April 27, 2016 3:37 am JST

Nippon Paper eyes 'roasted' wood pellets as earnings source

TOKYO -- Nippon Paper Industries will begin tests next spring on a process it plans to use to mass-produce efficient-burning wood pellets as a biomass fuel for electricity generation starting in fiscal 2018.

     The so-called torrefied wood gets its name from torrefaction, a process similar to coffee roasting. Wood is heated at relatively low temperatures for less than an hour to yield a substance that burns with double the heat volume of wood chips, effectively doubling the power generation efficiency.

     Despite global research on torrefied wood as a biomass fuel, few companies have taken the next step to develop a means of mass production. Nippon Paper intends to leverage its papermaking experience to quickly establish this as a source of earnings for its energy business.

     For the biomass source, the company will import eucalyptus and other tree materials harvested in Thailand by a division of SCG Packaging, a leading papermaker there in which it holds a 22% stake.

     The wood will be shipped to Nippon Paper's Kushiro mill in Hokkaido, where it will be mixed with coal and heated to produce torrefied wood pellets.

     For testing, Nippon Paper is preparing a system with an output capacity for 8,000 tons of fuel pellets a year.

     The papermaker will work with trading house Mitsui & Co. to carry out market surveys in Asia and assess trends among energy producers in Japan and South Korea.

     If the studies determine that the business will be profitable, Nippon Paper will enhance its production capacity tenfold in fiscal 2018.

(Nikkei)

Nippon Paper Industries Co., Ltd.

Japan

Market(Ticker): TKS(3863)
Sector:
Industry:
Process Industries
Pulp & Paper
Market cap(USD): 2,070.95M
Shares: 116.25M

Mitsui & Co., Ltd.

Japan

Market(Ticker): TKS(8031)
Sector:
Industry:
Distribution Services
Wholesale Distributors
Market cap(USD): 26,090.71M
Shares: 1,796.51M

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