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Monday, 16 September 2019
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Markets & companies, Raw materials market

Borregaard and Rayonier Advanced Materials invest in new lignin operation

Thursday, 4 June 2015

Borregaard and Rayonier Advanced Materials (RYAM) have entered into a non-binding letter of intent regarding the establishment of a new lignin operation adjacent to RYAM’s Fernandina Beach pulp mill in Florida.

The new company will manufacture lignin products suitable for concrete admixture and similar applications targeting primarily the North and South American markets. Source: fotomek/Fotolia
The new company will manufacture lignin products suitable for concrete admixture and similar applications targeting primarily the North and South A...

The new company will be owned 55% by Borregaard and 45% by RYAM.

Suitable for concrete admixture

The Fernandina Beach mill manufactures specialty cellulose and lignin raw material as co-products from softwood. Utilising Borregaard’s know-how and technical expertise, the new company will initially manufacture lignin products suitable for concrete admixture and similar applications targeting primarily the North and South American markets. The products will be marketed through Borregaard’s international sales network and will represent a 30% increase in the lignin sales volume at full capacity. It is anticipated that the project will be completed in two phases over 5 years. The parties estimate an aggregate EUR 98.92 million for a capacity of 150,000 metric tonnes dry substance per year. The first phase is expected to commence commercial operations in 2017.

Reducing operational risk

Completion of the new operation is subject to board approval by both companies and conclusion of definitive agreements, as well as final engineering, refinement of capital estimates, and obtaining required permits and other approvals. "The Fernandina Beach project represents an excellent growth opportunity for our lignin business in a global market which for some time has been supply constrained”, says Per A. Sørlie, President and CEO of Borregaard. "Pursuing this opportunity with the leader in lignin-based chemistry significantly enhances the prospects for success while reducing operational and market-based risk,” says RYAM CEO Paul Boynton.

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