Bay of Plenty forestry tech company Foresta has secured a 150,000 tonnes a year contract with forestry company PF Olsen to cut stumps, logs and slash for the production of resin chemicals and wood fuel pellets.
The agreement comes only a week after Australian-listed Foresta announced its plans to build a forest chemical and wood pelletising plant on iwi land at Kawerau, with full production due to commence in two years.
The 10-year supply agreement with PF Olsen has Foresta overseeing the entire forest felling process amounting to about 300 hectares a year of pine forest, largely in the vicinity of its Kawerau plant.
Foresta managing director Ray Mountfort said the chemical extraction process Foresta will use generates greater value from higher resin components of the trees harvested, particularly the stumps.
He emphasised the company is not seeking to be a “clean-up” operation, picking up residual slash and waste from other companies’ harvesting sites.
“Our aim is to add value through the entire harvest chain.”
He is awaiting the arrival of a wood pelletising plant from Europe this spring, while the chemical extraction plant will take over a year to construct once resource consent has been approved.
The higher value of the extracted chemicals, which can be replacements for conventional hydrocarbon sourced chemicals across a range of industrial uses, means Foresta has some flexibility about distance to the processing plant, he said.
For that reason, the company is also keen to talk to more farmers who may have smaller wood lots with older pine trees within them.
“Those old man pine trees you get on farms tend to have a higher resin content within them, making them more valuable to us.”
The torrefied black wood pellets represent a “drop in” fuel that can be a straight swap for coal in industrial boilers, reducing emissions by 90%.
Foresta has also secured an off-take agreement with South Island based energy supplier Tailored Energy and Resources, to supply 65,000 tonnes of pellets annually to industrial customers.
“We’re excited to be partnering with such a respected and significant player in the New Zealand forestry industry.
“The supply agreement represents another piece in the jigsaw which means, pending funding, we can proceed with confidence with our plans to develop our manufacturing plant and begin construction later this year.”
