Port Alice Neucel speciality cellulose mill sold to Chinese textile firm

The Neucel Specialty Cellulose mill in Port Alice, British Columbia has been sold to Fulida Group Holdings Ltd. of China.

Fulida will be taking over full ownership of the mill with Zhejiang Fulida Ltd, a limited company that bought a minority position in the mill in January 2010.

Financial terms of the transaction were not disclosed.

The mill was salvaged from bankruptcy after being sold, stripped of equipment and re-sold after the Doman Industries failure. As Neucel Specialty Cellulose, the mill has survived the market downturn, and the company is profitable. It is owned by a consortium of investors led by two U.S. financiers, Wellspring Capital Management and the Granite Street Capital Group.

The mill was converted to produce dissolving sulphite pulp and has been a success story in the area, employing 400 people. The cellulose it produces is hemlock based. It is used in a wide range of manufacturing processes including rayon filament for garments, pharmaceuticals, consumer products, film, food thickeners, LCD screens and other products.

“We are very pleased to become fully integrated into the Fulida organization given their leadership in the rayon market and their strong support of our Port Alice Mill. The new ownership enables Neucel to explore new growth opportunities while continuing our aggressive cost and capacity initiatives. Wellspring has been a visionary and dedicated owner of our business and we are very pleased to have helped make this a successful investment for them,” said Bob Taylor, President and CEO of Neucel who will continue to lead the business.

The number of dissolving sulphite mills worldwide is relatively small, but prices for the product are more than twice the price for northern bleached softwood kraft, the product used in paper and cardboard manufacturing that is produced by most B.C. mills.

“Viscose rayon fibre competition in China has become intense. With the purchase of Neucel, Fulida gains a stable supply of dissolving pulp along with cost advantages and quality assurance which extends the value chain of our business. I strongly believe that this purchase will ensure a stable, sustainable and rapid development for Neucel, and thus help it to further achieve its unique enterprise value,” said Jianer Qi, Chairman of Fulida Group Holdings. Fulida is one of the leading producers of rayon in the world with several awards to its credit within the Chinese textile industry.

Want to know more?
Chinese textile firm buys Port Alice mill – Demand for rayon, a silk substitute, puts pulp producers on priority list (Times Colonist)
Neucel.com
Press Release of the mill sale