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Austrian cellulosic fibre producer Lenzing is investing in the construction of the world’s largest wood pulp plant in Brazil in a move aimed at growing the company’s speciality fibre business and strengthening its market position.

The investment of US$1.3bn is being made with Duratex, the largest producer of industrialised wood panels in the southern hemisphere. The plant, which will be located in the state of Minas Gerais, near Sao Paulo, will produce up to 500,000 tonnes of wood pulp annually, supplied by FSC-certified plantations.

Lenzing says the single-line dissolving wood pulp plant strengthens the group’s backward integration and cost position as well as its speciality fibre growth in-line with its sCore TEN corporate strategy. It 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 biobased fibres. The joint venture will supply the entire volume of dissolving wood pulp to the Lenzing Group.

“Wood-based cellulosic fibres offer an important contribution to enhance sustainability in the textile industry,” says Lenzing CEO Stefan Doboczky. “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.”

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By GlobalData

The start-up is planned for the first half of 2022. In the joint venture, Lenzing holds a 51%, Duratex a 49% stake.

The plantations from which the wood pulp will be sourced, covering 44,000 hectares, operate completely in accordance with the guidelines and high standards of the Lenzing Group for sourcing wood and pulp, the company says.

The plant will operate among the highest productive and energy-efficient in the world and will feed the 40% of excess bioelectricity generated on-site as “green energy” into the public grid, it adds. The project allows Lenzing to set a milestone in its strategy to carbon neutrality.