AMSTERDAM: Accsys, the fast-growing and eco-friendly firm that mixes chemistry and technology to create sustainable wooden constructing products, has concluded a final funding decision to assemble and function a brand new Accoya manufacturing facility inside the USA, a assertion noted.
Final Investment Decision
Accsys and Eastman Chemical Company have accomplished the remaining planning workstreams required and made the ultimate funding decision to proceed with the development of the US facility.
Furthermore, all key commercial agreements, together with financial institution loans totalling US$80 million, are now in place. Construction preparations have commenced, and workers are due to begin site mobilisation inside the approaching days for Accoya USA, LLC, the beforehand introduced three way partnership (JV) of Accsys and Eastman.
Strategic Benefits
The JV will assemble the plant with an preliminary capability of roughly 43,000 cubic metres per annum, strategically located at Eastman’s Kingsport, Tennessee site.
The Project will replicate existing Accoya technology at Accsys’ Arnhem manufacturing facility. North America represents a considerable market alternative for Accoya and a growth acceleration alternative for Accsys. Accsys has established strong foundations in North America with significant buyer demand for Accoya.
Accoya provide is currently constrained by manufacturing capability at its existing Arnhem plant and requires transatlantic transportation.
The strategic rationale for the Accoya USA JV and construction of the facility stays in line with that set out inside the Company’s announcement on 5 May 2021, and the goal monetary returns stay legitimate with an anticipated focused IRR of over 20%.
Engineering work has already commenced and orders for key lengthy lead-time equipment together with the Accoya acetylation reactors have been placed.
Groundworks to facilitate the beginning of construction are anticipated to commence shortly. The facility is anticipated to take as much as roughly two years to construct. Following construction, Accsys expects gross sales to ramp as much as full capability inside three years.
Project Funding
The total construction and start-up prices for the facility, together with for the preliminary two reactors, are anticipated to be roughly US$136 million. As beforehand announced, under the JV, Accsys holds a 60% curiosity and Eastman a 40% interest.
$66 million of the total project cost will be funded by fairness contributions from the JV parties. Accsys’ pro-rata share of US$39.6 million (€34.9 million) will be funded from Accsys’ existing money and debt facilities.
This includes funds raised by Accsys in May 2021 through a placing and open offer. US$5.6 million has already been contributed to date into the JV by Accsys, with US$3.8million by Eastman.
$70 million of the total project cost, will be funded through an eight-year time period mortgage to Accoya USA, LLC from First Horizon Bank (FHB) of Tennessee, USA.
FHB are additionally offering a additional US$10 million revolving line of credit score to be utilised to fund working capital.
The FHB time period mortgage is secured on the assets of the JV and can be supported by the JV’s shareholders, together with US$50 million through a restricted assure provided by every of the JV events on a pro-rata basis, with Accsys’ 60% share representing US$30 million. An attractive rate of curiosity has been secured which is below the Group’s common cost of debt and displays the Project’s strength and underlying credit score support.
Principal repayments commence one year following the completion and start-up of the facility, and are calculated on a ten-year amortisation period. The JV was suggested by Dresner Partners, a Chicago based, mid-market funding bank, in relation to the project debt financing.
Rob Harris, CEO of Accsys, commented: “We are delighted to maneuver ahead with the development phase of our North American three way partnership with Eastman. Our Accoya USA JV will allow Accsys to additional address the strong and rising demand inside the US market, which we believe is the largest addressable marketplace for Accoya.
We are excited to illustrate the ability to replicate our facilities from Arnhem, showing how Accsys’ manufacturing footprint can scale globally as we transfer towards our goal of accelerating manufacturing capability to 200,000m3 a year by 2025.”
Brad Lich, Eastman Executive Vice President and Chief Commercial Officer commented: “We’re happy to partner with Accsys and excited to obtain this very important milestone. Eastman is dedicated to becoming a number one sustainable supplies company, and Accoya’s worth proposition as a sustainable constructing supplies is compelling. The nice collaboration between our groups brings a wealth of complementary expertise and knowledge together, and positions Accoya USA, LLC thoroughly to profit from the synergy between our acetyls enterprise and the Accoya manufacturing process. We look ahead to progressing the Accoya USA story and delivering on the nice potential inside the North American market.”
www.accsysplc.com