NCT Continues Feasibility Study on South Africa Pulp Mill

April 4, 2006 (Press Release) - Pulp United (Pty) Limited, owned by NCT Forestry Co-operative Limited (NCT) will continue with the feasibility study into building a Eucalyptus-based BCTMP (bleached, chemi, thermo, mechanical pulp) mill at Richards Bay, South Africa.

The mill, with a capacity of 300,000 tonnes per year, would be the first of its kind to produce BCTMP from eucalyptus timber in South Africa.

In August 2005, Södra—the Swedish shareholder in Pulp United (formed to investigate the construction of the mill) withdrew from the project; NCT opted to purchase Södra's shares in the jointly-owned company, thus becoming the sole shareholder.

From October 2005 through to March 2006, the main effort has been on reviewing the probable cost of investment required.

"The focus has been to re-look at the cost of the construction of the plant as well as the provision of infrastructural requirements. The outcome of this has been very successful with substantial reductions achieved," says Peter Keyworth, Special Projects General Manager at NCT.

"As a consequence, on the recommendation of the Board of Pulp United, NCT's Board have decided to press on with the feasibility study," he continues.

The main issues to be dealt with in the coming months will be:

  • Negotiations with possible partners for marketing, technology and finance
  • Finalise a long term electricity supply agreement
  • Appoint a supplier for the main process machinery and overall process guarantees
  • Study some areas with potential for major cost improvement
  • Keep all tenderers informed about the progress, including taking precautions to extend the tender validity when necessary.

NCT should be in a position to make a final investment decision around September this year.

SOURCE: NCT Forestry Co-operative Limited

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