Lenzing, a leader for wood-based cellulosic fibres, and Duratex, a producer of industrialised wood panels in the southern hemisphere, are set to build a 500,000 ton dissolving wood pulp plant in the State of Minas Gerais, near Sao Paulo, Brazil, in the first half of 2022. In the joint venture, Lenzing holds a 51 per cent, Duratex a 49 per cent stake.

The expected industrial CAPEX will be approximately $1.3 billion (based on current exchange rates and customary tax refunds). The project is financed through long-term debt. The corresponding financing contracts are expected to be concluded at the end of the first quarter of 2020, according to Lenzing.

The new dissolving wood pulp plant strengthens Lenzing’s backward integration and cost position as well as its specialty fibre growth in line with its sCore TEN corporate strategy. The single-line dissolving wood pulp plant with an annual nameplate capacity of 500,000 tons will be the largest and most competitive production facility of its kind. Dissolving wood pulp is a key raw material required for manufacturing Lenzing’s bio-based fibres. The joint venture will supply the entire volume of dissolving wood pulp to Lenzing.

“Wood-based cellulosic fibres offer an important contribution to enhance sustainability in the textile industry. In line with its corporate strategy sCore TEN, 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,” Stefan Doboczky, CEO of Lenzing said.

In planning the new production facility, particular importance was given to sustainability aspects. The joint venture secured FSC-certified plantations covering an area of over 44,000 hectares to provide the necessary biomass. These plantations operate completely in accordance with the guidelines and high standards of the Lenzing for sourcing wood and pulp. The plant will operate among the highest productive and energy-efficient in the world and will feed the 40 per cent of excess bioelectricity generated on site as ‘green energy’ into the public grid. With this project, Lenzing sets a milestone in its strategy to carbon neutrality.

Fibre2Fashion News Desk (GK)

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