Mercer International Inc. to Acquire One of Germany's Largest Sawmills and a Bio-Mass Power Plant

2017 03 06 101042Mercer International Inc. (Nasdaq:MERC) (TSX:MERC.U) has just announced that it has entered into an agreement to acquire substantially all of the assets of one of Germany’s largest sawmills and a bio-mass power plant, near Friesau, Germany (the "Friesau Facility") for approximately $55.1 million plus defined working capital of approximately $9.0 million.

Friesau Facility Highlights

The Friesau Facility:

  • has an annual production capacity of approximately 550 million board feet (mmfbm) on a continuously operating basis and 465 million mmfbm on a customary three-shift operating basis;
  • includes a modern bio-mass fueled cogeneration power plant, built in 2009, with an annual production capacity of approximately 13MW of electricity and 49.5MW of thermal energy. The plant sells electricity pursuant to a long-term fixed price green power tariff that runs to 2029;
  • includes two log de-barking and sorting lines, two Linck primary breakdown lines, lumber kilns capable of matching sawmill production, and a two-line planer mill;
  • has an experienced workforce of approximately 300 employees; and
  • is located approximately 16 kilometers west of our Rosenthal mill and has historically been one of its largest fiber suppliers.

Selected Historical Financial Information

Based upon its historical unaudited financial information, over its last three fiscal years, we believe the Friesau Facility had average annual:

  • revenues of approximately $180 million;
  • lumber production of approximately 320 mmfbm;
  • energy sales of approximately $10 million; and
  • EBITDA of approximately $13 million, comprised of approximately $9 million from lumber operations and approximately $4 million from energy sales. See "Non-GAAP Financial Measures" below.

Potential Operating Synergies

We believe the acquisition of the Friesau Facility presents the following potential operating synergies and opportunities:

  • operating synergies in the range of $4 to $7 million per year, primarily relating to the sharing of wood and bio-mass fuel resources and the optimization of staffing and services with our Rosenthal mill. We currently expect to achieve about one-third of such synergies within 12 months of closing and the balance over the following 6 months;
  • the opportunity to materially increase lumber production particularly at the start of 2018; and
  • the opportunity to reduce costs and improve sales realizations at the Friesau Facility through targeted capital upgrades.

Recent Production and Ramp-Up

Over the last two years, the Friesau Facility has been operated by its owner on a restricted basis at a level below 50% of capacity.  While we intend to ramp-up production upon closing, in the mill's fibre region, major sawlog contracts are generally awarded on a yearly basis.  As a result, we expect such production ramp-up to be materially increased commencing at the start of 2018. After such ramp-up, we currently expect to operate the Friesau Facility to produce between 300 and 330 mmfbm of lumber per annum. During the initial integration period of the Friesau Facility, which we estimate will take about 4 to 6 months, we do not expect the acquisition to contribute to our earnings. 

The transaction is subject to customary closing conditions, including receipt of requisite regulatory approvals, and is expected to complete around the beginning of the second quarter of 2017.

Mr. David M. Gandossi, Chief Executive Officer, stated: "We are pleased to enter the European lumber sector, with the acquisition of one of Germany’s largest sawmills. The proposed acquisition also expands our existing presence in the bio-mass based electricity market and is in line with our long-term growth objectives. 

Mr. Gandossi continued: "This acquisition leverages our core competencies of wood procurement, production optimization and green energy production. We believe it presents a natural fit with our existing procurement activities and our expertise in bio-mass based electricity production."

Mr. Gandossi concluded: "We look forward to welcoming the Friesau Facility's employees to our team and working with them as we integrate its operations."

Mercer International Inc. is a global pulp manufacturing company. To obtain further information on the company, please visit its web site at


Tube 2018: FA 09 Tripods, Jackets and Tripiles: Innovative Tube Systems for Offshore Wind Energy Systems

Steel tubes or steel tube systems are among the most frequently used constructive elements for the foundations of offshore wind energy systems. In addition to the size and the weight of a wind energy turbine, water depth plays a primary role when it comes to choosing the type of foundation, and it normally increases in line with the distance to shore. In the “Wind Energy Report Germany 2014” published in mid-2015, the Fraunhofer Institute for Wind Energy and Energy System Technology in Kassel (Fraunhofer Institut für Windenergie und Energiesystemtechnik, IWES) says that the most important offshore countries increasingly rely on a further extension of their farshore energy systems, i.e. offshore sites with a distance from shore of at least three nautical miles or 5.5 kilometres.

Especially in Germany, most offshore wind farms are realised in higher water depths and distances from shore to avoid any negative impact on the marine environment in the Wadden Sea National Park. According to IWES, the offshore wind energy systems added worldwide in 2014 were built in an average distance of 21.1 km from shore and a water depth of 32.3 m. In contrast, German offshore farms are located at an average distance of 65 km from shore and in a water depth of approx. 29 m - the international comparison thus shows that these systems are located farthest away from shore.

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High diversity of support structures

The trend of constructing offshore wind farms in increasingly deep waters has a profound impact on the support structures deployed (i.e. the structure used to anchor the turbine foundation on the seabed). After initially deploying gravity foundations and mono piles, other structures are now used increasingly. In addition to the high-rise power caps deployed in Asia, latticed support structures (jackets), tri-sectional foundation foundations (tripiles and tripods) as well as floating foundations, suction buckets and artificial islands should be mentioned in this context.

According to IWES, the various designs are suitable for differing on-site conditions. Gravity foundations, monopiles and high-rise pile caps are primarily used in nearshore and shallow waters. The tripod and tripile types of anchoring foundation are deployed at an average distance of 96.5 km and thus farthest away from shore. Floating structures are deployed in an average water depth of 78 m and must still be considered as being in a test phase. As regards monopiles, it must be added that their manufacturers develop larger and larger models which may also be used in deeper waters.

Offshore wind energy farms must have an especially high stability and robustness to withstand the powerful forces of nature throughout their lifetime of 20 years or more. In addition to high wind speeds, the turbines are particularly impacted by waves, ocean currents, tides and floating ice. In addition, there are the dynamic loads generated by the wind turbines themselves. Support structures based on steel tubes are capable of withstanding all loads and of reliably carrying their superstructures for decades.

Tripods: Three-legged support structures for offshore wind turbines

A tripod consists of three steel tubes welded together at an angle of 120° to form a tripod which then carries a precisely centred central tube. A tower is than fitted on this tube. The tubes of the tripod construction have a diameter of 1 to 2.5 m each and require a triangular base surface of 200 to 300 m². Each leg may have a single pile or consist of several tubes. Similar to jackets, centring sleeves are mounted at each end of the tripod structure to support the foundation pile driven into the seabed. The piles are interconnected by horizontal struts and joined to the central tube by a diagonal brace.

The ground surface should be level and free of too many stones, as the structure is anchored to the seabed at a depth of several metres using pile driving machines. Tripods offer high stability even in rough sea areas and - with the current state of the art – they are suitable for water depths of 20 to 80 m. The tripod support structures especially developed for the offshore wind industry were first deployed in 2009, when the German “Alpha Ventus” offshore test site was built.

Jackets: Latticed steel tube structures for large depths

For decades, jackets have been proven support structures for offshore platforms even at large water depths. In this case, the anchoring structure consists of a spatial lattice, which is made of steel tubes and similar to the latticed towers used for high-voltage power lines. The four feet of the foundation end in sleeves housing the foundation piles driven into the seabed. Because of their high resistance, jackets are suitable for offshore wind parks up to a water depth of 70 m. The “Alpha Ventus” test site did not only have tripod structures, six other wind turbines were installed on jacket foundations.

Compared to tripod foundations, a jacket is supposed to require a third less steel. Furthermore, the latticed support structure of the jacket is supposed to lead to benefits in terms of both capital expenditure and the logistics of the installation. On the other hand, jackets have a large number of welded connections with many edges and struts, which require regular maintenance because of their significantly higher corrosion risk, and may therefore lead to higher operating cost.

Tripiles: Lightweight and low-cost

Just as tripods, tripile foundations were especially designed for offshore wind farms. Tripiles consist of three individual steel tubes which carry a tripod crosspiece at the water surface to install the wind turbine. Compared to monopiles, the individual tubes are of a smaller diameter and more easily driven into the seabed. Tripiles are anchored in the seabed using a pile-driving template. The three steel tubes are then fitted with a tripod crosspiece to carry the wind turbine. The installation process is considered to be relatively demanding, as the piles have to be driven in with great accuracy so that the supporting crosspiece can be precisely installed.

Tripiles are suitable as foundations for water depths of up to 50 m and, according to the manufacturing data they are less expensive and lighter than other support structures. It is supposedly possible to adapt the wall thicknesses and lengths of each tube specifically to a given site. The first tripiles were realised in the BARD Offshore 1 wind farm in the North Sea and in the nearshore Hooksiel wind farm.

Hexabase: Steel tube foundation with a hexagonal layout

Two recent developments in the support structures of offshore wind farms are the hexabase foundation and the texbase hybrid gravity foundation which is based on the same principle. Hexabase, a steel tube foundation with a hexagonal layout. supposedly has major advantages compared to the more traditional structures: it is more efficient and more economic in production and installation. Compared to conventional jackets or large monopiles, it promises reductions of up to 20% in weight and up to 20% savings on manufacturing cost. Furthermore, it supposedly has a particularly high adaptability to various water depths and wind turbine types. The hexagonal lattice structure consisting of tubes with comparatively small diameters and wall thicknesses is said to show a particularly good absorption capacity for the dynamic forces generated by wind turbines.

According to ThyssenKrupp, an important prerequisite for realising these savings is that a majority of the tubes used is made of hot-rolled wide strip. It is said that hot-rolled wide steel strip can be more easily processed to structural tubes than the quarto sheets, which have been used so far. The welded tubes have a uniform diameter and the nodes are also standardised for the welding robots to automatically connect the tubes and nodes. According to its developers, the process promises faster and cost efficient production and consistent weld quality because of the computer-operated welding process.

Texbase: A “lightweight” hybrid gravity foundation

Based on the hexabase principle, the texbase structure was developed as a hybrid gravity foundation combining the properties of a lightweight steel structure and a gravity foundation. A hexabase standard structure is mounted on the base structure of ballast tanks which are made of particularly durable water-permeable synthetic fibres and filled with 2,000 to 4,000 tonnes of sand. The base consists of a frame of steel tubes which is then covered with geotextile fabrics and evenly transfers the load into the ground.

With a weight of 450 to 700 tonnes before installation, the weight of a texbase structure is similar to a traditional foundation. The foundation supposedly requires only a minimum of soil preparation and may be installed with simple construction machinery and little noise. According to the developing community, this innovative gravity foundation is easy to transport, and after it has been installed in a water depth of up to 50 m, it also guarantees a firm stand even for the largest wind turbines of at least 8 MW power.

Innovations from the tube and pipe industry will be presented at Tube Düsseldorf from 16 to 20 April 2018 at Düsseldorf fairgrounds.


Pöyry at Lignofuels 2017: Mastering the whole value chain a prerequisite for profitable bioproduct business

Advanced biofuels and biomaterials have been high on industrial companies’ agendas for several years. Investments in R&D, pilot projects and development initiatives have also generated some commercial scale production, but a lot of potential is still untapped.

Nicholas Oksanen, President of Pöyry’s Industry Business Group, recently gave a presentation at the Lignofuels 2017 Conference in Helsinki, Finland, about advanced biofuels and materials and a European market overview. In his presentation, Oksanen noted that woody biomass is gaining interest as a feedstock for biofuels while its use is still rather limited. 

The benefit of advanced, or 2nd generation feedstocks (lignocellulosic feedstocks, non-food crops, industrial waste and residues), is that they are more sustainable compared to 1st generation, food or feed based feedstocks such as corn, sugarcane, soybean oil or rapeseed oil. Secondly, compared to crude oil, sugar and maize, the price level of wood has remained stable through the 2000s and 2010s while the prices of the alternative feedstocks have experienced great fluctuation.  Also, by using harvesting and side-stream residues as biofuel and materials feedstock instead of burning them for energy, companies are able to maximise added value. 

Woody biomass is gaining interest as feedstock for bioproducts

bioproduct feedstock prices

source: Pöyry

“Biobased products also present new product opportunities for industry players. For example lignin, nanocellulose, hemicelluloce or tall oil open new business potential for bioenergy, biofuels and biochemical sectors and the packaging industry,” Oksanen said. “The EU’s ‘Renewable Energy Directive’, which prioritises waste and residues, has also increased the industry’s interest in 2nd generation feedstocks.”

 Bioproduct opportunities for Pulp & Paper companies

bioproduct opportunities

source: Pöyry

While the opportunities are lucrative, there are challenges that have slowed down larger scale bioproduct investments. At the moment, one of the major challenges is caused by political uncertainty and the direction of the EU legislation, imposing a market risk for companies. Also, country-based biofuel policy mechanisms would require harmonisation. With the exception of wood, advanced feedstock sourcing and the supply chain is still immature and requires further development before it can be relied on.

“For companies, the main focus is to find a valid business case in which the feedstock price plays a big role. However, it is crucial to master the whole value chain from feedstock to markets to ensure profitable business and investment,” Oksanen summarises.

 bioeconomy value chain

source: Pöyry

About Pöyry

Pöyry is an international consulting and engineering company. We deliver smart solutions across power generation, transmission & distribution, forest industry, chemicals & biorefining, mining & metals, transportation and water. Pöyry's net sales in 2016 were EUR 530 million. The company's shares are quoted on Nasdaq Helsinki (POY1V). Approximately 5500 experts. 40 countries. 130 offices.


ANDRITZ acquires Franssons Recycling Machines

International technology Group ANDRITZ has acquired technology and intellectual property assets from Franssons Recycling Machines AB, located in Sundsvall, Sweden.

Franssons Recycling Machines is a global pioneer in manufacturing and development of machinery for treating waste, wood, and biomass as well as for recycling plastic, paper, and cardboard. Franssons has been an established und experienced supplier of industrial shredding and recycling technologies for 70 years, with many references around the globe.

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Franssons Universal Shredder FRP Photo - Andritz

The well-known and proven products and solutions of Franssons will be assigned to ANDRITZ’s Recycling product group (part of the Pulping and Fiber Systems Division, PULP & PAPER business area), further complementing its product offerings in recycling, which extend from refrigerator and electronic waste recycling to reject systems for the pulp and paper industry. ANDRITZ is thus able to provide its customers with even more comprehensive solutions and services in the recycling sector.

ANDRITZ is a globally leading supplier of plants, equipment, and services for hydropower stations, the pulp and paper industry, the metalworking and steel industries, and for solid/liquid separation in the municipal and industrial sectors. The publicly listed technology Group is headquartered in Graz, Austria, and has a staff of approximately 25,500 employees. ANDRITZ operates over 250 sites worldwide.

ANDRITZ PULP & PAPER is a leading global supplier of equipment, systems, and services for the production and processing of all types of pulps, paper, tissue, and cardboard. The technologies cover the processing of logs, annual fibers, and waste paper; the production of chemical pulp, mechanical pulp, and recycled fibers; the recovery and reuse of chemicals; the preparation of paper machine furnish; the production of paper, tissue, and board; the calendering and coating of paper; as well as treatment of reject materials and sludge. The service range includes modernization, rebuilds, spare and wear parts, service and maintenance, as well as machine transfer and second-hand equipment. Biomass, steam, and recovery boilers, as well as gasification plants for power generation, flue gas cleaning plants, plants for the production of nonwovens, dissolving pulp, and panelboards (MDF), as well as recycling plants are also allocated to the business area.


Valmet to supply automation to the new Ferrybridge 2 waste-to-energy facility in Knottingley, UK - marking the tenth order from Hitachi Zosen Inova

Valmet will supply automation to Scottish and Southern Energy's new Ferrybridge 2 waste-to-energy facility in Knottingley, West Yorkshire, UK. The order was placed by Hitachi Zosen Inova AG (HZI), the engineering, procurement and construction contractor for the facility. This is the tenth time that HZI has chosen Valmet's automation technology for its waste-to-energy plant projects. With Valmet's advanced automation solutions, the facilities are able to reach high process availability and extract maximum energy value from the thermal treatment of the waste.

The order is included in Valmet's fourth quarter 2016 orders received. The value of the order will not be disclosed. Typically, the order value of automation system deliveries ranges from below EUR 1 million to EUR 3 million. The delivery will take place in June 2017, and the system will be handed over to the customer in July 2019.

"HZI is pleased to continue its cooperation with Valmet, building on our long-standing relationship and the earlier success of both Ferrybridge 1 and previous projects," says Douglas Else-Jack, Head of Supply Management at HZI.

"In the past ten years, HZI has repeatedly chosen Valmet's technology. Our team has had excellent cooperation with HZI, leading to a framework agreement last August. Also, the end customer, Scottish and Southern Energy, has good experience with the Valmet DNA automation system at their Ferrybridge 1 plant. Especially the system's management reporting tools, which make it stand out from other automation systems on the market, have been really appreciated by the operators," says Rene Neubert, Sales Director, Automation business line, Valmet.

Ferrybridge 1 and 2 operate with Valmet's automation

The Ferrybridge 2 power plant will be built next door to the recently completed Ferrybridge 1 power plant that also uses the Valmet DNA system. Using a thermal waste-to-energy process, the new plant will annually handle around 570,000 tonnes of waste-derived fuel from various sources, such as municipal solid waste, commercial and industrial waste and waste wood. The plant will produce enough energy to power around 170,000 homes. With a net energy efficiency of 31%, it will be on a par with its sister plant and also rank among the top facilities in Europe.

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Details about Valmet's delivery

Valmet's delivery to control the new plant's boiler, flue gas treatment and balance of plant will include a Valmet DNA automation system, an information management system, field engineering, commissioning and training.

Information about the customer Hitachi Zosen Inova

Zurich-based Hitachi Zosen Inova (HZI) is a global leader in energy from waste (EfW), operating as part of the Hitachi Zosen Corporation Group. Formed from the former Von Roll Inova, HZI acts as an engineering, procurement and construction (EPC) contractor delivering complete turnkey plants and system solutions for thermal and biological EfW recovery. The company's customers range from experienced waste management companies to up-and-coming partners in new markets worldwide. HZI's innovative and reliable waste and flue gas treatment solutions have been part of over 600 reference projects delivered since 1933.

Valmet is the leading global developer and supplier of process technologies, automation and services for the pulp, paper and energy industries. We aim to become the global champion in serving our customers.

Valmet's strong technology offering includes pulp mills, tissue, board and paper production lines, as well as power plants for bioenergy production. Our advanced services and automation solutions improve the reliability and performance of our customers' processes and enhance the effective utilization of raw materials and energy.

Valmet's net sales in 2015 were approximately EUR 2.9 billion. Our 12,000 professionals around the world work close to our customers and are committed to moving our customers' performance forward - every day. Valmet's head office is in Espoo, Finland and its shares are listed on the Nasdaq Helsinki.