Great Southern Plantations Ltd will supply up to 200,000 tonnes of eucalypt logs per year to unlisted Perth company Lignor Ltd's engineered strand lumber plant, starting in 2009.
Great Southern Plantations Ltd will supply up to 200,000 tonnes of eucalypt logs per year to unlisted Perth company Lignor Ltd's engineered strand lumber plant, starting in 2009.
This follows the state government's decision earlier this month to establish infrastructure at the Mirambeena industrial estate north of Albany, where Lignor is planning to build its plant.
It has also appointed corporate advisers to work on the crucial fund raising for the project, and has engaged engineering firms WorleyParsons and CPM of Canada to work on the design of the plant.
The federal government has provided $2.15 million in seed funding to supplement the funds invested by Lignor shareholders.
The full announcement is pasted below
Lignor Ltd, the company developing the Engineered Strand Lumber Plant in Albany Western Australia, and Great Southern Plantations Limited today announced the signing of an Agreement for the supply of up to 200,000 tonnes per year of blue gum logs to Lignor starting in 2009.
This is the first major contract for the supply of logs signed by Lignor for the ESL plant and will be complemented by further contracts with log suppliers in the near future to provide the plant's total requirements.
Lignor is developing the world's first timber stranding plant utilising eucalypt trees for the production of a variety of timber products. Patents covering the use of plantation blue gum and karri/jarrah forest residues have now been lodged around the world for Lignor's process. Stranding involves the shredding of logs into thin strands measuring some 180 mm in length, 25 mm width and 1.5mm thick. These are then aligned and with the addition of suitable resins, are compressed into a large timber billet that is then cut into final sections. The process has been in use in the U.S. and in Europe for many years using primarily softwood species. Importantly, some 75% of the log is used in the final product, over twice the recovery normally found in the timber industry.
The eucalypt hardwood products from the Albany plant will be up to 40% stronger than alternative timber, do not readily absorb moisture so are ideal for external applications and have vastly superior properties that provide significant benefits to the construction industry. A benign termite treatment is also used in the preparation of the PMDI resin used in the manufacturing process.
The plant will be constructed at Mirambeena, some 14 km North of Albany. Lignor has already acquired 30ha of land to develop the project. Logs will be trucked into Mirambeena from the many local blue gum plantations and from Manjimup/Pemberton from forest residues. The final manufactured products will be prepared at the plant and railed to Perth for dispatch to Eastern States markets and exported from Fremantle. Some 30 containers per day will be sent from the plant.
The plant produces no material emissions. Waste is used in the boilers that generate heat for the drying operation.
The company was successful in recently achieving $2.15m as seed funding from the Forest Industries Structural Adjustment Package, assisting the company to realise its early potential. Lignor has also engaged the services of WorleyParsons to undertake the site planning and CPM, a Canadian Company that is a world expert in the design of stranded lumber plants to provide the necessary design and support for the plant specification and construction.
Lignor recently appointed corporate advisors to secure funding for the plant construction and it is expected that the plant will be commissioned during the final quarter of 2008.
When in full production, the plant will operate on three shifts over a seven day period and will employ directly 145 people. The plant will generate many millions of dollars of revenue to the State and exports over its extended life and provides a high value added function from log residue waste and blue gum trees that would otherwise be chipped.
Said Mr. Glyn Denison, Managing Director of Lignor Ltd: "We are very pleased to start the formal process of securing the log resource and we see this Agreement with Great Southern Plantations being a cornerstone commitment and milestone for the business of Lignor. We are looking forward to working with GSP as we ramp up the project over the next six months. After six years of project development and many millions of dollars in testing the eucalypt species, we are now moving into the capital raising phase and we are particularly pleased that we are able to have Great Southern Plantations as one of our key partners in the project."
Mr. Cameron Rhodes, Director of Great Southern Plantations said: "Great Southern Plantations is delighted to enter into this arrangement with Lignor. Our objective is to deliver the best possible returns to our investors who own the trees in our plantations, and we are therefore very pleased to see the development of the ESL plant in Albany as this is creating additional demand for the timber. The critical factor in getting downstream processing such as this plant off the ground is the establishment of the resource, namely the trees, and with Great Southern recently planting the company's 100 millionth tree we are now well advanced in achieving this objective."
