Arnhem, the Netherlands, May 24, 2007 - Akzo Nobel's pulp and paper chemicals business, Eka Chemicals, has signed an agreement to supply, store and handle all chemicals for a greenfield pulp mill being built in Três Lagoas, Brazil.
The new mill - known as the Horizonte Project - will have an annual production capacity of 1,250,000 tons of pulp, and was recently transferred to Votorantim Celulose e Papel (VCP) as part of an asset exchange.
Under the terms of the agreement, Eka Chemicals will establish a chemical island at the new site, mainly for the production of chlorine dioxide. In addition, Akzo Nobel's pulp and paper chemicals business will also expand its existing site at Jundiaí (São Paulo) where a new production line will produce 30,000 tons of sodium chlorate a year, most of which will be destined for the same Três Lagoas mill. The total investment for Akzo Nobel amounts to around EUR 50 million.
"Accelerating growth in our core markets is a key element of the company's global strategy," said Leif Darner, the Akzo Nobel Board member responsible for Chemicals. "This agreement - which runs for 15 years upon start up of the new mill - also emphasizes our commitment to expanding our activities in one of the world's most rapidly growing regions."
The new investment will significantly expand Akzo Nobel's well established pulp and paper chemicals operations in Brazil, where the business already operates chemical islands at several mills. Eka Chemicals has also built up a strong business partnership with VCP, having successfully operated a chlorine dioxide plant at its pulp mill in Jacareí for the last five years.
Commenting on the agreement, CEO of VCP, Jose Luciano Penido, said: "We are very pleased to have awarded this contract to Eka Chemicals. They are a proven, reliable partner with first class technology and expertise and we look forward to developing our business together in the years ahead."
Added Jan Svärd, General Manager of Akzo Nobel's pulp and paper chemicals business: "As a leading supplier of pulp and paper chemicals in Brazil, we consider Três Lagoas to be a great opportunity to extend our relationship with VCP."
Start up of the new mill - which will use wood exclusively from high yield eucalyptus plantations - is expected in 2009, with work on the company's new facility due to start immediately.
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Akzo Nobel is a Fortune Global 500 company and is listed on both the Euronext Amsterdam and NASDAQ stock exchanges. It is also included on the Dow Jones Sustainability Indexes and FTSE4Good Index. Based in the Netherlands, we are a multicultural organization serving customers throughout the world with coatings, chemicals and human and animal healthcare products. We employ around 62,000 people and conduct our activities in these four segments, with operating subsidiaries in more than 80 countries. Consolidated revenues for 2006 totaled EUR 13.7 billion. The financial results for the second quarter will be published on July 24, 2007.
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