Rayonier Advanced Materials (RYAM) Fireside Chat summary

Introduction and agenda

• The session featured Joshua Hicks, Senior Vice President of the High Purity Cellulose (HPC) business, discussing the transformation and strategy of the business unit.

Background and experience of the speaker

• Joshua Hicks joined the company 2.5 years ago, bringing extensive experience in specialty chemicals and ingredients.

• He was motivated by the opportunity to shift the company from a commodity pulp manufacturer to a specialty materials company and to drive shareholder value.

Current industry trends

• The HPC business is divided into cellulose specialties (CS), fluff, and non-fluff commodities, with CS being the market leader and generating healthy EBITDA margins in the mid-20s%.

• The fluff business targets high-value, growth areas like adult incontinence, aligning with demographic trends.

• The non-fluff commodities segment has negative EBITDA margins, prompting an indefinite suspension of the Temiscaming, Canada line to reduce exposure.

• By year-end, exposure to commodity segments is expected to be halved.

• The market is highly concentrated, with the top three CS producers holding 80% of the market.

• Recent capacity rationalizations, including the closure of the Georgia-Pacific Foley plant and the suspension of Temiscaming, are tightening supply-demand balance.