Expands high-end specialty capacity by 42,000 tons
Supports strategic customers' growth
Returns well above cost of capital
MEMPHIS, Tenn., Oct 25, 2011 (BUSINESS WIRE) --
Buckeye Technologies Inc. (NYSE:BKI) today announced that its Board of
Directors approved funding to increase the high-end specialty wood pulp
capacity by 42,000 tons at its Buckeye Florida "Foley" operation. The
cost of the project is expected to be approximately $79 million with an
anticipated rate of return of 15% to 20%. Engineering and design work is
nearing completion, and construction is expected to begin in January
2012 with project startup planned for December 2012. This investment
will be funded by cash flow from operations.
Buckeye's Chairman and Chief Executive Officer John Crowe said, "This
specialty expansion project will provide much needed high-purity
specialty volume for strategic customers in all of our high-end markets
including casings, tire cord, ethers, filtration, micro-crystalline
cellulose, and acetate. Additionally, this will improve our overall
plant product mix from 42% specialty wood pulp to just over 50%
specialty wood pulp while maintaining the Foley plant's existing total
capacity at 465,000 tons per year. This is the type of high-return
organic growth opportunity that we will continue to target as we
allocate our free cash flow to its highest and best use. We believe this
project will provide excellent value to our customers and our
shareholders."
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 estimated cost of the project, expected rate of return,
and the estimated timeline for the construction and startup of the
project. 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 periodic filings with the Securities and Exchange
Commission.
SOURCE: Buckeye Technologies Inc.
Buckeye Technologies Inc.
Steve Dean, 901-320-8352
Sr. Vice President
and Chief Financial Officer
or
Investor Relations
Daryn Abercrombie, 901-320-8908
www.bkitech.com
