Wood recycling

A transforming marketplace

David LeeGroup Operations Director

Hadfield & UKWR – Who are we?• 30+ years experience• Agricultural background• Leading UK wood recycling business

– Producer of leading animal bedding brands– Significant tonnages to panelboard mills– Leading provider of waste wood for UK WID wood biomass stations

• Approaching 100 k tonnes processed pa

– Export– Plus several other sustainable products

• Total of 250k tonnes in 2010/11 • 3 sites main sites

– Manchester, Middlesbrough, Tilbury

Manchester

Middlesborough

Tilbury

Wood waste basics

Post consumer (household

collections, civic amenity sites)

Sources

Commercial & Industrial

Construction & Demolition

Collection & Processing

Panel board Manufacturing

Bio energy

Animal bedding

Compost & Mulches

Other applications (filter material etc)

Applications

Market fundamentals

Source

Originator

Collector

Processor

Consumer

Supply Chain

Gate fee+

price etc

=

Processing fee+

Haulage+

Margin

Economics

Panel board (using recycled wood)

Biomass in operation

Biomass in construction

Biomass – Gaia Power

Biomass in development

Supply & demand locations

• Supply is based around population

• Existing demand is largely northern

• The south east has large generation and limited consumption

Waste wood volumes

• General consensus is that approx 5m tns of wood waste is generated in the UK per annum

• Only 2.1m tns had a “home” in 2008.

• For “landfill” read “somewhere else”

From slide by Poyry

Question is how much will be accessible?

Where does waste wood currently go?

The volumes going into the unknown end uses are large but it is almost impossible to determine how

much goes where

Markets - Panelboard

• Pan European over capacity– Can 100% of UK industry survive?

• Regional bias– Majority of capacity is in NW England, NE England and

Scotland

• Quality requirements– Panelboard feed stock is typically more solid wood than panel products

Markets - Biomass• Existing UK WID facilities

– 500k tonnes

• Mainland European demand– Swedish, German and Dutch supply from UK

• New UK Non WID facilities– RHI and public build schemes – New waste wood pelletising plants have been recently opened

• New UK WID facilities– Huge number in planning– Feedstock only exists for approx 750k - 1m tonnes pa

• then cannibalisation

Markets - Animal bedding & mulches

• High growth in animal bedding in mid 2000s– Lots of new entrants in 2008/09

• Demand influencers– economic conditions– seasonality– availability of alternatives (straw, shavings etc)

• Pricing is determined by alternatives– rather than the wood market place

Industry players• Traditional

– Aggregators & processors• SMEs

– Brokers• Small numbers

– Hauliers• Several but AW Jenkinson

dominant

– Consumers• Panel board• Animal bedding• Limited UK biomass

• Today– Aggregators & processors

• LWMC and SMEs

– Brokers• New entrants from UK & Europe

– Hauliers• Expansion of both number and scale

– Consumers• Panel board• Animal bedding declining• Export biomass growth• UK biomass stable

– Rapid growth in 2012

An industry in flux

Wood waste in the NE of England• Significant demand for material

– Sembcorp Wilton– Eon Lockerbie– Egger Hewham– Dalkia Chilton– RWE Markinch?

• Impact on gate fees as demand comes on line?

A sellers market - key decision criteria

• Duty of care

• Recycling vs recovery

• Costs (gate fees and haulage costs)

Questions?

David LeeGroup Operations DirectorHadfield Wood RecyclersUK Wood Recycling Ltd

Mobile - 07973 633829Office - 0161 3702360Email - david.lee@hadfield.co.uk     www.hadfield.co.ukwww.ukwoodrecycling.co.uk