Canadian Viridis Energy Inc., which is an international energy company specializing in the agricultural and forestry wastes and biomass, has announced that its subsidiary Viridis Merchants Inc., an aggregation and trading service between buyers and sellers of alternative energy, has signed its first deal on wood pellet supplies.
The Company has signed the contract with the U.S. producer of wood pellets for supplying about 60 thousand tons of wood pellets on the European household market that is approximately 30% of the producing capacity of the pellet plant.
According to the contract pellets will be delivered once a month over the next 12 years starting from April 1, 2014 with the annual earnings of $ 8 million.
In 2014 Viridis is going to increase wood pellet production and double the profit from the sale of pellets up to $ 30 million as a result of the modernization of the pellet plant in Nova Scotia (Canada). Thus, Viridis Energy has already raised $ 517 520 of state funds. The Company plans to reach the full production of the plant in the second half of 2014.
Moreover, the Company expects Viridis Merchants Inc. to be a profitable addition to its production capacity, what proves the first successful transaction, which allowed Viridis to start in 2014 with the production capacity of 240 thousand tons of pellets, what is much higher than the last year’s indicator.
Besides the plant in Nova Scotia, Viridis also owns Okanagan Pellet Sompany Inc. (OPC), which is located in Canada as well. OPC in March of this year has entered into a loan facilities agreement providing for a $ 3 250 000 secured loan with the Royal Bank of Canada. The funds will be mainly used to repay the company's debt held by Cornwall Investments LLC. Viridis received the critical funding from Cornwall in its early development stage. In addition, RBC has allocated the Company $ 250,000 for general working capital purposes.
Considering the growing demand for wood pellets in Europe combined with Nova Scotia's access to transatlantic ports, Viridis Energy increases wood pellet production. Since April 1 of the current year the Company has been producing about 240 thousand tons of pellets compared with 180 thousand tons of the previous year. The Company plans to increase wood pellet production and double the revenues up to $ 30 million a year.
Author: Ivan Prokhorov
