International Paper and Fibria Extend Option to Build Paper Machine in Brazil
Memphis, Tennessee, USA, 16 Decembe 2009 -- /PR Newswire/ -- International Paper (NYSE: IP) and Fibria (formerly Votorantim Celulose e Papel) have agreed to extend IP's option to build a second uncoated freesheet paper machine at the Tres Lagoas mill site in Brazil. This option, which would have expired on 31 January 2010, has been extended until 31 January 2013.
In 2006, IP entered into a 90-year agreement in which Fibria agreed to furnish pulp and certain utilities to IP's co-located paper mill for the production of up to 250,000 tons of paper annually. The agreement also granted IP the option to build a second paper machine and to be provided with certain utilities and pulp to produce up to an incremental 250,000 tons of paper annually.
The three-year extension is the only change to the original agreement. If IP were to exercise this option, the second paper machine would need to begin production between 31 January 2014 and 31 January 2015.
This agreement to extend the option, which is aligned with the business strategies of both companies, will allow more time for the completion of all technical and commercial analyses, and will provide greater flexibility to start up the second machine in line with Latin American market demand growth.
International Paper (NYSE: IP) is a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia, and North Africa. Its businesses include uncoated papers and industrial and consumer packaging, complemented by xpedx, the company's North American distribution company. Headquartered in Memphis, Tennessee, the company employs approximately 58,000 people in more than 20 countries and serves customers worldwide. Net sales in 2008 were approximately USD 25 billion. For more information about International Paper, its products, and stewardship efforts, visit www.internationalpaper.com.