re: Ann: Agreement With Egyptian MDF Panelboa... I’m trying to...

re: Ann: Agreement With Egyptian MDF Panelboa... I’m trying to look at the recent announcement to try to get some sense of what is being undertaken in Egypt (remembering that PPY have half the joint venture), so the following is a bit of armchair theorising to stimulate discussion. Any corrections by the brains-trust welcome.

The original prospectus had 2 million tree trunks to produce 20,000 tonnes of ‘paper’, and 80,000 tonnes of water- so its 100 trunks to the dry tonne! If we assume that the outer material (to be chipped for fibre) is 2/3 of the total and the inner trunk material (to be veneered) is 1/3 of the total. That means that to produce 5000 tonnes of outer ‘fibre’ per year for our new partner we would need to process 750,750 trunks or billets (i.e 150 trunks to the tonne).

The only references I can find to bagasse prices seems to be around $40 a tonne- it’s a pretty low value material! So if the price for PPY’s fibre material ‘has regard to the then price of bagasse fibre on an equivalent dry basis’ then revenue for a year is only $200,000. I might be way out so lets just call it half a million dollars. On this basis there is 66c revenue per billet. ANYONE HAVE AN ACCURATE BAGASSE PRICE??

PPYinterest’s theory is that each billet produces a square metre of veneer as well, so if the trimmed metre sells for $5 then the veneer revenue is $3.75 million.

On this basis it hardly going to be viable producing the fibre- the costs to veneer it then dry and chip would be much more than half a million dollars a year.

This 750,750 billets per year translates- if you run say one 8 hour shift per day for 300 days per year- at over 300 billets per hour (each and every hour). Here are the process steps to get billets/trunks to end products.
• Cut the trunk pieces in the plantation
• Load them on the trailer (60 billets to the trailer) so 5 trailer loads per hour every hour. (probably need 10 tractors and drivers minimum just for this don’t forget the time to drive out to the current harvesting area and back, and queuing time))
• Transfer the billets to the loading system.
• Run the billets through the veneering unit to initially get the outer trunk material.
• Divert the outer trunk material to a dryer
• Transfer outer trunk material to the chipper
• Transfer the chipped material to a crate/bag
• Adjust veneering unit to produce the inner material veneer sheet
• Transfer this material to a dryer
• Remove from the dryer and trim and round up and stack the finished veneer
• Package the veneer for transport

All this needs to be done every TWELVE SECONDS for each billet.

4 million revenue might be enough to make this work, BUT I think they are going to use more than one machine so maybe I need to double the times if two machnes are used but it also increasing the labour cost as well……

BUT compare the 300 billets per hour with the Beta machine production rate (whatever it really is)- that is producing at around a 1000 billets every QUARTER which is about 2 (TWO!!) billets per hour and you get an idea how difficult the step up is going to be.

As I said this material is just a thought-starter…. I really need to stop doing this and get a life, as I don’t hold PPY any more!! ?