Buckeye's CEO Presents At UBS Global Paper & Forest Products Conference (Transcript)
Looking at slide number four, Buckeye is a leading producer of value added cellulose-based specialty products. Our specialty pulps are made from both wood and cotton linter fibers which undergo chemical processes.
They go into many of the niche markets displaced on this slide and their prices are generally higher and more stable than traditional paper pulp of lower purity viscose is like lower -- traditional paper pulps are lower-purity viscose dissolving pulps. They are also highly technical in nature which limits competition.
This is our pulp pyramid. Our specialty pulps are at the top of this pyramid they are most difficult to produce and have the highest level of purity or alpha cellulose content. We are focused on the 94% to 99% alpha area. Low end dissolving namely viscose use for producing rayon is round the 92% alpha level.
In addition, we produce fluff pulp which is mainly used in absorbent end applications. It is represented by the green portion of the pyramid, fluff pulp is traditionally been more commodity like although it has been more stable in the recent years. In fact, we attribute to demand growth, which we estimated about 4% per year, primarily out of emerging markets.Over the last 12 months, the fluff pulp price has declined after reaching record levels. However, since a recent of low of $910 per ton, the recent index has generally trended upwards and was $940 per ton last week. Buckeye fluff pulp has priced up this index. 90% of the world’s fluff pulp is produced in Southern United States due to the favorable absorbency characteristics for diapers, feminine care and other products that the Southern Yellow Pine wood provides. No one is building a new fluff pulp mill in the Southern U.S. and has not done so for many years due to the cost and issues residing on. While several existing paper pulp mills have recently converted to fluff there are also a couple of convergences away from fluff including projects we are undertaking to increase our capacity of higher purity pulps. I will discuss this product -- project in more detail later. Bottom line the fluff pulp demand is growing at a good rate and long-term supply has somewhat limited. Read the rest of this transcript for free on seekingalpha.com
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