Resolute Forest Forms Biomaterial JV with Mercer International - Analyst Blog

Forest products manufacturer Resolute Forest Products Inc. RFP collaborated with Mercer International Inc. MERC to launch a joint venture company – Performance BioFilaments Inc. –  to develop and commercialize an innovative biomaterial known as cellulose filaments. The alliance involves equal stake of the world's two foremost forest products companies in Performance BioFilaments.

The sustainable biomaterial, derived from wood fiber, has the potential to significantly enhance the resilience and strength of numerous commercial and consumer products presently available in the market.

Performance BioFilaments

Performance BioFilaments is set to exploit the compelling business prospects of cellulose filaments, through exploration and development of its end-uses, by leveraging the technical know-how and resources of both the companies.

The company will also have access to a proprietary technology for processing cellulose filaments, owned by FPInnovations Inc., a leading forest products research organization. The license will allow the company to build upon FPInnovations' cellulose filament research and capitalize on its work on the process technology and production quantities of the product.

The venture is looking for joint development partners from a range of industries in order to create innovative applications for their products. It intends to integrate FPInnovations' foundational research and its own proprietary work to create new products based on cellulose filaments technology.

Potential Applications

Cellulose filaments have distinctive performance-enhancing properties with considerable potential to improve a broad range of consumer and industrial products. From lighter, more fuel-efficient vehicles to more durable coatings and advanced filtration systems, cellulose filaments enhance material performance, while offering significant cost advantages.

While cellulose filaments have strength comparable to that of synthetic reinforcement fibers made from non-renewable petroleum inputs, the former is completely renewable, with a very low carbon footprint.

Cellulose filaments have potential applications in the aviation, marine, aerospace, electronics, manufacturing and construction sectors, as well as in paint and consumer products.

Moving Ahead

Continuing its efforts to promote environment preservation and drive innovation in the forest products industry, Resolute Forest will offer financial support and rich expertise to Performance BioFilaments, sustaining the research and development capabilities of the venture.

Resolute Forest currently has a Zacks Rank #3 (Hold), while Mercer sports a Zacks Rank #1 (Strong Buy). Other notable stocks in the basic materials sector that are worth considering include Agnico Eagle Mines Limited AEM and Compass Minerals International Inc. CMP, each sporting a Zacks Rank #1.

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