Nedlands-based wood pellet manufacturer Plantation Energy has deferred its initial public offering ahead of construction of its Albany wood pellet facility, opting instead to raise up to $24 million through private equity.
Nedlands-based wood pellet manufacturer Plantation Energy has deferred its initial public offering ahead of construction of its Albany wood pellet facility, opting instead to raise up to $24 million through private equity.
The company had hoped to list on the stock market by the end of the year, but decided to look to private equity in London first, deferring its IPO until next year.
Most of the funds will be used to develop the Albany facility, with a small portion being used to identify other locations for future wood pellet facilities around Australia.
Plantation Energy is currently focusing on locations near large plantations, including the green triangle region in Victoria, Tasmania, and to a lesser extent the Great Southern region of WA.
Managing director Gavin Harper said site works have already begun, with New Zealand company Brightwater Engineering contracted to construct the facility.
A project manager and full-time operations manager have also been appointed.
Construction is on track to commence production in April 2008, subject to approvals.
Once completed, the facility will be capable of producing 185,000 tonnes of wood pellets each year, using about 250,000t of the feedstock sourced from local blue gum harvest residues.
The company is reportedly close to finalising a supply contract for the feedstock.
Wood pellets are widely used throughout Europe as a zero-emissions alternative to traditional domestic heating.
The pellets also have industrial applications and are commonly supplied to coal-based power generators to co-fire with coal, reducing carbon emissions with little additional capital cost.
The largest market for wood pellets is Europe, with demand into the continent forecast to reach 60 million tonnes per year by 2015.
Mr Harper said the company has formed a joint venture with Rotterdam-based Green Fuels, called GF Plantation Energy, which would act as its marketing arm in Europe.
He estimates the European market will be equally divided into domestic and industrial customers, but the company will target the domestic first as the production will coincide with the European winter.
The company has also identified significant industrial opportunities in Japan, with a number of major utilities expressing interest in the pellets.
“We’ve just completed a study of the Japanese market, which has been very encouraging,” Mr Harper said.
In addition to developing wood pellet manufacturing facilities, Plantation Energy has the rights to import the first pellet stoves into Australia, which can be used as either central heating or living room systems.
The company is looking to target the colder southern areas of the Australia for wood pellet appliance sales.
