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About Rayonier Advanced Materials
Rayonier Advanced Materials Inc. operates as a global leader of specialty cellulose materials with a broad offering of high purity cellulose specialties, a natural polymer used in the production of a variety of specialty chemical products, including liquid crystal displays, filters, textiles and performance additives for pharmaceutical, food and other industrial applications.
The company provides some of the highest quality high-purity cellulose pulp products that make up the essential building blocks for the company’s customers’ products while providing exceptional service and value. The company also produces a unique, lightweight multi-ply paperboard product and a bulky, high-yield pulp product. The company’s paperboard is used for production in the commercial printing, lottery ticket and high-end packaging sectors. The company’s high-yield pulp is used by paperboard producers, as well as in traditional printing, writing and specialty paper manufacturing.
Strategic Growth Investments
The company focuses its strategic investments in projects that optimize and align the company’s assets to meet the ever-growing demand for renewable products. The company’s portfolio is aligned with sustainability drivers, including the European Union Green Deal for the Renewable Energy Directive II. The company’s ongoing projects include:
The company’s investment in Anomera, who manufactures CNC, a patented, biodegradable product used as an ingredient in cosmetics and various industrial materials, at the company’s Temiscaming facility;
Development of a prebiotic for enhanced gut health in poultry and swine at the company’s Jesup facility, which is expected to support sustainable poultry and swine farming and provide a healthy alternative nutrient to enhance gut health;
Production of 2G bioethanol fuel at the company’s Tartas facility, intended to help meet the demand for Europe’s fast-growing biofuels market and further improve the sustainability of the company’s operating model. With production expected to begin in the first quarter of 2024, the company will be among the first in France to produce wood-based 2G bioethanol fuel, a product that is noncompetitive to the human food supply and is expected to help petrochemical companies improve the climate profile of their energy offerings in the European market;
Production of 2G bioethanol fuel at the company’s Fernandina facility, a multi-year project expected to have similar carbon impacts as the company’s Tartas bioethanol facility and may be used in additional market segments, including as a feedstock for sustainable aviation fuel; and
The company’s involvement with Altamaha Green Energy, a start-up entity bidding on an annual contract with Georgia Power to sell green electricity from a new plant to be constructed adjacent to the company’s Jesup facility. The multi-year project offers significant potential long-term benefits to RYAM.
The company’s strategic investment approach unlocks the capabilities of the company’s facilities and capitalizes on the sustainably harvested trees that the company uses as its primary feedstock.
The company operates the following business segments: High Purity Cellulose, Paperboard, and High-Yield Pulp.
In October 2023, the company engaged a financial advisor to explore the potential sale of the company’s Paperboard and High-Yield Pulp assets located at the company’s Temiscaming site. The process is ongoing for this strategic review, which is consistent with the company’s commitment to align the company’s portfolio with its long-term growth strategy and providing flexibility to pay down debt, reduce leverage and minimize earnings volatility.
High Purity Cellulose
The company’s High Purity Cellulose segment, and in particular, cellulose specialties products, is the primary driver of the company’s profitability. Cellulose specialties are natural polymers, used as raw materials to manufacture a broad range of consumer-oriented products, such as liquid crystal displays, impact-resistant plastics, thickeners for food products, pharmaceuticals, cosmetics, cigarette filters, high-tenacity rayon yarn for tires and industrial hoses, food casings, paints and lacquers. The company manufactures products tailored to the precise and demanding chemical and physical specifications of the company’s customers, achieving industry-leading purity and product functionality. The company’s ability to consistently manufacture high-quality cellulose specialties products is the result of the company’s proprietary production processes, intellectual property and over 95 years of technical expertise and knowledge of cellulosic chemistry.
In addition to cellulose specialties, a significant portion of the company’s production capacity is dedicated to manufacturing high-purity commodity products for absorbent materials and viscose applications. Absorbent materials, typically referred to as fluff fibers, are used as an absorbent medium in products such as disposable baby diapers, feminine hygiene products, incontinence pads, convalescent bed pads, industrial towels and wipes and non-woven fabrics. Commodity viscose pulp is a raw material required for the manufacture of viscose staple fibers which are used in woven applications, such as rayon textiles for clothing and other fabrics, and in non-woven applications, such as baby wipes, cosmetic and personal wipes, industrial wipes and mattress ticking. Cellulose specialties typically contain over 95 percent cellulose, while commodity products typically contain less than 95 percent cellulose.
The company’s specialized assets, capable of creating the world’s leading high purity cellulose products, are also suited for generating biofuels, bioelectricity and other biomaterials such as lignin and tall oils. The company’s 2G bioethanol project, for example, will capture residual sugars from the company’s existing pulp process, which the company will then use in the production of wood-based 2G bioethanol fuel. The company’s Tartas bioethanol facility is expected to be operational in the first quarter of 2024.
The company’s four production facilities have a combined annual production capacity of 1,045,000 MTs of cellulose specialties and commodity products. Of the company’s total annual capacity, the company dedicates 270,000 MTs of annual production to commodity products, primarily absorbent materials.
Wood fiber, chemicals and energy represent approximately 50 percent of the company’s per MT cost of sales. Labor, manufacturing and maintenance supplies, depreciation, manufacturing overhead and transportation costs comprise the rest of the company’s cost of sales.
Products
Cellulose Specialties
Cellulose specialties are a natural polymer primarily derived from either wood or cotton and are used as a principal raw material to manufacture a broad range of products. Cellulose specialties generally command a price premium and earn higher margins relative to other commodity wood pulp products. Cellulose specialties are a dissolving wood pulp product which target a combination of high purity and high viscosity. Unlike other wood pulps used for their physical properties, cellulose specialties are sought after for the unique chemical properties and reactivity they impart to downstream products.
Derived from wood, the company’s cellulose specialties require high levels of purity, consistency and process knowledge. The company’s products play a significant role in the company’s customers’ manufacturing processes, which require cellulose specialties of high purity and uniformity for efficient production. As such, the company’s customers demand products of the highest quality. To meet this demand, the company’s products are custom-engineered and manufactured to each customer’s unique specifications and undergo a stringent qualification process, resulting in the quality and consistency that allow the company’s customers to operate more efficiently.
Commodity Products
The company has the ability to shift its High Purity Cellulose segment manufacturing assets from cellulose specialties production to commodity absorbent materials and viscose pulp production. The company’s operating lines fluctuate production of cellulose specialties and commodity products based on market conditions and to generate the most attractive margins.
Absorbent materials, or fluff fibers, are typically used in consumer products such as baby diapers. These fibers provide a medium for fluid acquisition, distribution and retention in the products in which they are incorporated.
Biomaterials
The company is uniquely positioned to meet the rapidly growing demand for renewable materials and sustainable products. Fully unlocking the capabilities of the company’s biorefineries and the sustainably harvested trees the company uses as its primary feedstock is a core priority. Generally, a tree’s mass is consisted of 50 percent water and 50 percent ‘dry solids.’ Dry solids are consisted of roughly 40 percent cellulose and 60 percent other chemical compounds, including hemicellulose, lignin, sugars and other extractives. These chemical compounds can be utilized to produce sustainable biomaterials, including lignosulfonates, biofuels, prebiotics, crude tall oil, turpentine and bioelectricity.
The company generates and sells lignosulfonates and tall oil soap using these compounds. Lignosulfonates are used to produce a variety of products, including construction materials, dispersants, plant nutrients, leather tanning and fungicides, and tall oil soap is used as feedstock for producing crude tall oil. The company also produces bio-generated electricity utilizing renewable biomass. The company’s Tartas bioethanol facility is expected to be operational in the first quarter of 2024. When complete, this facility will produce 2G bioethanol, a non-food-based ethanol to be utilized as an environmentally-friendly fuel blend supporting transport decarbonization. Commercial sales of this 2G bioethanol are targeted to begin in the first quarter of 2024 under a long-term offtake agreement with a large international petrochemicals company.
Competition
Cellulose Specialties
The company’s major competitors include Bracell and Borregaard.
Commodity Products
The company’s major competitors for commodity viscose pulp include April/Bracell, Sappi, Lenzing, Aditya Birla Group and Sun Paper.
For absorbent materials, the company’s major competitors include International Paper, GP Cellulose, Paper Excellence Group, Klabin and Stora Enso.
Biomaterials
The company’s major biomaterials competitors in the lignosulfonates market include Borregaard and Domsjö Aditya Birla and in the bioethanol market include Borregaard and AustroCel Hallein.
Paperboard
The company manufacture paperboard in the Temiscaming plant in Quebec, Canada. The company’s production facility has an annual production capacity of 180,000 MTs of paperboard.
Wood pulp, chemicals and energy represent approximately 80 percent of the company’s per MT cost of sales. Labor, manufacturing and maintenance supplies, depreciation, manufacturing overhead and transportation costs represent the company’s remaining cost of sales.
Products
Products in the Paperboard business include packaging, printing documents, brochures, promotional materials, paperback book and catalog covers, file folders, tags and lottery tickets. The company is the only multi-ply paperboard producer in North America, with the company’s competition producing single ply solid bleached sulfite paperboard.
Competition
The company’s major paperboard competitors include WestRock, Graphic Packaging, Clearwater Paper, Sappi, Metsa Group and Billerud.
High-Yield Pulp
The company manufactures and markets high-yield pulp produced in the company’s Temiscaming plant in Quebec, Canada. The company’s Temiscaming plant has an annual production capacity of 290,000 MTs of high-yield pulp, approximately 65,000 MTs of which are used internally to produce paperboard.
Wood fiber, chemicals and energy represent approximately 40 percent of the company’s per MT cost of sales. Labor, manufacturing and maintenance supplies, depreciation, manufacturing overhead and transportation costs represent the company’s remaining cost of sales.
Products
The company produces its high-yield pulp primarily from hardwood aspen, maple and birch species. This unique fiber supply produces a highly sought-after bulky high-yield pulp product. High-yield pulp is used by paper manufacturers to produce paperboard, packaging, printing and writing papers and a variety of other paper products.
Competition
The company’s major high-yield pulp competitors include Winstone Pulp, Sappi, Millar Western, West Fraser, Paper Excellence, SCA and Estonia Cell.
Research and Development (R&D)
During the year ended December 31, 2023, the company’s R&D spend totaled $6 million.
Environmental Matters
The company’s manufacturing operations are subject to stringent federal, state, provincial and local environmental laws and regulations concerning air emissions, wastewater discharges, waste handling and disposal and assessment and remediation of environmental contamination, which impact the company’s ongoing operations and approximately 20 former operating facilities and third party-owned sites classified as disposed operations. These laws and regulations include the Clean Air Act, the Clean Water Act, the RCRA, the CERCLA and similar state laws and regulations impacting U.S. facilities, as well as requirements relating to ancillary matters such as financial assurance of the company’s legal obligations for facility closure and post-closure care. Similar laws and legal requirements also impact current and former operating sites in Canada and France, respectively.
History
Rayonier Advanced Materials Inc. was founded in 1926. The company was incorporated in 2014.
