Rayonier and Borregaard have effected a letter of intent to develop a 150,000 metric ton capacity production line for lignin, a cellulose-derived raw material where global supply and demand imbalance invites price spikes of products including concrete admixtures. The 45/55 joint venture will be based at the Fernandina Beach, Fla., cellulose fiber processing plant of minority partner Rayonier.
Majority partner Borregaard cites world leadership in lignin-based products used for concrete plasticizers and superplasticizers, and operates New Jersey, Texas and Wisconsin sites under LignoTech USA Inc. The Fernandina Beach production line would increase overall LignoTech product capacity 30 percent, and represents what Borregaard CEO Per Sørlie calls “an excellent growth opportunity for our lignin business in a global market which for some time has been supply constrained.”
“This partnership between the world’s leader in cellulose specialties and the global leader in lignin-based products is significant for both companies,” adds Rayonier CEO Paul Boynton. “[It] advances our strategy of leveraging the value of our assets and co-products while further enhancing the competitive position of our Fernandina Beach plant.”
A natural component of wood and co-product of cellulose specialties manufacturing, lignin is currently used at the northern Florida operation for its energy value. The Borregaard-Rayonier venture would process the dispersing agent into higher value, environmentally friendly alternatives to petroleum-based chemicals used globally in construction and industrial applications. Officials anticipate an aggregate capital investment of $110 million over five years and two phases, the first expected to commence commercial operation in 2017. Realization of the JV is subject to board approvals and conclusion of definitive agreements, plus final engineering, refinement of capital estimates, and obtaining required permits and related clearances.