New woodchip player Southern Pacific Fibre has struck a marketing and sales deal with Australia’s largest producer and exporter of high quality hardwood chips, Australian Bluegum Plantations, despite a weak woodchip market.
The agreement will mean ABP manages marketing and sales of the entire harvest from SPF’s emerging Esperance Woodchip Project, giving SPF access to key customers in Asia.
Field chipping contractors LV Dohnt have been secured to undertake harvesting and haulage, in addition to existing operations in Albany and Portland.
LV Dohnt will be responsible for investment in in-field chipping machinery and delivery to a large scale stockpile site, from which woodchips will be moved to port during ship loading.
SPF is also in discussions with CBH Group to lease a storage site at Shark Lake, 15 kilometres from the Esperance Port, and the company said it aimed to export 1 million tonnes of wood biomass and forest products annually from across Australia.
The company said about 3mt would be shipped in the lifetime of the Esperance project.
The highly concentrated wood chipping industry has been dealing with reduced demand since the GFC and Japanese tsunami, with Japanese paper manufacturers a major share of demand for Australian woodchips.
SPF chief executive John Ipsen, who previously was part of the executive team at the Albany Woodchip Terminal, said the ABP deal was a vote of confidence in the project’s viability.
“We are advanced in undertaking detailed engineering design and costing as part of our approvals process with the Port of Esperance,” Mr Ipsen said.
“SPF and the Esperance Ports are progressing negotiations towards agreeing to the terms of a long-term port access agreement, and are working together to secure the relevant environmental approvals.”
He said the approvals and access agreement would finalise the pathway to market.
The company has also secured marketing arrangements with a number of local growers through Complete Plantation Services WA.
