Biotech Values

[DewDiligence]

[O/T PCL]—According to today’s CC, the biomass product that PCL ships to pelletizing plants for use as fuel, pursuant to the deal inked last week (#msg-83699603), consists of 80% pulpwood and 20% junk wood (tops and limbs that would otherwise be left in the forest). So you were partially right in #msg-83699851 when you implied that this product was not entirely new revenue for PCL. However, PCL stated today that, under an exclusive supply arrangement, they get a price premium for the biomass product over and above what is ordinarily paid for pulpwood, and the 20% junk-wood portion is indeed pure upside.

All told, this is a great business for PCL to be in since European utilities who want to be more “green” have few places to turn to.

p.s. PCL forecasts a strong 2013 (#msg-83908563).