BRAZIL – Duratex announced to its shareholders and the general market that, in accordance with the material fact disclosed on June 21, 2018, the feasibility analysis of engineering studies and negotiations with Lenzing AG have concluded to create a joint venture for the production and marketing of soluble cellulose.

With operations scheduled to begin in the first half of 2022, the new company will have an annual production capacity of 500,000 tons of soluble pulp and will be located in Brazil’s Triângulo Mineiro (MG) region, where infrastructure work will begin. The industrial investment will be approximately BRL 5.2 billion.

Through this partnership, Duratex intends to diversify the risks of the Company, expanding its range of activities to the pulp market, which has a lower exposure to the level of activity of the domestic market, as well as strengthening the generation of value for its shareholders and other stakeholders and prepare the company for future challenges.

Duratex contributes to the new venture its forestry knowledge and capacity, which are reflected in the efficient management of the plantations, with productivity indexes above the Brazilian and international average. At the same time, by allocating approximately 43,000 ha of FSC® certified woods to the soluble cellulose production, Duratex will complete the rationalization of its forest assets and make the company even more competitive, without affecting its capacity to supply its wood panel factories in the region with its own wood.

“Wood-based cellulosic fibers 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”, states Stefan Doboczky, CEO of the Lenzing Group.