ARNHEM, The Netherlands, Aug. 8, 2003 (PRIMEZONE) -- Eka Chemicals, Akzo Nobel's (Nasdaq:AKZOY) pulp and paper chemicals business unit, has secured a 15 year supply agreement for the delivery of chemicals to the new Veracel pulp mill at Eunapolis in the state of Bahia, Brazil, jointly owned by Aracruz Celulose S.A. and Stora Enso Oyj. On completion in May 2005, the Veracel mill will be the world's largest single-line bleached eucalyptus pulp mill, with an output of around 900,000 tons per year.
As a consequence, Eka Chemicals will build and operate a "Chemical Island" adjacent to the pulp mill, which will include a chlorine dioxide plant with a 45 tons per day capacity and an oxygen production unit. The company will also build and manage the tank farm, and will handle all the pulp production process chemicals required by Veracel.
In addition, the project includes construction of a 50,000 tons per annum sodium chlorate plant, which will serve not only Veracel but also other key Eka Chemicals customers in the region. The total investment for the Chemical Island and the chlorate plant amounts to around EUR 50 million.
"The Veracel project provides a great opportunity to make an excellent investment servicing key customers in a country which shows good growth potential for this segment of our business. It clearly demonstrates Eka Chemicals' strong commitment to the pulp and paper industry for the future," said Dag Stromqvist, Member of Akzo Nobel's Board of Management responsible for Chemicals. "The new sodium chlorate plant will complement our existing Jundiai location in Brazil and will serve customers throughout the Brazilian market."
The Veracel project marks another step in Eka Chemicals' ambition to provide pulp mills with their whole range of pulp making chemicals "over the fence." The concept includes handling the generation of chlorine dioxide on site, a process which is usually managed by the mill. This allows both the pulp mill and the chemical supplier to focus on their core operations and enhances both efficiency and safety.
"The pulp and paper industry in South America in general and in Brazil in particular is expanding rapidly, mainly based on the supply of fiber from fast-growing eucalyptus plantations," said Jan Svard, President of Eka Chemicals. "It is the aim of Eka Chemicals to continue to supply the industry with chemicals from cost efficient local production in cooperation with the pulp and paper mills."
Note for the editor
Akzo Nobel, based in the Netherlands, serves customers throughout the world with healthcare products, coatings and chemicals. Consolidated sales for 2002 totaled EUR 14 billion. The Company currently employs approximately 66,000 people in more than 80 countries. Financial results for the third quarter will be published on October 17, 2003.
Eka Chemicals AB, Bohus, with 3,000 employees in 30 countries, is a business unit within Akzo Nobel. In 2002, turnover amounted to EUR 969 million. Eka Chemicals is a leading supplier of bleaching chemicals, paper chemicals and systems for the pulp and paper industry throughout the world, and in addition supplies special chemicals to the pharmaceuticals industry, water treatment operations, the electronics industry etc.
Veracel Celulose S.A. founded in 1991, is today jointly owned by Aracruz Celulose S.A., Rio de Janeiro, with a pulp mill in Esperito Santo, and Stora Enso Oyj, the worlds second largest producer of pulp and paper. On May 8, 2003 the owners announced their decision to build a 900,000 tpy eucalyptus pulp mill. Start up is scheduled to 2005. The company will employ 2,000 people and create around 8,000 indirect jobs. Veracel has 70,000 hectares of privately owned eucalyptus plantations, interspersed with 71,000 hectares of native forest
Internet www.akzonobel.com www.eka.com www.veracel.com.br/in_home.htm
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This press release contains statements, which address such key issues as Akzo Nobel's growth strategy, future financial results, market positions, product development, pharmaceutical products in the pipeline, and product approvals. Such statements should be carefully considered and it should be understood that many factors could cause forecasted and actual results to differ from these statements. These factors include, but are not limited to price fluctuations, currency fluctuations, developments in raw material and personnel costs, physical and environmental risks, legal issues, and legislative, fiscal, and other regulatory measures. Stated competitive positions are based on management estimates supported by information provided by specialized external agencies. For a more complete discussion of the risk factors affecting our business please refer to our Annual Report on Form 20-F filed with the United States Securities and Exchange Commission.
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