Ahlstrom to form a joint venture for specialty paper production in Brazil

Ahlstrom Corporation Stock Exchange Release 9.5.2007

 

Ahlstrom, a global leader in fiber-based materials, today announced that it has signed an agreement with Brazilian Votorantim Celulose e Papel (VCP) to form a joint venture for specialty paper production in Brazil. Ahlstrom will hold 60% and VCP 40% of the shares in the joint venture. The price for Ahlstrom's shareholding is approximately EUR 80 million and the transaction is expected to be EPS enhancing from 2007.

In February 2007, the parties announced they had signed a Memorandum of Understanding to form a joint venture. The assets in the joint venture, currently owned by VCP, comprise a paper machine, an offline coater and extensive finishing equipment at the Jacarei mill, close to São Paulo. The annual production capacity of the paper machine is approximately 110 000 tons and net sales approximately EUR 100 million.

 

The joint venture will be part of Ahlstrom's Specialty Papers segment serving mainly the labeling applications and certain flexible packaging markets. Additionally, it will continue to produce coated and uncoated paper grades for other end uses. Currently, the majority of the paper production is targeted to the local markets but Ahlstrom aims to expand the customer base by utilizing its global sales network.

 

The Jacarei facility is an integrated pulp and paper mill and one of the most modern and competitive eucalyptus pulp producers in the world with a production capacity of 1.1 million tons per year. The parties have also negotiated a long-term agreement whereby VCP will supply eucalyptus pulp, utilities and other services to Ahlstrom's operations at the Jacarei mill at competitive prices.

"The joint venture with the state of the art assets allows us to enter the rapidly growing labeling and packaging markets in Latin America. In addition, it further strengthens our position as the global leader in the specialty paper markets. After the closing of the transaction, Latin American markets will generate approximately 10% of Ahlstrom's net sales", comments Jukka Moisio, President and CEO of Ahlstrom.

The deal is expected to be closed during the third quarter of 2007, and is subject to antitrust clearances. Under the terms of the agreement, Ahlstrom has an option to purchase the remaining share in the joint venture held by VCP after two years time.

 

The global market for Ahlstrom's label and packaging papers is estimated to grow 3-4% annually with the double-digit growth rates seen in Latin America and Asia.

 

Ahlstrom Corporation

Jukka Moisio, President & CEO

 

 

 

 

Jukka Moisio, President & CEO, Ahlstrom Corporation, tel. +358 (0)10 888 4700
Diego Borello, Senior Vice President, Label and Packaging Papers,
Ahlstrom Corporation, tel. +39 011 92 60 193
Risto Anttonen, Senior Vice President, Commercial Operations, Ahlstrom Corporation, tel. +358 50 597 8400

Distribution:
Helsinki Stock Exchange
Main media
www.ahlstrom.com

 

 

Votorantim Celulose e Papel (VCP) is part of the Votorantim Group, a major Brazilian conglomerate. VCP is one of the leading integrated pulp and paper manufacturer in Latin America with four manufacturing sites and a harbor. In 2006, VCP's net sales amounted to USD 1.3 billion, EBITDA to USD 487 million and EBIT to USD 285 million. VCP's shares are listed on the São Paulo Stock Exchange and on the ADR list of the New York Stock Exchange.

 

Ahlstrom is a global leader in the development, manufacture and marketing of high performance fiber-based materials. Nonwovens and specialty papers, made by Ahlstrom, are used in a large variety of everyday products, e.g. in filters, wipes, flooring, labels, and tapes. The company has a strong market position in several business areas in which it operates, built upon the company's unique fiber expertise and innovative approach. Ahlstrom's 5,700 employees serve customers via sales offices and production facilities in more than 20 countries on six continents. In 2006, Ahlstrom's net sales amounted to EUR 1.6 billion. Ahlstrom's share is listed on the Helsinki Stock Exchange. The company website is www.ahlstrom.com.