Both wood processing companies have been in operation since the early 2000's and have access to large, sustainable quality sources of raw materials for wood pellet manufacturing. The initial proposed combined capacities for the joint venture wood pellet plants are scheduled for 400,000 MT per year. PHI Group intends to own a minimum of 51% equity interest in each the contemplated joint venture enterprises.
The demand for wood pellets is primarily in Europe, Japan and Korea where carbon-reduction requirements are driving power utilities - particularly coal-fired power plants - to mix more wood pellets into their fuel supply. Under current targets, many European countries will be required to generate 35% or more of their electrical power from renewable sources by 2020. Western European demand for wood pellets is expected to triple by that time.
Henry Fahman, Chairman and CEO of PHI Group, Inc., said, "We are pleased to cooperate with the wood processing companies in Vietnam and their management team, both of which have a long history of operational, marketing and technical excellence. We believe the combined strengths of our joint ventures will create superior added value for all the shareholders and stakeholders."
