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MARKET WATCH

Forestry Related Industry News - October 2014

Posted by LeAndra Spicer on October 3, 2014
 

Timber Sales

Timber Investment Management Organization Resource Management Service (RMS) will buy approximately 56,000 acres of the Hofmann Forest owned by North Carolina State University (NC State). RMS executive vice president Ed Sweeten told the News & Observer that the Alabama-based group manages approximately 2.6 million acres of timber in the Southeast (230,000 acres in North Carolina).

The initial terms of the sale, to a family-run, multi-state agriculture business based in Illinois drew the ire of opponents who claim the University disregarded the value the forest provided to research and the environment. The original buyer will purchase the remaining 23,000 acres.

NC State has agreed to a reduced sale, cutting approximately $19 million from the $150 million price. The deal is expected to close by November 17.

Atlanta-based Timbervest has acquired over 30,000 across the South and Northeast in recent weeks. The firm’s southern acquisitions include approximately 2,550 acres of pine plantations in Effingham, Georgia; 9,400 acres of mixed hardwoods and loblolly pine plantations in northwest Tennessee;  6,700-acres of mature timber and young plantations near Jasper, Alabama; and 14,000 acres of pine plantations in Azalea, Virginia. Timbervest has also purchased 1,270 acres of mixed hardwood timberland in east central Vermont. No price was reported.

In the Pacific Northwest, JWTR, LLC has sold approximately 600,000 acres of South Central Oregon timberland to Green Diamond Resource Company. The acquisition brings the number of acres Green Diamond Resource Company owns and manages across California, Oregon, and Washington to more than 1.3 million. Like the Timbervest acquisitions, the company did not announce the deal’s price tag.

Paper

Verso Paper will close its Bucksport, Maine paper mill by the end of the year. A press release announcing the closure cited a lack of profits as the reason behind the decision to close. Rising fiber and energy costs along with a decline in white paper demand have hurt the paper industry in the Northeast. The Bucksport mill temporarily shut down earlier this year in part due to exorbitant natural gas prices.

Lumber

Production at Klausner Lumber One in Suwannee County, Florida will commence in 4Q2014, according to statements from Klausner Trading USA president Thomas Mende to the Suwannee Democrat. Klausner Lumber One is one of three sawmills Klausner has planned for the US South. The other two mills are planned for Rowesville in Orangeburg County, South Carolina and Enfield in Halifax County, North Carolina.

Gilman Building Products has opened a new plant - Gilman Specialty Products - in the southeastern Georgia town of Blackshear. The fingerjoint mill uses wood manufacturing waste, saw dust, and immature Southern yellow pine trees and residues. The company operates six yellow pine sawmills in addition to the new mill.

Quebec-based Maibec Inc. announced plans to purchase the Fraser Timber lumber mill in Masardis, Maine. The mill has a capacity in excess of 100 million board feet. The transaction should be completed by the end of the year.

Lastly, Canfor intends to purchase Southern Lumber Company for $48.7 million. The acquisition of the company’s operating assets includes a Hermanville, Mississippi sawmill with a capacity of 90 million board feet. Southern Lumber Company’s website states they also maintain log yards in Crosby, Mississippi and Clinton, Louisiana. The sale is expected to close at the end of the first quarter of 2015.

Pellets

Canfor is also busy with energy, announcing plans to partner with Pacific Bioenergy Corporation to build and operate pellet plants at its Chetwynd and Fort St. John sawmill sites.  In a company press release, Canfor Corporation President and CEO Don Kayne said the new plants would “enhance our utilization of sawmill residuals and contribute to our Company’s overall sustainable value proposition.” Planned to begin production during the third and fourth quarters of 2015, the two pellet plants will have a combined annual production capacity of 175,000 tonnes. Sale of the wood pellets is tied to a long-term agreement with a power utility.

Enviva continues its expansion with the announcement of plans to build two new wood pellet plants in North Carolina’s Richmond and Sampson counties. The new projects make up a $214.2 million investment and join three other Enviva facilities in North Carolina. The company currently operates pellet plants in Northampton and Hertford counties and is constructing a wood pellet export facility at the Port of Wilmington.

Enviva also has operations in Amory and Wiggins, Mississippi and Southampton County, Virginia. Its five operational plants have a combined annual production capacity of just over 1.5 million metric tons.

Fuels

After beginning commercial-scale production of cellulosic ethanol from a feedstock mix that includes wood biomass, INEOS Bio’s Vero Beach, Florida plant has failed to achieve full fuel production capacity. Biofuels Digest reported the facility remains operational, but the bio-organisms’ sensitivity to high levels of hydrogen cyanide (HCN) in the syngas during the fermentation process had impeded production.

A scrubber to remove the HCN from the syngas and three new towers are planned to fix the problem. The state of Florida has issued an “intent to Issue Air Permit” notice and a draft final air permit, but construction depends on the State issuing the amended air permit. INEOS management has reportedly indicated the scrubber will be operational by October, and the plant will resume normal operations by year end.

Red Rock Biofuels, an IR1 Group subsidiary, was awarded a contract under the Defense Production Act (DPA) to commission a biofuels plant capable of producing drop-in fuels for military and other commercial use. One of three firms to receive the award, Red Rock is the only one that will use wood biomass feedstock. Planned for Lakeview, Oregon, the biorefinery would reportedly require 170,000 tons of forest biomass to produce 401,500 gallons of fuel annually.

Topics: forest industry news

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