Neucel Specialty Cellulose Ltd., Port Alice, B.C., Canada, reports that Zhejiang Fulida Ltd., Hangzho, Zhejiang China, will make a direct minority investment in Neucel and has signed a long term supply agreement to procure Neucel's chemical cellulose product. Fulida is a major global producer of rayon. Neucel plans to use the investment to accelerate its capital plan targeted mainly at capacity expansion in addition to cost and quality improvements.
"Viscose rayon fiber production capacity has increased greatly in China and competition has become intense. With the relationship with Neucel, Fulida gains a smooth and stable supply of dissolving pulp materials," said Jainer Qi, CEO of Fulida. "The relationship provides Fulida with cost advantages and quality assurance, and it plays a positive role in extending the value chain of the business, enhancing core competence and expanding production capacity."
Bob Taylor, President and CEO of Neucel, said that "we are very excited to partner with Fulida given their leadership in the rayon market and strong growth. This partnership will enable us to gain an improved market presence in China and solidify our strong position in both the viscose and specialty markets. We remain committed to growth in both segments."
Neucel plans to deploy the available capital immediately to keep pace with high customer demand in the chemical cellulose market. This capital will significantly complement the funding provided by the Government of Canada's Pulp and Paper Green Transformation Program to further reduce its energy consumption.
Neucel produces hemlock based high-purity chemical cellulose that is used in a wide range of manufacturing processes including rayon filament for garments, pharmaceuticals, consumer products, film, food thickeners, LCD screens, and other products. It is owned by a consortium of investors, led by Wellspring Capital Management and GSC Group.
TAPPI
http://www.tappi.org/