BY BILL PHILLIPS
An old acquaintance has become a new partner for Pacific Bioenergy.
Sumitomo Corporation of Japan recently acquired a 48 per cent stake in the local company, which the second-largest manufacturer of wood pellets in Canada.
“We see this Sumitomo investment as a vote of confidence in our vision to continue to build Pacific BioEnergy and the biomass energy sector in British Columbia,” said Don Steele, CEO of Pacific BioEnergy.
Sumitomo’s investment will help Pacific BioEnergy continue to grow while providing employment and economic development benefits in B.C.’s central and northern interior regions, he said.
Sumitomo Corporation owns several power-generation plants in Japan and the investment will help it secure a long-term supply of renewable fuel. The company is Japan’s No. 1 importer of wood pellets and has been importing B.C. wood pellets for power generation since 2008. With the meltdown of the Fukushima nuclear plant in Japan a few years ago, that country has increasingly looked at different way to power the nation, to the benefit of the pellet industry.
“Our company’s investment in Pacific BioEnergy is beneficial to our ability to provide a high-quality and consistent supply to the Japanese power-generating industry,” said Katsunori Takamitsu, Sumitomo’s general manager, Biomass Trading and Investment. “At the same time, Sumitomo’s investment in Pacific BioEnergy increases its capability to grow and expand its presence in the rapidly developing Japanese market.”
He added the company is proud to be involved in the environmentally-friendly business which helps decrease carbon dioxide emissions.
Pellets, which are produced from wood waste such as logging debris, bark, sawdust and wood shavings – materials that were formerly burned and released into the air shed – are used as a clean, renewable energy source with a growing global demand.
The company was officially welcomed by Forest Minister Doug Donaldson.
“The production of power out of residual fibre from sawmilling and timber harvesting is one example of the diverse ways B.C. jobs are being created from B.C.’s forests,” said Donaldson. “This investment strengthens B.C.’s relationship with Japan, leading to increased production and export of pellets to Japan and the rest of Asia through Sumitomo’s global network.”
With much of the Interior forest damaged by wildfires this summer, there will be plenty of fibre for companies like Pacific Bioenergy.
“This type of investment is exactly the type of investment our government looks forward to,” he said. “Residuals, that were otherwise burned into the forest, are now turned into a value-added product has all the components that are of great interest to us.”
He said increasing the use of fibre is a key component of his mandate as forest minister.
“Part of my job is to generate more jobs out of every cubic metre that is harvested,” Donaldson said. “When we just burn those cubic metres, it’s not generating job. I’m going to be looking at different ways of getting that fibre to companies like Pacific Bioenergy.”
That’s definitely good news for Steele who said there is a lot of potential for the pellet industry in B.C. using material that often goes up in smoke in slash piles.
“There’s a lot of a material that is not being used by the sawmilling industry and the pulp industry that can go into the bioenergy stream,” he said. “In fact, there are millions of tonnes of it. We call it secondary harvesting opportunity.”
He said Pacific Bioenergy, and others in the pellet industry, would like to access that fibre to grow their business.
“We have an incredible tree garden coming at us over the next 20, 30, 40, 50 years,” he said. “Right now we believe it’s time to replant the garden, clean up what we’ve got, and get at it.”
He called bioenergy a “third” industry that is complementary to the sawmill and pulp industries.
Mayor Lyn Hall said the partnership is also good news for the city.
“(Pacific Bioenergy) is really an organization that we are very proud of, and very proud to have in the City of Prince George,” he said. “(The partnership) is indicative of what we’re trying to do here from an economic development perspective.”
Pacific BioEnergy, which employs 55 people at its facility in Prince George and generates another 50 indirect jobs, produces about 550,000 tonnes of industrial wood pellets annually.
Pacific BioEnergy was founded in 1994, expanded its Prince George plant in 2008 and has exported about 3.5 million tonnes of wood pellets to Europe and Asia. The company also partners with the Nazko First Nation in Quesnel to operate a biomass pre-processing facility that converts low-grade timber into products including sellable saw logs and high-quality pulp chips. The company also has a First Nations partnership in the Kispiox and Kitwanga region west of Prince George, to supply beetle-kill timber for pellet production.
The provincial government has a B.C. Trade and Investment office in Tokyo that plays a key role in facilitating partnerships between companies in B.C. and Japan.