Rayonier Advanced Materials Announces Strategic Repositioning
30 July 2015 - 10:00PM
Business Wire
- Improves cost position at Jesup,
Georgia facility
- Reduces cellulose specialties capacity
by 190,000 tons or 28 percent
- Reinvigorates commitment to fluff
products with capacity increase of 11 percent
Rayonier Advanced Materials Inc. (NYSE:RYAM) announced today a
$25 million investment to better align assets to current market
conditions, improve operating efficiency and increase commodity
throughput.
In response to the persistent imbalance of supply and demand in
the cellulose specialties market, the Company will reconfigure its
asset base to modify its 190,000 ton C-line at the Jesup plant for
the permanent production of commodity products, specifically fluff
and viscose. Certain assets that were installed on the C-line
during the cellulose specialties expansion will be repositioned to
the A-line to replace less efficient equipment. Upon completion in
the first quarter of 2016, the Company’s overall cellulose
specialties capacity will be reduced by 190,000 tons, or 28
percent, while its annual fluff and viscose production capacity
will increase by approximately 11 percent to 245,000 tons annually.
The Company's strategic repositioning is expected to reduce costs
by approximately $14 million annually, in part driven by a
reduction of 43 manufacturing positions, and requires a one-time,
non-cash write-off of $28 million related to abandoned assets.
"In light of our asset optimization initiatives that
balance our capacity with our existing sales volume, we are
de-emphasizing cellulose specialties volume growth,” said Paul
Boynton, Chairman, President and Chief Executive Officer. "As
a result, we will be focused on exceeding the expectations of our
cellulose specialties customers, making long-term commitments to
our fluff customers, driving growth through innovation and
improving profitability across our asset base.”
Boynton noted that, despite reducing capacity, the Company
remains fully committed to serving its cellulose specialties
customers, as evidenced by its investment in its three state-of-the
art production lines, including the enhanced A-line. “Today’s
announcement will not alter our ability to provide our customers
with the high-quality products, superior technical support, and
security of supply that are critical to their operations,” said
Boynton.
More information regarding RYAM’s strategic repositioning can be
found on its website www.rayonieram.com under presentations in the
investor section.
About Rayonier Advanced Materials
Rayonier Advanced Materials is the leading global supplier of
high-purity, cellulose specialties natural polymers for the
chemical industry. Working closely with its customers, the Company
engineers natural polymeric chemical chains to create dozens of
customized high-purity performance fibers at its plants in Florida
and Georgia. Rayonier Advanced Materials' intellectual property and
manufacturing processes have been developed over 85 years,
resulting in unique properties and very high quality and
consistency. The Company’s facilities can produce up to 675,000
metric tons of cellulose specialties products annually for use in a
wide range of industrial and consumer products such as filters,
cosmetics and pharmaceuticals. Upon completion of the strategic
realignment of assets in Jesup, the Company's facilities will have
the capacity to produce approximately 485,000 tons of cellulose
specialties and approximately 245,000 tons of commodity products.
Rayonier Advanced Materials is consistently ranked among the
nation’s top 50 exporters and delivers products to 79 ports around
the world, serving customers in 20 countries across five
continents. More information is available at www.rayonieram.com.
Forward-Looking Statements
Certain statements in this document regarding anticipated
financial, business, legal or other outcomes, including business
and market conditions, outlook and other similar statements
relating to Rayonier Advanced Materials’ future events,
developments or financial or operational performance or results,
are “forward-looking statements” made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995
and other federal securities laws. These forward-looking statements
are identified by the use of words such as “may,” “will,” “should,”
“expect,” “estimate,” “believe,” “intend,” “anticipate” and other
similar language. However, the absence of these or similar words or
expressions does not mean that a statement is not forward-looking.
While we believe that these forward-looking statements are
reasonable when made, forward-looking statements are not guarantees
of future performance or events and undue reliance should not be
placed on these statements. Although we believe that the
expectations reflected in any forward-looking statements are based
on reasonable assumptions, we can give no assurance that these
expectations will be attained and it is possible that actual
results may differ materially from those indicated by these
forward-looking statements due to a variety of risks and
uncertainties.
Such risks and uncertainties include, but are not limited to:
competitive pressures in the markets in which we operate; our
ability to complete the described operational realignment within
the planned cost and timing parameters and achieve the anticipated
benefits; changes in cellulose specialties and commodity product
supply, demand and pricing and uncertainties relating to general
economic, political, business, industry, regulatory and market
conditions.
Other important factors that could cause actual results or
events to differ materially from those expressed in forward-looking
statements that may have been made in this document are described
or will be described in our filings with the U.S. Securities and
Exchange Commission, including our Annual Report on Form 10-K.
Rayonier Advanced Materials assumes no obligation to update these
statements except as is required by law.
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Rayonier Advanced Materials Inc.Media:Russell Schweiss,
904-357-9158orInvestors:Beth Johnson, 904-357-9136
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