Lenzing and Duratex plan biggest dissolving wood pulp plant in Brazil

Austrian textile and cellulose fibre producer Lenzing Group and Brazilian company Duratex announced plans on Thursday to build the world’s largest single line dissolving wood pulp plant close to Sao Paulo, Brazil. Dissolving wood pulp is the key raw material for the production of Lenzing’s bio-based fibers. Both companies plan to form a joint venture to fulfil this ambition. However, the final investment decision is subject to outcome of basic engineering expected in 2019 as well as approval by the respective supervisory boards.

The joint venture will investigate the construction of a 450,000 t dissolving wood pulp plant, which is expected to become the largest and most competitive single line dissolving wood pulp plant in the world. Duratex already is the largest producer of industrialised wood panels in the Southern Hemisphere and Lenzing supports the backward integration and the growth in specialty fibers, defined in Lenzing’s corporate strategy sCore TEN, with this decision.

“Specialty cellulosic fibers are an important contribution to make the global textile industry more sustainable. 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 recognised 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”, said Stefan Doboczky, CEO of the Lenzing Group.

The two companies have already secured a plantation of 43,000 hectares that will provide the FSC-certified biomass, which is fully in line with Lenzing’s wood and pulp sourcing policy. The basic engineering and the application for required permits and merger clearances will start immediately according to the companies.

“Projects of this nature are the result of our strategic plan and of our team’s effort towards drawing Duratex’s future. The company is known for its financial solidity, high quality, innovation and sustainability; the results of a history spanning over six decades. The partnership with Lenzing for the construction of the largest single line dissolving wood pulp plant in the world is an honour for Duratex. Working with Lenzing, a global benchmark in technology, high quality and corporate governance, makes us very proud. We are sure that this joint venture is going to be successful”, affirmed Duratex CEO Antonio Joaquim de Oliveira.

Lenzing will hold 51 percent of the joint venture and Duratex the remaining 49 percent. Its estimated cash investment is expected to be somewhat above one billion US dollars 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.

Last autumn, Lenzing presented its sustainable textile innovation EcoVero, an alternative to viscose, which the company produces since May also at its Chinese location Lenzing Nanjing Fibers (LNF). In May, the company also announced plans to “significantly expand” the production capacities for its new Tencel Luxe filament yarn, which was launched just in October 2017.

Photo: Lenzing Group