s Environmental and Social Performance Standards.
The export credit agency Finnvera and seven commercial banks are participating in the financing.