AV Group to Expand Capacity for Dissolving Pulp in Canada


Fredericton, New Brunswick, Canada, 15 August 2007 -- /PRNewswire/ -- The AV Group, a joint venture of the Aditya Birla Group of India and Tembec of Canada, today announced ambitious expansion plans for the production of dissolving pulp, the main raw material used in the manufacture of viscose staple fiber (rayon).

As a result of mill conversion plus implementing new technologies and strategies, AV Group will increase dissolving pulp capacity at its two New Brunswick mills in Atholville and Nackawic by 300,000 a.d. metric tons/year over the next two years.

"We are very excited about the proposed plans to increase the capacity of our current dissolving pulp operations in New Brunswick," said Peter Vinall, president and CEO of AV Group. "The steps are a testament to the company's confidence in our Canadian operations, and assuming a successful plant conversion in Nackawic and our ability to secure competitively priced wood and energy, we will press forward with these plans. The move is also part of Aditya Birla Group's global sourcing strategy which includes the evaluation of additional pulp supply options to meet their global viscose staple fiber capacity expansion plans."

AV Cell and AV Nackawic Capacity Projections

By mid-2008, as a result of a series of debottlenecking projects that are already underway, the AV Cell plant in Atholville will increase its production of dissolving pulp from its current level of 116,000 a.d. metric tons/year to 126,000 a.d. metric tons/year. By 2009, the company is expected to reach 140,000 a.d. metric tons/year by using a unique biorefinery technology.

With the completion of the CAD 35 million conversion of the AV Nackawic mill from paper pulp to dissolving pulp in January 2008, production will ramp up to a rate of 540 a.d. metric tons/day over a three month period. Further optimization projects will increase production levels to 600 a.d. metric tons/day, taking the annual capacity to 210,000 a.d. metric tons by the end of 2008. In addition, a project has been launched that will leverage biorefinery technology to overcome recovery boiler limitations and allow an annual production rate of 280,000 a.d. metric tons/year during 2009, contingent on securing an adequate wood supply.

Independently, Aditya Birla Group has established a team that is actively involved in identifying and evaluating additional pulp opportunities to support their viscose staple fiber capacity expansion plans worldwide. The scope of the search includes North America, Russia, and other Western countries and following a final review of the opportunities appropriate decisions are expected to be taken in the next few months.

Source: AV Group