Biomass export plant for Coega

1 February 2007

The Coega Industrial Development Zone outside Port Elizabeth has secured a R70-million investment into a biomass fuel project which will supply 10 000 tons of the product per month to European markets.

The plant will be one of the largest among the 285 operations of this product globally, the Coega Development Corporation said in a statement on Wednesday.

Eastern Cape Biomass Fuel Pellets CEO Willie Claassen said the company had already secured off-take agreements with Nordic countries, where the entire product will be exported to. Production is scheduled to commence in August, with the first product due for export in November.

According to the company, about 100 jobs will be created during construction of the plant, which is currently under way, while an additional 60 direct jobs and about 3 000 indirect jobs “in backward linkages to Eastern Cape rural areas” will be created. A transport company that will move the material between the sources of supply, the factory and the harbour will employ a further 40 people.

Biomass is an environmentally friendly alternative source of energy used to fire power stations and also used in private homes in Europe. A total of 285 plants around the world produce a combined four million tons of biomass pellets a year.

The Coega plant will use forest residue, sawmill waste and alien vegetation from the Eastern Cape and part of the Southern Cape as well as some of the scrap wood from the government’s Working for Water programme.

Eastern Cape Biomass chose the Coega IDZ as the location for its plant because of the coastal position and the fact that the Eastern Cape is a source of the raw materials used in processing the pellets.

Jobs where they’re most needed
“The aspect of creating jobs where they are most needed, and the opportunity to design and build a plant from scratch without the constraints of legacy, also counted in the favour of the Coega IDZ,” Claassen said.

The company said it has set aside about 5% of ownership for its workers and another 5% for rural communities that have been roped in to provide the raw materials. The Industrial Development Corporation has 10% equity, with a 30% stake still under negotiation for a black economic empowerment partnership.

The Coega Development Corporation (CDC) said it remained on track to achieve its target of signing 10 investors by the end of March. The biomass project is the fourth investor to be announced by the CDC after Cerebos, Dynamic Commodities and Alcan in 2006.

“Although four other investors who have signed agreements with the CDC to locate their investments in the Coega IDZ have still not been announced, due to investor confidentiality agreements, the biomass investment brings the total number of investment projects signed to eight against the set target of 10,” the CDC said. reporter

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