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Lenzing to Build $1.3 Billion Wood Pulp Plant in Brazil Joint Venture, Grabs Canopy Accolade

The Lenzing Group, a Austria-based manufacturer of wood-based cellulosic fibers, and Duratex, a major producer of industrialized wood panels, will build a $1.3 billion, 500,000-ton dissolving wood pulp plant in the State of Minas Gerais, near Sao Paulo, Brazil.

The startup is planned for the first half of 2022. Lenzing holds a 51 percent stake in the joint venture and Duratex has the remainder. The project is financed through long-term debt, with financial contracts expected to be in place at the end of the first quarter of 2020.

The new dissolving wood pulp plant strengthens Lenzing’s supply chain integration and cost position, as well as its specialty fiber growth in line with its sCore TEN corporate strategy for greater sustainability and efficiency, the company said. The single-line plant will be the largest and most competitive production facility of its kind, Lenzing added.

Dissolving wood pulp is a key raw material required for manufacturing Lenzing’s bio-based fibers. The joint venture will supply the facility’s entire volume of dissolving wood pulp to the Lenzing Group.

“Wood-based cellulosic fibers offer an important contribution to enhance sustainability in the textile industry,” Stefan Doboczky, CEO of the Lenzing Group, said. “Lenzing is committed to drive organic growth in this market. With this investment, we will become more competitive, act more independently and subsequently strengthen our market position. The trust and support of the main shareholders of Lenzing and Duratex were of great importance for this key project.”

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In planning the new production facility, the manufacturer of such fibers as Tencel and Modal gave top importance and consideration to sustainability aspects. The joint venture secured Forest Stewardship Council (FSC)-certified plantations covering an area of more than 44,000 hectares to provide the necessary biomass. These plantations operate in accordance with the guidelines and standards of the Lenzing Group for sourcing wood and pulp.

The plant will operate among the highest productive and energy-efficient in the world and will feed the 40 percent of excess bioelectricity generated on site as “green energy” into the public grid, the company noted. With this project, Austrian firm sets a milestone in its goal of carbon neutrality, Lenzing noted.

In this regard, Canopy has rated it No. 1 for active contributions to forest conservation and high level of transparency, Lenzing said. In its “Hot Button Report,” the Canadian non-profit organization grades the world’s 32 largest producers of wood-based fibers with respect to their success in achieving sustainable wood and pulp sourcing.