Filed under: Dissolving Pulp

Market Demand For Dissolving Pulp Increasing

by on Aug 4th, 2010

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With the demand and cost of cotton on a continual upswing, more and more pulp and paper manufacturers have been stepping into the textile markets to provide dissolving pulp, a pulp product used to make rayon.

A new study released by RISI, a leading information provider for global forest products, show that the global market demand for dissolving pulp is increasing the world over.

In response, pulp manufacturers are stepping up their game.

“There isn’t enough dissolving pulp to feed the market demand for rayon,” Chadwick Wasilenkoff, CEO and Chairman of Fortress Paper, told The Globe and Mail this week.

Fortress Paper – a newcomer to the pulp industry – purchased a near-bankrupt mill in Thurso, Quebec this past spring with the intent of converting it into a highly specialized dissolving pulp producer in order to meet these market demands.

The decision – apparently – was a wise one.

The RISI study reports “dissolving pulp is one of the few growth markets in the pulp and paper industry today.” Key to the product’s success, the report continues, is “a rapidly growing middle class in China and India” who illustrates a high demand for rayon products and clothing.

The textile industry, however, isn’t the only factor driving the dissolving pulp market.

Some Canadian companies, such as Quebec’s Tembec, have seen tremendous increases after markets surged following an earthquake in Chili and a strike in Sweden that impacted the global paper pulp supply. Also impacted was Fortress Paper’s Thurso mill.

“The NBHK market, which was in a severe downturn, turned up,” wrote Tony Wanless in BC Business earlier this month. “Suddenly, the plant that was closed because of low NBHK prices was turning a profit that will continue during the conversion [of the mill to a dissolving pulp producer].”

Once their mill conversions are complete, Fortress Paper expects to produce more than 200,000 tonnes of dissolving pulp annual to sell to textile markets around the world.

In the last five years, the rayon market has grown by 7 per cent globally, and over 10 per cent in China alone.

SOURCES:
RISI: “RISI Releases New Global Dissolving Pulp Cost Benchmarking Data”
RISI: “Global Dissolving Pulp Cost Benchmarking Data”
Forest Talk: “Tembec Posts Quarterly Profit of $59 Million”
The Globe and Mail: “Quebec Mill Sees New Life In Rayon Market”
BC Business: “Outside The Box Business Strategies”

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