Sumitomo Corporation (Head Office: Chuo-ku, Tokyo; President & CEO: Kuniharu Nakamura) has acquired 47.6% of the shares of the wood pellet manufacturer Pacific BioEnergy Corporation (Head Office: British Columbia, Canada; CEO: Donald Steele; hereinafter, “PBEC”) and made its entry into the wood pellet manufacturing business in Canada.
Wood pellets, a biomass fuel produced by pulverizing and compressing dried wood fibers, have been garnering attention for their low environmental impact and highly efficient calorific value. Demand for biomass power generation is rising not only in EU countries but in Japan and the rest of Asia as well, and demand for wood pellets is also expected to expand. Wood pellets have attracted particular attention in Japan as a means of improving power generation efficiency to achieve the FY2030 energy mix formulated by the government in 2015.
Canada boasts the world’s largest expanse of suitably managed sustainable forests recognized under international forest certification programs. The lumber industry has taken root as a principal industry in the province of British Columbia, home to more than 60 million hectares of forest and now one of the world’s leading suppliers of quality wood pellets. PBEC, through its own and affiliated manufacturing facilities, currently markets in excess of 550,000 tonnes of industrial grade wood pellets per annum and is Canada’s second largest wood pellet manufacturer.
Sumitomo Corporation began importing biomass fuel into Japan for power generation in 2008. Biomass fuel is seen as a promising energy source for encouraging wider use of renewable energies in Japan, and Sumitomo Corporation has been developing reliable sources overseas to complement domestically-produced biomass fuel. In acquiring a stake in PBEC, Sumitomo Corporation is seeking to establish a steady wood pellet supply for the long term and thereby help spread and promote renewable energy.
CCC Investment Banking acted as exclusive financial advisor to Pacific BioEnergy Corporation.