Rentech, Inc. is quickly emerging as a growing, diversified supplier of wood chips, wood pellets and nitrogen fertilizers. The Company also owns patented technologies for synthetic fuels and power production that can be licensed by third-parties.
Wood Fibre Processing
The new Rentech has secured the critical foundation of a multi-pronged strategic vision of becoming one of the largest wood processing companies in the world. In May 2013, Rentech acquired Fulghum Fibres, a leader in fibre processing services for wood chips production, with 24 years of operating experience and a portfolio of established customers under long-term contracts.
Fulghum Fibres provides Rentech with a stable operating and financial platform with inherent growth opportunities within the sector. The Company intends to use this platform to launch into the complementary, growing wood pellet industry, a natural extension of chip production. Fulghum Fibres brings operating and processing expertise to the front end of the Company's wood pellet business, as each pellet mill requires wood handling and production of chips. Fulghum Fibres also brings a joint venture with Graanul Invest, a European company that is one of the largest pellet producers in the world, to develop and construct pellet projects in the U.S. and Canada.
Rentech orchestrated an impressive and strong entry into the wood pellet industry with long-term contracts with Drax Power Limited and Ontario Power Secured contracts for the delivery of over 4 million metric tons of wood pellets over 10 years using sustainably managed Crown fibre in Eastern Canada. Additionally, Rentech secured the logistical supply chain for the delivery of the pellets under long-term contracts. We are converting two fibre mills in Eastern Canada for pellet production, with the first delivery anticipated for the second quarter of 2014.
We believe our investment in the wood fibre industry will create value for our shareholders because of the following key attributes of the sector:
- Stability of cash flows
- Long-term customer, supply, and logistics contracts
- Diversification of products and markets
- Commercially available technologies
- Global and growing markets
- Capital requirements to execute on the strategy are within Rentech's anticipated resources
- Leverages Rentech's expertise and resources
- Income qualifies for a Master Limited Partnership (MLP) structure
We intend to grow our wood chip and wood pellet business with the goal of becoming one of the largest wood processing companies in the world.