Rayonier Advanced Materials Sets 18% Cellulose Price Hikes, Targets Positive Cash Flow
Rayonier Advanced Materials reported a negative $88 million free cash flow in 2025 and plans to deliver positive free cash flow in 2026 while addressing high-cost debt. The company secured price increases averaging 18% on 85% of its Cellulose Specialties volume, accepting a 20% sales reduction.
1. Negative Free Cash Flow and Debt Pressure
Rayonier Advanced Materials closed 2025 with a negative $88 million free cash flow position and carries significant high-cost debt. New CEO Scott Sutton described restoring positive cash flow in 2026 as mission-critical to stabilise the balance sheet.
2. 18% Price Increases on Cellulose Specialties
Management has locked in average price increases of 18% on 85% of its Cellulose Specialties volume, trading off roughly 20% of sales volumes. The remaining 15% of the business is under negotiation, with expected pricing above the current 18% average.
3. Refinancing Plans to Lower Interest Costs
CFO Marcus Moeltner outlined a refinancing strategy to address the leveraged capital structure, aiming to reduce interest expenses and fixed charges. The outcome is intended to complement operational improvements and improve cash generation.
4. NASCAR Strategy and Market Challenges
The company will deploy a “NASCAR leaderboard” framework to shift production dynamically across market segments and optimise contribution. Sutton noted domestic operations face pressure from subsidised imports after specialty site closures in Washington, Tennessee and Florida.