In a bid to focus on wood pulp business, Sateri Holdings has entered into a sale and purchase agreement with Pacific Viscose Limited to sell the former’s viscose staple fibre business. The value of transaction is estimated to reach more than EUR 690 million.
After the transaction is complete, Sateri will focus on further strengthening its dissolving wood pulp business, especially in the specialty grade segment.
“As part of the transaction, a subsidiary of the Group will also enter into an off-take agreement, whereby the Purchaser’s affiliate will buy all of the rayon grade dissolving wood pulp produced and sold by the Group for the next three years effective from 1 January 2015,” according to the company statement.
The speciality grade segment offers higher margins as compared to rayon grade dissolving wood pulp segment. In addition, there is less competition in the speciality grade due to its specialized nature and high entry barriers.
The move to focus on specialty grade dissolving wood pulp is expected to benefit Sateri in the long-term.
