Austria's Lenzing and Brazil's Duratex to build $1 billion pulp mill

VIENNA (Reuters) - Austrian cellulose fibres producer Lenzing and Brazilian wood panels maker Duratex agreed to build a $1 billion dissolving wood pulp plant in Brazil, the companies said.

The decision is in line with Lenzing’s strategy of growing its specialty fibres business, the Austrian group said, adding it will hold 51 percent in a venture with Duratex that will operate the mill in the state of Minas Gerais, close to Sao Paulo.

“The joint venture will investigate the construction of a 450,000 tons dissolving wood pulp (DWP) plant, which is expected to become the largest and most competitive single line DWP plant in the world,” Lenzing said in a statement.

Dissolving wood pulp is the key raw material for Lenzing’s fibres.

The final investment decision to build the plant is subject to the outcome of basic engineering studies and approval by the respective supervisory boards, the Austrian group said.

Reporting by Kirsti Knolle; editing by David Evans