Richard Spinks says Roddickton and St. Anthony are still part of the game plan for the Active Energy Group’s (AEG) business plan on the Great Northern Peninsula.
Spinks is managing director for Timberlands International Ltd., a subsidiary of AEG, that has been granted two five-year timber leases on the Great Northern Peninsula.
Spinks had hoped to be in Hawke’s Bay on Thursday, for the official press conference to announce the details.
But a massive Nord’Easter winter storm stole the show and the announcement came instead in a basic government press release.
In a telephone interview from the Ukraine late on Friday, Nov. 30, Spinks told The Northern Pen even though the two towns were not mentioned in the press release, the company’s business plan includes them.
He said the company has arrangements in place with about a half dozen local logging operations to harvest the timber from Forestry Management Areas (FMA) 17 and 18 to feed the pellet facility in Hawke’s Bay once it is up and running.
But not all logs harvested will end up as wood pellets to heat European homes.
Spinks confirmed one of the conditions of the timber licence granted to them by the province is that saw logs — logs that can be sawed into lumber — be available to local sawmills.
And that’s where Roddickton comes into play, Spinks told The Pen.
Timberlands/AEG has 83,000 cubic meters of cutting permits in Area 18, said Spinks.
“Roddickton is perfectly located in the centre of area 18,” he said. “We have had, for more than 18 months, we’ve had a plan … that they would cut their permits and our permits, and we would contract them to do so in our permit area. And all of us must have a home for our sawlogs.”
It’s not economical to truck the sawlogs from Area 18 to sawmills off the Northern Peninsula, said Spinks.
The hitch is the sawmill is currently not operating. It’s been shut down since 2012.
“We’re trying to help that private company bring that sawmill back to life so he can take our sawlogs,” Spinks said.
That dialogue is ongoing, says Spinks, and until the final outcome, nothing is set in stone.
He says that’s why the province was not able to make any mention of Roddickton in its announcement in Hawke’s Bay on Wednesday.
“They could only announce what’s firm and concrete; that doesn't mean that’s the whole picture,” Spinks said. “It isn’t.”
“Roddickton was not mentioned in government’s announcement . . . only because we had not yet been able to confirm how exactly we would get the sawmill up and running again in Roddickton,” said Spinks.
As for why Hawke’s Bay was the best location for the pellet manufacturing facility, Spinks explained it simply comes down to logistics and costs.
“For me to take the cheapest ‘scraggins’ of the forestry industry and turn them into a valuable product, I don't want to be hauling very far,” he noted. “We calculated that it costs about C$9 per cubic metre, per hour to move any kind of wood via trucking.
“If you have a high value sawlog, and you can sell them for high value, then you can afford to move them further. But you don’t want to be hauling pulp wood or junk wood very far.”
About 60 per cent of the company’s timber permits are in Area 17, he said, within an hour or two of Hawke’s Bay.
“I can afford to move that material for up to C$19/cubic metre.”
Roddickton, however, is a four to five-hour drive from FMA 17.
And putting the pellet plant in Roddickton, with more than twice the distance for trucking, was simply not economical for the company. It would double the trucking costs.
“It would drive the cost to $36 per cubic metre, just to go that extra distance,” says Spinks. “And economics are critical, so we can have a sustainable, long-term business.
“We’re not going to build a business to fail.”
Spinks added both = areas will be clearcut, creating more opportunities in the local forestry industry.
“My business allows the local loggers and the sawmillers to cut their entire block of wood because now they (will) have a market not only for sawlogs, but for pulp logs, and sawlog residue and waste from the sawmilling operations,” he said.
Without Timberlands and Active Energy in the mix, Spinks said, loggers and sawmillers on the Northern Peninsula would have no more business than they do today.
The other major cost for the company, he said, is marine shipping, to get the final product to consumers in Europe.
That means using big ships.
Roddickton does not have a port.
But Hawke’s Bay does.
The community used to be a loading site for zinc ore. Spinks noted it still has the infrastructure in place from that time. A loading wharf extends from the shore to deep water, allowing a ship to pull alongside to load up.
This would also eliminate trucking costs for the company, Spinks said.
He noted that each single shipload of product from Hawke’s Bay is the equivalent of 9,000 truckloads.
If they had to truck that amount the 128 kilometres to the port in St. Anthony, it would cost the company about $1 million annually, said Spinks.
He says the option of direct shipping from Hawke’s Bay also eliminates what could have been a problem for St. Anthony.
“In St. Anthony there’s a single road leading to the port; do you think they would want to see endless rows of trucks lined up along that road taking that material to the ships?”
Spinks said some of the products out of from Hawke’s Bay will go through the St. Anthony port.
Some customers, he said, will require smaller container shipments.
“So when we are sending (to some of our customers) container shipments of our product, they will go to St. Antony’s container port.”
More details to come
Spinks said the company had planned to lay out these details in the scheduled press conference on Thursday.
But the major storm hijacked those plans and the finer details did not get delivered.
To ensure the message is clear, Spinks said company co-director Tom Harty, who lives in Pasadena, will be on the Northern Peninsula in the coming weeks — he’s planning a stop in Roddickton on Monday, Dec. 3 — to meet with local people and offer more information.
Spinks himself also hopes to visit the Great Northern Peninsula again before Christmas for follow-ups.
And after two weeks of confusing company statements and government press releases, compounded by weather-interrupted official announcements, Spinks says, from his perspective it’s all “water under the bridge.”
He said, “One day, everyone will be gathering over a jigs dinner and saying, ‘Do you remember when we thought this would never happen?’, and it happened.’”