PLANTATION Energy Australia has signed its second major multi-million dollar supply agreement with a European energy company this month.
The Albany-based renewable-energy manufacturer is developing its business while huge question marks remain over the immediate future of the plantation timber industry.
The fallout from the financial collapse of Timbercorp and Great Southern Plantations continues to reverberate throughout the region.
Trucking companies have become the latest victims, laying off drivers after a reduction in harvesting throughout the region.
Great Southern receivers McGrathNicol have assumed control of the day-to-day operations of the company, taking possession of its assets for assessment to determine the best course of action to preserve their value.
The first meeting of creditors was held yesterday in Melbourne.
Timbercorp administrators Korda Mentha this week warned investors in the company’s agribusiness schemes that the outlook was bleak for many projects.
Korda Mentha is expected to clarify the position of many of the projects in the next few weeks with its investors/growers.
Harvesting of Timbercorp’s Great Southern plantations resumed two weeks ago.
Preliminary assessments indicate the Timbercorp group of companies has liabilities of $661million to secured lenders, $250million in other loans and debts, $14million to unsecured creditors and $5million in employee entitlements.
There is no current estimate for claims which may be made by investor growers or lessors.
Plantation Energy’s signing of a three-year $60 million supply agreement with the second European energy company last week comes just before its Albany plant at the Mirambeena Timber Precinct on Down Road is officially opened.
The factory, the first of several planned pellet manufacturing facilities in Australia, is already in operation.
“It is very timely as the commissioning stage of the Albany plant is now complete,” said Plantation Energy business development manager Jarrod Waring.
“We are delighted in reaching such an agreement with Essent Trading as it underpins the future development of the plant and allows Plantation Energy to move forward with great confidence.”
Essent Trading is an international asset-backed merchant energy trading company based in Switzerland.
Plantation Energy’s supply agreement with Essent comes soon after it announced its first export deal, with Electrabel NV, a subsidiary of GdF-Suez, Europe’s largest power company.
Plantation Energy manufactures clean renewable energy in the form of wood pellets made from non-commercial plantation forest residues.
It is backed by leading US-based global private equity firm Denham Capital, which in October 2008 announced an equity investment of up to US$80 million in the company.
“Essent Trading is delighted with the import of Australian wood pellets to Europe, which is giving us geographical diversification in our current bio fuel portfolio,” said Martin de Wolff of Essent Trading.
“The wood pellets from Australia are from sustainable resources and are going to be used in our power plants for the production of ‘green electricity’, thus reducing carbon emissions.”
Wood pellets are used extensively in Europe, where they are burned with coal in coal-fired power stations.
Demand for pellets exceeded eight million tonnes in 2008 and is expected to top 16 million tonnes by 2014.
Plantation Energy plans more capacity from pellet plants in the “Green Triangle” of Victoria and South Australia.