tim welcomes heywood pulp mill planning project

Very interesting ASX Announcement refer following article by TIM

Timbercorp Limited ABN 87 055 185 067
ASX Announcement

TIMBERCORP WELCOMES HEYWOOD PULP MILL PLANNING PROJECT
Melbourne, 21 December 2004:
Leading agribusiness investment manager, Timbercorp Limited (ASX:TIM) is delighted to announce its participation in a team drawn together by Infrastructure Project Group (IPG) to commence the planning for a CTMP (chemi-thermomechanical) pulp mill to be located in Heywood in Victoria to add further value to the eucalypt plantations growing in the area.

If the pulp mill project proceeds, Timbercorp expects to supply its growers’ wood fibre under a long term contract at market prices. Timbercorp does not expect to contribute to the cost of the pulp mill nor participate in its management.

For further information about the Company visit timbercorp.com.au or call John Vaughan, Executive Director, Operations (03) 8615 1200.

About Timbercorp Limited (ASX:TIM):

Timbercorp (AFSL:246924) creates wealth through high quality agricultural projects developed on a world scale to meet global demand. With fully integrated operations, Timbercorp actively manages the entire agricultural project cycle on behalf of its grower investors. This encompasses the establishment, financing and marketing of projects through to harvesting, processing and end-sales.

Since establishment in 1992, Timbercorp has raised more than $675 million from sales of projects in forestry and horticulture to investors seeking long-term income streams and attractive after-tax returns. The company’s portfolio of managed agribusiness assets consists of 79,660 hectares of eucalypt plantations, 2,777 hectares of olive groves, 3,691 hectares of almond orchards, 450 hectares of wine grape vineyards, 355 hectares of citrus orchards and 161 hectares of table grape vineyards. With net assets of $365 million, Timbercorp generates a mix of strong recurrent revenue streams.

About the Heywood Pulp Mill Planning Project

CTMP stands for Chemi-thermomechanical pulp and refers to the pulping process. The process is noted for its high yield and is considered to be more environmentally acceptable than a chemical kraft pulp mill.

CTMP is used to manufacture soft and absorbent tissue, box board (high quality packaging such as perfume boxes, take-away food boxes, shoeboxes etc) and coated fine paper (such as glossy magazines and brochures) amongst other things.

Australia currently imports most of the pulp used to manufacture these products from Brazil (eucalyptus) and Indonesia (mixed tropical rainforest).

Eucalyptus CTMP is the highest grade of this type of pulp and is in short supply worldwide.

IPG holds expressions of interest from a major international pulp and paper company to take all of the pulp produced by this mill. IPG is finalising a Memorandum of Understanding with Timbercorp to supply the total wood fibre required by the proposed mill.

The mill will produce 350,000 air-dried tonnes of pulp per annum from approx 750,000 green tonnes of wood. The wood will come from the local plantations and most likely be harvested and processed using “in field ” techniques perfected by Timbercorp.

The cost of the mill will be about $400 million. The planning stage, which will include an approval process and detailed engineering, will cost about $15 million.

The proposed timeframe is;
• 1st year (2005) – Environmental Approval and design
• 2nd and 3rd year (2006/7) – construction and commissioning

The key technical drivers for the project will be:
• Wood supply – 750,000 tpa
• Power supply – 120 MW
• Chemicals – sodium hydroxide and hydrogen peroxide
• Water supply and effluent treatment – 3.5GLpa
• Site requirements ~ 50 hectares.

The mill will be environmentally benign using mechanical grinding and treatment with sodium hydroxide to break apart the wood fibres and hydrogen peroxide as the whitening agent. Water requirements will be approx 3.5GL pa within the mill and, after biological treatment, used for local irrigation or where possible recycled through the mill.

It is expected the construction phase will employ some 600 people and 40-50 permanent staff to operate the mill. Further employment of several hundred will be required in mill maintenance, supply logistics, services, forest management, harvesting and haulage.

Earlier this month IPG received approval from the Queensland Government for the development of a 400,000 tonnes per annum coated fine paper mill which will cost about $1.2 billion.

IPG Director Sam Winston Smith commented on the company’s intention to follow the model which had proved so successful for the paper mill project. “We believe that the project must have the wholesome support of the local community. The pulp and paper industry is a demanding environment and IPG recognises the importance of engaging the community to ensure all possible impacts are identified and dealt with in open consultation. The people of Ipswich, where the paper mill is to be sited, are today, the paper mills greatest supporters” said Mr Winston Smith.

Mr Winston Smith said his company looked forward to the challenges ahead and working closely with the local community, Glenelg Shire Council and the relevant state bodies.

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