[O/T PCL]—The wood pellets shipped to biomass utilities come from tree tops and small twigs that are useless for lumber and uneconomic for pulpwood used in the manufacture of paper and fiberboard. This pellet product, although small in economic terms, really is new upside for PCL.
[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.
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