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Sateri's VSF production volume up by 76% in 2011

02 Apr '12

6 min read

The Group's strategy is to become a global leader in this market, particularly in the acetate segment.

Sateri is also committed to investing further in its vertically integrated business platform, which it believes is a source of competitive advantage. The Group will continue to manage dynamically the production and sales mix of its DWP and VSF products in order to maximize shareholder value from its integrated business platform. Sateri will continue to broaden its customer base in North America and Europe in targeted segments for DWP and increase its market share in VSF in China.

In 2011, the Group obtained all necessary regulatory licenses to proceed with its Greenfield VSF project in Fujian, China, which is expected to be operational in the second half of 2013, with a design capacity of 200,000 metric tons per annum.

Sateri will also continue to explore the feasibility of further greenfield or brownfield expansions, particularly at its existing manufacturing locations, and/or acquisition opportunities, if they meet our stringent strategic and financial return targets.

Whilst prospects for the global macroeconomic environment in 2012 and their impact on our business remain unclear, Sateri is confident that it has the right business strategy in place to position itself optimally to meet the challenges that lie ahead.

Although the current market remains soft, with spot market prices in the first quarter of 2012 for rayon-grade pulp and VSF significantly lower than the average selling prices in 2011, the Group believes that it is well positioned to operate more profitably than its competitors owing to its flexible and integrated business model, and competitive cost structure. Investment in the Fujian project will also deliver a better balance between the Group's DWP and VSF manufacturing capacity. Strong operating cash flow and conservative balance sheet management will also support the Group's ability to grow further in future and deliver attractive long-term returns to its shareholders.

Mr. Hoon concluded, “We will continue to execute inexorably our two-pronged strategy of integrating our rayon operations and expanding our specialty-grade pulp business. Despite the pricing volatility experienced in 2011, end-user demand for VSF products in China continues to grow, driven by the rising middle-class and continued urbanization across the country. We believe that we have the best platform not only to withstand current market headwinds but also to capture future opportunities when the market improves.”

Sateri Holdings Limited is a leading global specialty cellulose company, producing dissolving wood pulp and viscose staple fiber in its mills in Brazil and China, namely Bahia Specialty Cellulose and Sateri (Jiangxi) Chemical Fiber, respectively.

Sateri Holdings Limited