BIoMASS update Rentech acquiRes new england wood Pellet Rentech, Inc. announced that it has acquired New England Wood Pellet (NEWP), the largest producer of wood pellets for the U.S. heating market. NEWP, established in 1992, operates three wood pellet facilities with a combined annual production capacity of 240,000 tons. The facilities are strategically located in the U.S. Northeast, which is the largest domestic market for consumption of wood pellets for heating. NEWP generated EBITDA of approximately $7.4 million in 2013. Rentech owns two pellet plants currently under construction in northern Ontario: the Atikokan plant, with an expected capacity of 125,000 tons, and the Wawa plant, with an expected capacity of over 400,000 tons. noRth ameRican Pellet exPoRt gRowth continues With no slowdown in sight, North American wood pellet exporting companies keep building new facilities to manufacture pellets for the European market, according to the latest market update from Wood Resources International. Export volumes hit a new record high in the 4Q/13, and the total shipments for 2013 were up almost 50% from the previous year – more than double that in 2011. The total value of wood pellet exports reached over 650 million dollars last year. The expansion in Canadian pellet export has been less dramatic than that of the U.S., but 2013 volumes were still over 50% higher than in 2011, with British Columbia shipping a majority of the volume. In Canada, there have been two recent developments of interest: 1) the first regular shipments of pellets to South Korea started in the second half of 2013; and, 2) exports from Eastern Canada from Quebec, Nova Scotia and New Brunswick increased during this same time period. Eastern Canada will see additional pellet export volumes later in 2014 when Rentech begins operation at its two pellet facilities now underway in Ontario. As reported in the NAWFR (www.woodprices.com), a Quebec pellet export facility under construction at the Port of Quebec is the first dedicated infrastructure for pellet exports along the St. Lawrence Seaway. Its presence, when completed, reduces the heretofore substantial entry barrier for a number of smaller pellet companies which are interested in the international market. In the 4Q/13, export volumes from the Eastern provinces accounted for 25 per cent of Canada’s total pellet exports, a share that is likely to increase in 2014 and 2015. FoRtRess PaPeR incReases PoweR suPPly to hydRo quebec Fortress Paper Ltd. announced that the Fortress Specialty Cellulose mill located in Thurso, Quebec, has successfully been awarded by Hydro Quebec a power supply agreement for an additional 5.2 megawatts of power to be produced at its cogeneration facility. Once finalized, the amount of green power supplied by the FSC Mill’s cogeneration facility to Hydro Quebec will increase from the current amount of 18.8 megawatts of power to 24 megawatts of power. This increase will result in significant incremental revenue, which will translate into an anticipated overall cost savings at the FSC Mill of approximately $2.7 million annually with an opportunity for further optimization. The FSC Mill is expected to begin delivering the additional power in April 2015, at the latest, with a provision to start delivering power as early as the fourth quarter of 2014. W2 Energy, Inc. has begun production at its biofuel plant in Cambridge, Ont. The company has tested various small batches of fuel and now is confident the plant is running well and will pro-duce ASTM specification fuel on a consistent basis. The company will begin production on a batch basis, and using cash flow from sales they will ramp production up while remaining cash flow positive. Once it reaches a consistent production rate the company will apply for credit lines that will allow it to move to full production W2 Energy begins biofuel production and beyond. Mr. Michael McLaren, CEO, states, “We are very excited now to be finally here and in the biofuel business. Our current plan is to ramp up production with our system to its maximum of 7,500 litres of waste vegetable oil per day. Once we hit those targets we will expand the plant to double that capacity to 15,000 litres per day.” Now that W2 Energy has begun production, the company plans to apply for the government biofuel production subsidy. FoR moRe news and RegulaR uPdates, go to www.canadianbiomassmagazine.ca. 8 Canadian BIOMASS
Canadian Biomass May June 2014: Page 8
