Viridis secures additional pellet supply
By Canadian Biomass
October 1, 2014, Vancouver, B.C. - Viridis Energy Inc. announced that Viridis Merchants Canada Ltd. has secured an additional 45,000 tonnes of wood pellets per year over the next two years from a western Canadian manufacturer to augment the Company's current production capacity.
By Canadian Biomass
October 1, 2014, Vancouver, B.C. – Viridis Energy Inc. announced
that Viridis Merchants Canada Ltd. has secured an additional 45,000 tonnes of
wood pellets per year over the next two years from a western Canadian
manufacturer to augment the Company's current production capacity.
The additional wood pellets are expected to be available in
October 2014 and will be sold to Viridis' existing customers in the U.S. and
South Korea, which will support a greater expansion into Southeast Asia.
Viridis projects the added supply will generate a minimum of $21 million over
the initial two-year term of the agreement, depending on the producer's
The initial term of the supply agreement runs from September
2014 to December 2016, with an automatic renewal for an additional 12-month
period. The agreement also provides for an additional 15,000 tonnes of EN Plus
A1 quality wood pellets per year. The agreement extension plus the potential
additional 15,000 tonnes of pellet supply could increase the potential revenue
over the full term of the agreement to a total of $40 million.
Commenting on the Viridis Merchants transaction, Christopher
Robertson, Viridis' CEO said, "As we continue to increase our organic
production capacity, Viridis Merchants' transactions has supplemented this
growth, creating an overall total wood pellet manufactured and aggregated
capacity of over 300,000 tonnes annually. Viridis is well on its way to
reaching its goal of one million tonnes over the next couple of years."
In addition, Viridis announced that its Scotia Atlantic
facility has received an order from a large European utility company for 50,000
tonnes of wood pellets to be shipped by March 31, 2015. The order, facilitated
by Ekman, the Company's distributor, calls for a higher quality industrial
pellet than previously shipped by Viridis. Mr. Robertson added, "As wood
pellet demand continues to increase, we are visibly noticing that pricing for
pellets is strengthening in Europe."