Mercer International Inc. · NASDAQ:MERC
Mercer International — IEA Bioenergy Conference - Vancouver August 2009
21 slides from Mercer International's conference presentation, Aug 21, 2009
Slide 1: Bioenergy from the Perspective of a Forest Industry Company
Bioenergy from the Perspective of a Forest Industry Company IEA Bioenergy Conference - Vancouver August 2009
Slide 2: Forward Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this presentation contains statements that are forward-looking, such as statements relating to results of operations and financial conditions and business dev
Slide 3: Company Overview
Company Overview Mercer is the largest publicly traded NBSK(1) market pulp producer in the world Operates three pulp mills with 1.46 million ADMT(2) of capacity _________ (1) NBSK = northern bleached softwood kraft (2) ADMT = air dried metric tonnes (3) Stendal is a 74.9% owned facility Rosenthal (G
Slide 4: Our Strategy & Purpose
Focus on NBSK market pulp Premium grade kraft pulp that generally obtains the highest price Operate modern, world-class NBSK pulp production facilities Target profitability in all market conditions Limit ongoing capital requirements Our Strategy & Purpose Improve efficiency and reduce production cos
Slide 5: World Class Assets
World Class Assets Mercer versus other top 20 NBSK producers as of Q4 2007 (includes integrated capacity) Large, modern facilities - low capital requirements, high runability State-of-the-art environmental compliance Energy - net producers Note: Bubble sizes represent market and integrated pulp prod
Slide 6: Mercer Green Electricity Profile
Mercer has installed Bio-Electricity generation capacity at all three mills 102 MW in Stendal, 57 MW in Rosenthal and 52 MW in Celgar (to be expanded to 100 MW in 2010) More than 95% of our energy production is generated from biofuels, all derived from the wood that is processed to produce pulp (mos
Slide 7: Mercer Export of Electricity
Mercer Export of Electricity 1.30 million tonnes Pulp Production 1.43 million tonnes Pulp Production 1.40 million tonnes Pulp Production 2008 2007 2006 With Celgar Green Energy Project Bioenergy revenues Grew from 21 Million EUR in 2006 to 31 Million EUR in 2008 - an increase of 48% Pulp revenues gr
Slide 8: Mercer Carbon Flow
Mercer Carbon Flow Kraft pulp mills have the ability to extract the highest value from a wood resource, producing pulp and generating high quality green energy The raw material Mercer processes each year contains approximately 1.6 million tonnes of Carbon This Carbon is either stored in the pulp pro
Slide 9: Selected Pulp Mill Biorefinery Opportunities
Biomass Residues Gasification Hydrolysis Syngas Fermentation Biofuels Biofuels, Bio-based chemicals Pulpwood & Sawmill Chips Fermentation Biofuels, Bio-based chemicals Lime Kiln Fuel Traditional Pulp Making Process Pulp Sales Selected Pulp Mill Biorefinery Opportunities
Slide 10: We Can Be Leaders in a Green Economy
Mill earnings We Can Be Leaders in a Green Economy Lower Return on Capital Employed (ROCE) Improved Long-term Return on Capital Employed (ROCE) Current business model Future business model Mill earnings Wood Cost Wood Cost Operating Cost Operating Cost Pulp Revenue Pulp Revenue Carbon Premium on woo
Slide 11: Bioenergy Targets in the EU until 2020
20% reduction of fossil carbon dioxide emissions 30% of all other large emitters outside the EU are required to join in and ratify the Kyoto protocol 20% of energy consumed to be from renewable energy sources 2/3 of this energy is forecasted to be from bioenergy 20% improvement in energy efficiency
Slide 12: Supply Shortfall of Solid Biomass in 2020
515-540 720-800 355-370 160-170 200-260 340-420 ~380 Supply - Estimated Total Demand - Estimated Total Demand - for energy production Demand - pulp, paper, board, and solid wood products Mobilization, net imports and recovered wood Supply Source: CEPI 2007 Supply Shortfall Current forest biomass sup
Slide 13: Level Playing Field: EU Member States Have Individual Ways to Achieve Targets
Both feed-in tariffs and quota systems exist across Europe in order to boost renewable energy usage Feed-in tariffs guarantee different specific feed-in tariffs for different technologies Quota systems guarantee a variable premium on the market price, where the most efficient technologies generate t
Slide 14: Biomass Policy Conundrum - BC Example
Biomass Policy Conundrum - BC Example Background The BC Pulp & Paper Industry has always been a consumer of sawmill bark waste, sawdust, sawmill chips and a small amount of standing timber This biomass converts into approximately 7 million tonnes of pulp and paper and 123 million GJ of fuel, which t
Slide 15: Biomass Policy Conundrum - BC Example
Biomass Policy Conundrum - BC Example Cumulative volume of biomass 0% 100% Low Cost Low Volume High Cost High Volume Biomass Cost/Volume Continuum Not Used Currently Used Low Cost High Cost Policy Distortions European subsidies for pellets have allowed producers in BC to be able to outbid existing b
Slide 16: Threat of Bioenergy to the Forest Products Industry
Biomass electricity projects could be a major benefit to Northern Hemisphere pulp mills if there is a level playing field with other players for green electricity pricing. Pulp mills are the natural location for expanded biomass electricity production. Environmental footprint already exists with pot
Slide 17: Pulp Transition to Bioenergy Economics
The transition to bioenergy economics is happening with Europe at the forefront and other first world jurisdictions following suit Historically, wood has been priced in the market based on its value for alternative uses, such that saw logs were more valuable than pulpwood Wood's energy value has not
Slide 18: The Emerging Role of the Pulp & Paper Industry
The Emerging Role of the Pulp & Paper Industry P&P already has access to biomass and fiber resources, existing supply chains and experienced management The industry has extensive process know-how and experience concerning power production and wood and chemical processing Pulp mills are already well
Slide 19: Pulp and Paper Industry Challenges and Mercer's Way Forward
Pulp and Paper Industry Challenges and Mercer's Way Forward Government policies and objectives play a dominant role in the development of bioenergy and will heavily influence who the "winners" will be There are differences between jurisdictions Biomass feedstock is limited, new players could disrupt
Slide 20: Pulp and Paper Industry Challenges and Mercer's Way Forward
Pulp and Paper Industry Challenges and Mercer's Way Forward Mercer sees biomass electricity as the last stage in the process to maximize the value of the products extracted from biomass, which include solid wood, fiber, specialty chemicals and finally - the production of bioenergy R&D in this field
Slide 21: Thank you for your attention
Thank you for your attention
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