Fortress Paper to Supply Dissolving Pulp to China
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Fortress Paper Ltd., Vancouver, B.C., Canada, has entered into dissolving pulp supply agreements with two producers of viscose fiber (rayon) products in China. The company will supply about 84,000 air dried metric tons (ADMT) of dissolving pulp per year at a purchase price based on prevailing market prices in China. Minimum and maximum prices are set at $1,200 per ADMT and $1,600 per ADMT, respectively. Fortress will begin to supply dissolving pulp in the third quarter of 2011, and continue for a five-year term with both companies.
The Fortress Specialty Cellulose Mill in Quebec, Canada, will supply the dissolving pulp. The mill is expected to have an annual production capacity of more than 200,000 ADMT when it is completed in mid-2011.
Chadwick Wasilenkoff, CEO of Fortress Paper, noted that "these dissolving pulp supply agreements will provide a hedge against potential volatility in future dissolving pulp prices, which we believe should provide greater normalized operating results in this segment."
An international producer of security and other specialty papers and products, Fortress Paper operates three mills, including one in Switzerland and one in Germany. The company's security papers include banknote, passport and visa papers and its specialty papers include non-woven wallpaper base products, and graphic and technical papers. Fortress Paper's pulp business includes NBHK produced at the Fortress Specialty Cellulose Mill, with plans to convert this capacity into dissolving pulp production along with the construction of a biomass-based cogeneration plant.
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