AkzoNobel has signaled its strategic intent to accelerate growth by investing close to €90 million in a new facility being built in Brazil. The plant, operated by the company's Pulp and Paper Chemicals business, Eka Chemicals, will supply the world's largest pulp mill.
The agreement - with Eldorado Celulose e Papel - emphasizes the importance of high growth markets to AkzoNobel and will help drive the medium-term strategy of doubling revenue in Brazil to €1.5 billion. It also underlines the value the company attaches to securing long-terms partnerships with customers.
The investment - AkzoNobel's biggest ever in Latin America - is centered on further expanding Eka Chemicals' sustainability focused Chemical Island concept. It will involve supplying, storing and handling all chemicals for the 1.5 million tons per year green field mill, which is being constructed in the northern part of Três Lagoas City. The mill is expected to come on stream in September 2012.
"This 15-year agreement confirms our intention to accelerate growth and expand our activities in the world's high growth regions," said Rob Frohn, the AkzoNobel Board member responsible for Specialty Chemicals. "We are about to make one of the biggest investments in our history, which emphasizes both the importance of Latin America to our growth ambitions and our commitment to the pulp and paper industry."
Added Pulp and Paper Chemicals General Manager Jan Svärd: "Future demand for pulp and paper chemicals in Latin America is projected to increase substantially over the next 15 years. This agreement therefore represents an exciting opportunity for us to expand our operations in the region and further underlines the value our customers attach to our Chemical Island concept."
He went on to explain that Eka Chemicals will be building a world scale sodium chlorate production unit to supply the projected demands of the Eldorado mill, which has been designed to accommodate three pulp lines. The new Eka Chemicals facility will also supply other key customers in Brazil. Work on the new pulp mill site started in June last year.
Commenting on the agreement, Eldorado President Rogerio D'Alcantara Peres, said: "Building the world's largest pulp mill requires working with reliable partners who can provide the best technology. AkzoNobel's proven Chemical Island concept, together with the company's world class expertise and strong commitment to sustainability, meant that they were a natural choice for this major project."
The new facility will expand Eka Chemicals' well established pulp and paper activities in Brazil, where the business already operates its Chemical Island concept at several mills, as well as running production units in Jacareí, Eunapolis, Três Lagoas, Rio de Janeiro and Jundiaí.