canadian wood pellet opportunities · ¡canadian wood pellet industry ... this will enable capital...
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GordonMurray,ExecutiveDirector
CanadianWoodPelletOpportunities
¡ Canadianwoodpelletindustry¡ Canadianforests¡ Fibressupplyforpellets¡ FactorsaffectingthecostofCanadianwoodpellets¡ Canadianexportdestinations¡ CanadianinterestindoingbusinessinJapanandSouthKorea
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• 44woodpelletplants• 4,000,000tonnes annualcapacity• 1,000,000tonnes newcapacity,last18months• 400,000tonnes underconstruction• Twowestcoastexportterminals
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1. Canfor/PacificBio– FortStJohn2. Canfor/PacificBio– Chetwynd3. Pinnacle/Canfor– Houston4. Pinnacle– BurnsLake5. PremiumPellet– Vanderhoof6. PacificBioEnergy – PrinceGeorge7. Pinnacle– Meadowbank8. Pinnacle– Quesnel9. Pinnacle– WilliamsLake10. Pinnacle– Armstrong11. PrincetonPellet- Princeton12. Pinnacle/Tolko– Lavington13. Diacarbon – Merritt14. LaCreteSawmills– LaCrete15. Pinnacle– Entwistle16. FoothillsFP– GrandeCache
=3milliontonnes annualcapacity
5
347 MHectaresof
forest
9%oftheworld’sforestcover
1011171822222528
91208
310347
494815
0 200 400 600 800 1000
New ZealandGermany
FranceChile
MalaysiaFinland
JapanSweden
IndonesiaChina
United StatesCanada
BrazilRussian…
Data source: FAO, Global Forest Resources Assessment 2015.
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LoggingresiduesSawmillresidues- sawdustandshavings- Typicallynotwoodchips
Fibresupplyisusuallyobtainedfromsawmillcompanies
¡ Securerawmaterialsupply– typicallythroughagreementswithsawmillcompanies
¡ Proventechnology– plantdesignandequipment
¡ Managementteam¡ Securemulti-yearofftakeagreement(incompatiblewithtendering)
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¡ Sustainability¡ Environmentalregulations¡ Ruleoflawandfairtreatmentofworkers¡ Healthandsafety¡ Qualitycontrol
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Vietnamese Production Plant
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Threat and Opportunity
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2016exports: 2.4milliontonnes2015exports: 1.6milliontonnes
983
107 62
218 205 150
1,206
228
80205
86 49
1,664
144272
17073 49
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
UK Belgium Japan US Italy SKorea
2014 2015 2016
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¡ Tendering&short-termcontractsarechaotic,destructivetosuppliers,anddonotsupportdevelopmentofareliablesupplychain.
¡ Canadianproducersareseekinglongtermcontractswithreliablecustomerstobuilddurablerelationships.Thiswillenablecapitalinvestment,risksharing,andtheestablishmentofsustainablesupplychains.
¡ Japanesecustomershavevaluedhighquality,reliable,sustainablesupply– longtermcontracts.
¡ SouthKoreacustomershaveusedshorttermtenders.Lowcostishighestpriority.Quality,sustainability,andsupplierrelationshipshavebeensecondary.
¡ SouthKoreancustomersnowstartingtoshowinterestinlongtermsupply.
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¡ StrongdesiretocontinuetogrowwoodpellettradewithJapan.
¡ UncertaintyaboutSouthKorea.Canadianproducersarebeingcautious.
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¡ Canadahasavastforestresource¡ Canadaisaleadingexporterofhighquality,sustainablewoodpellets
¡ Weareinterestedinlongtermsustainablebusinessrelationships
¡ Asiaishighlyattractive,especiallyJapan
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