Buckeye Technologies has announced that it has approved funding to increase high-end specialty wood pulp capacity by 42,000 tons at its Buckeye Florida Foley operation.

The cost of the project is expected to be approximately $79 million with an anticipated rate of return of 15% to 20%. Engineering and design work is nearing completion, and construction is expected to begin in January 2012 with project start-up planned for December 2012.

This investment will be funded by cash flow from operations. Buckeye's Chairman and Chief Executive Officer John Crowe said: "This specialty expansion project will provide much needed high-purity specialty volume for strategic customers in all of our high-end markets including casings, tire cord, ethers, filtration, micro-crystalline cellulose, and acetate."

"Additionally, this will improve our overall plant product mix from 42% specialty wood pulp to just over 50% specialty wood pulp while maintaining the Foley plant's existing total capacity at 465,000 tons per year." "This is the type of high-return organic growth opportunity that we will continue to target as we allocate our free cash flow to its highest and best use. We believe this project will provide excellent value to our customers and our shareholders."