Business
2016 Supply Contracts & New Production Facility
2016 Supply Contracts & New Production Facility.
About this update from Active Energy Group Plc
[{"type":"text","content":"\n \nRNS Number : 1323M Active Energy Group PLC 18 January 2016 \n\n18 January 2016\nActive Energy Group Plc\n(\"Active Energy Group\" or the \"Group\" or the \"Company\" or \"AEG\")\nAEG WoodFibre 2016 Supply Contracts\nand New Softwood Production Facility Update\nActive Energy Group Plc (AIM: AEG.L), the London Stock Exchange AIM-quoted international supplier of timberland management and development services, industrial wood fibre, and Biomass coal replacement fuels, is pleased to announce that its AEG WoodFibre division has secured two significant new supply contracts for 2016, and that it is investing in a new softwood production line to augment its recently-upgraded hardwood processing facilities.\nNew Hardwood and Softwood Wood Fibre Supply Contracts:\nUnder the two 2016 supply contracts, signed on 15 January 2016 with Yildiz Entegre, the leading MDF manufacturer in Turkey, AEG WoodFibre has agreed to deliver up to 300,000 metric tonnes of its proven hardwood wood fibre product, as well as up to another 200,000 metric tonnes of its new softwood wood fibre offering. These significant contracts are expected to generate revenues of over US$50 million in FY 2016.\nAdditional off-take supply negotiations with other Turkish MDF manufacturers are ongoing, and the Group expects to announce further contract wins over the coming months. \nNew Softwood Wood Fibre Production Line:\nMDF, the material of choice for carpentry, cabinet-making and other joinery applications, is produced from a combination of hardwood and softwood wood fibre. To date, AEG WoodFibre has only provided the hardwood raw material required by its customers. \nFollowing the difficult mid-year trading, which impacted on its overall 2015 performance and delayed the planned investment in new facilities, AEG WoodFibre has now returned to profitable operations and recorded an excellent performance in Q4:2015, for the first time delivering three bulk cargo loads in a single month at good margins. \nIn light of this, the Board has approved an investment of US$0.75 million to purchase the equipment to manufacture softwood wood fibre from Pine logs. The new softwood production line, which is planned to be operational by Q2:2016, will substantially increase AEG WoodFibre's manufacturing capacity and broaden its market offering, making it the only sup...