Tasmanian timber company Gunns' proposed $2.3 billion Bell Bay...

Tasmanian timber company Gunns' proposed $2.3 billion Bell Bay Pulp Mill – still reeling from the withdrawal of a key financier – could be facing an uncertain future at the hands of throat-cutting global competitors.

As Gunns intensifies its ailing bid to raise $400 million in fresh equity, sessions of 7th China Pulp & Recycled Fiber Conference – held two weeks ago in Shanghai but not reported in the Australian media – detailed how massive new global pulp mill projects, including Eldorado and Suzano Maranhao in Brazil, Oji in China and Montes del Plata in Uruguay, would lead to a potential glut in the "bleached hardwood Kraft" pulp market by the end of next year.

Gunns has staked its future on landing a successful joint venture to bed down the 1.1 million tonne mill and move away from its woodchip arm that is struggling to compete with cheap Asian alternatives. But it is also looking to pay down $340 million in debt by next January and industry analysts to claim that a desire to dam torrents of red ink is the real rationale behind the latest capital raising.


Full article
http://www.businessspectator.com.au/bs.nsf/Article/Gunns-finance-Bell-Bay-Pulp-Mill-LEstrange-pd20120405-T37MR?OpenDocument&src=sph