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Brazil: Billion Dollar Investment

Lenzing and Duratex Want to Build World's Largest Dissolving Wood Pulp Plant

| Editor: Alexander Stark

Lenzing and Duratex plan to build 450,000 t dissolving wood pulp plant in Brazil.
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Lenzing and Duratex plan to build 450,000 t dissolving wood pulp plant in Brazil. (Source: Lenzing)

Lenzing Group and Duratex, a producer of industrialized wood panels, announced that they agreed on the terms and conditions to form a joint venture to investigate building the largest single line dissolving wood pulp (DWP) plant in the state of Minas Gerais, close to Sao Paulo, Brazil.

Lenzing/Germany — The joint venture will investigate the construction of a 450,000 t DWP plant, which the companies expect to become the largest and most competitive single line DWP plant in the world.

Dissolving wood pulp is the key raw material for the production of the producer’s bio-based fibers. For the future operation, the two companies have secured a plantation of 43,000 hectares that will provide the FSC certified biomass. The basic engineering and the application for required permits and merger clearances will now be started.

Lenzing will hold 51 % of the joint venture which will operate the mill, while Duratex’s share will be 49 %. The estimated cash investment by the joint venture for the construction of the DWP mill is expected to be somewhat above one billion Dollar (based on current FX rates, net of generic tax refunds and the outcome of the basic engineering study). The joint venture will supply the entire volume of dissolving wood pulp to the Lenzing Group.

The final investment decision to build the dissolving wood pulp plant is subject to the outcome of the basic engineering studies and the approval by the respective supervisory boards.

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