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Akzo Nobel investing EUR 50 million in Brazil

29 May 2007 - Akzo Nobel's pulp and paper chemicals business, Eka Chemicals, has signed an agreement to supply, store and handle all chemicals for a greenfield pulp mill being built in Três Lagoas, Brazil. The new mill - known as the Horizonte Project - will have an annual production capacity of 1,250,000 tons of pulp, and was recently transferred to Votorantim Celulose e Papel (VCP) as part of an asset exchange.
 
Under the terms of the agreement, Eka Chemicals will establish a chemical island at the new site, mainly for the production of chlorine dioxide. In addition, Akzo Nobel's pulp and paper chemicals business will also expand its existing site at Jundiaí (São Paulo) where a new production line will produce 30,000 tons of sodium chlorate a year, most of which will be destined for the same Três Lagoas mill. The total investment for Akzo Nobel amounts to around EUR 50 million.
 
The new investment shall significantly expand Akzo Nobel's well established pulp and paper chemicals operations in Brazil, where the business already operates chemical islands at several mills. Eka Chemicals has also built up a strong business partnership with VCP, having successfully operated a chlorine dioxide plant at its pulp mill in Jacareí for the last five years.
 
Start up of the new mill - which will use wood exclusively from high yield eucalyptus plantations - is expected in 2009, with work on the company's new facility due to start immediately.