Buckeye Technologies Inc. (NYSE:BKI) today announced that its Board of Directors has approved funding for a comprehensive evaluation of our Florida mill’s potential to further increase its high-purity specialty wood pulp capacity. Buckeye's high-end specialty wood pulp grades include ethers, high strength viscose, filtration and acetate, which are used in the production of food and pharmaceutical products, food casings, tire cord, filtration media and acetate tow. The global demand for these products is growing and Buckeye has a proven history of producing these technically demanding grades. Buckeye's specialty wood pulp production continues to be sold out and this potential expansion would help meet growing customer demand in these high-end applications.
Buckeye's Chairman and Chief Executive Officer John Crowe said, "Currently the lead option in this evaluation is to increase our Florida mill’s high-end specialty capacity by 30,000 metric tons with a target startup date at the end of 2012. The overall capacity of the mill would remain at its current 465,000 ton per year level, but the mix of high-end specialty production would increase. In addition to the mix improvements, we plan to further enhance the performance attributes of the fluff pulp produced at our mill. We expect this project would generate returns significantly above our cost of capital. We believe this option could provide excellent value to our customers and our shareholders. We intend to complete our evaluation and make a final decision on the potential expansion in August 2011."
Note Regarding Forward-Looking Statements
This press release also contains forward-looking statements within the meaning of the federal securities laws and is intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” generally can be identified by the use of forward-looking terminology such as “assumptions,” “target,” “guidance,” “outlook,” “plans,” “projection,” “may,” “will,” “would,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “potential,” or “continue (or the negative or other derivatives of each of these terms or similar terminology). The “forward-looking statements” include, without limitation, statements regarding the economic outlook for the Company and the demand for its products, expected cost reductions associated with our recent move to one-machine operation at our Delta plant and the completion of our Foley energy independence project, and expected levels of cash flow and debt reduction. These statements are based on management’s estimates and assumptions with respect to future events and financial performance and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results could differ materially from those projected as a result of certain factors. A discussion of factors that could cause results to vary is included in the Company’s Annual Report on Form 10-K and other period filings with the Securities and Exchange Commission.
Steve Dean, 901-320-8352
Senior Vice President and Chief Financial Officer
Daryn Abercrombie, 901-320-8908