‘Biorefining is just a must’: Forestry Mill exec says wood is ‘simply too expensive in this country to waste any’

“To compete in Canada with these difficult global markets, we have to extract every piece of value from the wood, from the raw material,” said Peter Vinall Monday, on his first day off the job at AV Group – a subsidiary of India-based Aditya Birla Group – which runs the AV Cell and AV Nackawic dissolving-pulp mills.

“Biorefining is just a must, as is energy self-sufficiency,” Vinall said, as a regional task force on bioenergy publicly released its final 75-page report.

The Atlantica Bioenergy Task Force, a consortium of industry, academic and government partners based in New Brunswick, Nova Scotia and Maine, made 15 recommendations on sustainable forest management, biomass management, energy policy, education, research and development and technology implementation. (To read the report, click here.)

Bruce McIntyre, a PricewaterhouseCoopers LLP consultant at the helm of the task force and leader of the company’s forest, paper and packaging division, said in a statement that the report was meant to address a dire situation in forestry.

“The region is rich in forests and has historically depended on the forest industry to drive its economy,” McIntyre said. “But the region is now struggling to attract new investment and is facing the added challenges of high log and wage costs, weak markets, and energy costs that are above average.”

One of Vinall’s long-standing personal ambitions, also a goal of AV Group, has been to use residues from the company’s processes to create energy and other lucrative products.

Vinall said AV Group has commissioned several studies, extensive laboratory tests and even trials on the bioenergy potential for its plants.

The company already has interested third-party buyers lined up to take on byproducts.

AV Group’s two most promising avenues for new revenue from bioenergy, Vinall said, include converting hemicellulose – a natural product of the pulping process – into sweetener, or using residues to make fuel.

Frank Slater, the chief operating officer of AV Nackawic who has taken on Vinall’s responsibilities at that mill, said the company’s long-term goals for bioenergy remain in place despite current market turmoil that is eating at profits and preventing the company from investing.

“Wood is just simply too expensive in this country to waste any,” Slater said.

Current poor global demand for rayon, the end-product of the company’s pulp, means the mills may face temporary shutdowns in the next year before being able to act on bioenergy plans.

“Unless we see a real turnaround in the next couple of months, there’s likely to be a downtime in the middle of the year, perhaps in the next two to three months,” Vinall said.

Aditya Birla Group, which purchases the mills’ pulp to produce viscose staple fibre used in making rayon, had a contract to support AV Group until the beginning of 2009.

From now on, that contract is on a month-to-month basis.

Next week, Vinall flies to Shanghai where he has been hired on at a company whose dissolving pulp competes with AV Group’s mills as a supplier to Aditya Birla Group.

AV Group will operate in the next several months without a president and CEO, Slater said.

The task force report addressed challenges preventing industry from moving on bioenergy, including large capital cost expenditures, gaps in policy, technology and research.

Ryan Donaghy, a spokesman for Business New Brunswick, said the provincial government has received the report and that his department, as well as other departments involved including natural resources and energy, would study its findings.

“We’ll be working with industry on how we can best support them,” Donaghy said.

“The report is going to help advance forestry into the new bioeconomy.”

Premier Shawn Graham and ministers of related departments were not available for comment Monday on the task force report recommendations.