Fortress Paper Ltd entered into agreements to supply dissolving pulp to two producers of rayon products in China, as the Canadian company looks to hedge against a volatile pricing environment.

The Vancouver, British Columbia-based maker of specialty paper will deliver a total of 84,000 air dried metric tons (ADMT) of dissolving pulp annually for five years.

The selling price will be based on the prevailing market prices in China and in the range of $1,200-$1,600 per ADMT, Fortress said.

Fortress will begin supplying dissolving pulp from its specialty cellulose mill in the third quarter of 2011, the company said.

The mill is expected to have a production capacity of more than 200,000 ADMT per year upon its completion in mid-2011. (Reuters)