Borregaard (BRG), Norway, and Rayonier Advanced Materials (RYAM), Jacksonville, Fla., USA, have concluded a market, technical, and engineering analysis regarding a new lignin operation at RYAM’s Fernandina Beach site in Florida to serve the growing demand for natural lignin-based products. The final review of the investment by the companies’ boards of directors is anticipated during the second half of 2016 upon receipt of final permits and incentives from government entities. If the companies elect to proceed, operations are expected to commence approximately 18 months later.

Cost of construction of the lignin plant is expected to be $135 million over two phases of the project. Phase one, which will have a lignin capacity of 100,000 metric tons, is estimated to cost $110 million. An estimated incremental $25 million will be required in phase two to increase the total capacity to 150,000 metric tons. LignoTech Florida intends to access the debt markets to fund a portion of the capital requirements.

Lignin, a natural component of wood, is a co-product of the sulfite cellulose manufacturing process. The new operation will process the lignin into value-added products that provide environmentally friendly alternatives to fossil fuel-based products used globally in construction, agriculture, and other industrial applications.

The new company, LignoTech Florida LLC, is to be owned 55% by Borregaard and 45% by RYAM.

Rayonier Advanced Materials is a global supplier of high-purity, cellulose specialties natural polymers for the chemical industry. Working closely with its customers, the company engineers natural polymeric chemical chains to create dozens of customized high-purity performance fibers at its plants in Florida and Georgia. Rayonier Advanced Materials' intellectual property and manufacturing processes have been developed over 85 years, resulting in unique properties and very high quality and consistency. Upon completion of the previously announced strategic realignment of assets in Jesup, Ga., the company's facilities will have the capacity to produce approximately 485,000 tons of cellulose specialties for use in a wide range of industrial and consumer products such as filters, cosmetics, and pharmaceuticals and approximately 245,000 tons of commodity products. 

Borregaard ASA operates the world’s most advanced biorefinery. By using natural, sustainable raw materials, Borregaard produces advanced and environmentally friendly biochemicals, biomaterials and bioethanol that replace oil-based products. The Borregaard Group has 1,050 employees in 16 countries and had revenues in 2015 of approximately $500 million. The lignin business constitutes close to 50% of the Group’s turnover with plants in seven countries.