Duratex’s $1 Billion Joint Venture with Lenzing

Linklaters advised Brazilian wood panel manufacturer Duratex in its joint venture with Austrian cellulose fiber producer Lenzing to build a US$1 billion dissolving wood pulp (DWP) plant in Brazil.

Lenzing Group, world market leader in specialty cellulosic fibers and Duratex, the largest producer of industrialized wood panels of the Southern Hemisphere, agreed on the terms and conditions to form a joint venture to investigate building the largest single line dissolving wood pulp (DWP) plant in the state of Minas Gerais, close to Sao Paulo, Brazil. This decision supports the backward integration and the growth in specialty fibers, defined in Lenzing’s corporate strategy sCore TEN.

The joint venture will investigate the construction of a 450,000 t DWP plant, which is expected to become the largest and most competitive single line DWP plant in the world. Dissolving wood pulp is the key raw material for the production of Lenzing’s bio-based fibers. For the future operation, the two companies have secured a plantation of 43,000 hectares that will provide the FSC® certified biomass. The plantation is fully in line with Lenzing’s wood and pulp sourcing policy. The basic engineering and the application for required permits and merger clearances will now be started.

Lenzing will hold 51 percent of the joint venture which will operate the mill, while Duratex’s share will be 49 percent. The estimated cash investment by the joint venture for the construction of the DWP mill is expected to be somewhat above USD 1 bn (based on current FX rates, net of generic tax refunds and the outcome of the basic engineering study). The joint venture will supply the entire volume of dissolving wood pulp to the Lenzing Group. This step is an essential milestone in the group’s ambition to grow its specialty fibers business.

The final investment decision to build the dissolving wood pulp plant is subject to the outcome of the basic engineering studies and the approval by the respective supervisory boards.

Duratex SA manufactures reconstituted wooden boards geared to both furniture manufacturers and housing segments. The company, led by Antonio Joaquim De Oliveira, Carlos Henrique Pinto Haddad and Marcelo Jose Teixeira Izzo, in 2017 recorded $1.057 Billion Revenues.

Linklaters advised Brazilian wood panel manufacturer Duratex with a team including Alberto Luzárraga (Picture), Gabriel Silva, Andrew Compton, Timothy Leschke, Josh Feit and Isabella Correa.

BINDER GRÖSSWANG Rechtsanwälte GmbH advised Lenzing Group with Florian Khol, Michael Kutschera, Raoul Hoffer, Christine Dietz, Christian Wimpissinger, Hemma Parsché, Lukas Sebastian Swoboda and Christoph Schober.

In Brazil, Veirano Advogados advised Lenzing Group with Augusto Souza, Till Alexander Backsmann, Raphael Moreira Espírito Santo, Ana Beatriz de Almeida Lobo, Vanessa Felício, Diego Yago Rodrigues and Rodrigo Martins Duarte.

 

Involved fees earner: Michael Kutschera – Binder Grösswang Rechtsanwälte GmbH; Florian Khol – Binder Grösswang Rechtsanwälte GmbH; Hemma Parsché – Binder Grösswang Rechtsanwälte GmbH; Lukas-Sebastian Swoboda – Binder Grösswang Rechtsanwälte GmbH; Christoph Schober – Binder Grösswang Rechtsanwälte GmbH; Raoul Hoffer – Binder Grösswang Rechtsanwälte GmbH; Christine Dietz – Binder Grösswang Rechtsanwälte GmbH; Christian Wimpissinger – Binder Grösswang Rechtsanwälte GmbH; Augusto Cesar Barbosa de Souza – Veirano Advogados; Till Alexander Backsmann – Veirano Advogados; Ana Beatriz de Almeida Lobo – Veirano Advogados; Vanessa Felício – Veirano Advogados; Diego Yago Rodrigues da Silva – Veirano Advogados; Rodrigo Martins Duarte – Veirano Advogados; Raphael Moreira Espírito Santo – Veirano Advogados; Alberto Luzarraga – Linklaters; Gabriel Silva – Linklaters; Josh Feit – Linklaters; Isabella Correa – Linklaters; Timothy Leschke – Linklaters;

Law Firms: Binder Grösswang Rechtsanwälte GmbH; Veirano Advogados; Linklaters;

Clients: Duratex S.A.; Lenzing AG;

 

 

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Author: Ambrogio Visconti.