/NOT FOR DISTRIBUTION IN THE UNITED STATES/
VANCOUVER, June 27, 2018 /CNW/ - Pinnacle Renewable Holdings Inc. ("Pinnacle" or the "Company") (TSX: PL) today announced that it has entered into two new long-term, take-or-pay off-take contracts with customers in South Korea and Japan. The contract in South Korea is with CGN Daesan Power Co., Ltd. ("Daesan"), a subsidiary of CGN New Energy Holdings Co., Ltd, a diversified independent power producer in Asia. The contract in Japan is Pinnacle's second with Toyota Tsusho Corporation ("Toyota Tsusho"), a trading and investing company and a group member of TOYOTA. As a result of these two new contracts, the weighted average remaining life of Pinnacle's portfolio of off-take contracts with customers has been extended from seven years as at March 30, 2018, to more than nine years.
Under the terms of the Daesan contract, Pinnacle will supply 315,000 metric tons per annum of industrial wood pellets to Daesan beginning in 2021. The industrial wood pellets will be used in a biomass power generation plant in South Korea.
"Entering into this long-term relationship with Daesan is an important milestone for Pinnacle as it represents our first long-term contract in South Korea and our largest contract to date in Asia, thereby further establishing our strategic position in the Pacific Rim," said Robert McCurdy, Chief Executive Officer of Pinnacle. "Being the first long-term industrial wood pellet contract to ever be signed in South Korea, this new agreement attests to the country's growing commitment to decarbonization."
In South Korea, the Renewable Portfolio Standard policy aims to increase the share of energy generated from renewable sources to 10% by 2023. According to Hawkins Wright, a leading provider of market intelligence and analytical services to the international pulp, paper and biomass industries, biomass demand growth has been the strongest in South Korea over the past five years, where industrial pellet consumption increased by a compound annual growth rate of more than 58% between 2013-2017, reaching 2.5 million metric tons.
Under the terms of the Toyota Tsusho contract, Pinnacle will supply 170,000 metric tons per annum of industrial wood pellets to Toyota Tsusho beginning in 2021. The industrial wood pellets will be used by Kanda Biomass Energy K.K., which is established by RENOVA, Inc., Sumitomo Forestry Co., Ltd., Veolia Japan K.K. and two other companies, in a biomass power generation plant in Kanda, Fukuoka Prefecture, Japan.
"We are pleased to enter into our second long-term supply agreement with Toyota Tsusho, and our fifth new contract overall in Japan this year," continued Robert McCurdy, Chief Executive Officer of Pinnacle. "Our growing contract backlog in Japan underlines both the increasing adoption of biomass and the strength of our competitive position in this market."
In line with the rapid growth in Pinnacle's contracted backlog, the Company continues to evaluate and develop opportunities to add incremental production capacity.
Pinnacle is a rapidly growing industrial wood pellet manufacturer and distributor and the third largest producer in the world. The Company produces renewable fuel for electricity generation in the form of industrial wood pellets, which are used by global utilities and large-scale power generators to produce renewable and reliable baseload power. Pinnacle is a trusted supplier to its customers, who require reliable, high quality fuel supply to maximize utilization of their facilities. Pinnacle takes pride in its industry leading safety practices. The Company operates seven industrial wood pellet production facilities in western Canada, a port terminal in Prince Rupert, B.C., and currently has a new production facility under construction in Smithers, B.C. Pinnacle has entered into long-term take-or-pay contracts with utilities in the U.K., Europe and Asia that represent 109% of its production capacity through 2021 and nearly 101% of its production capacity through 2026.
This news release may contain "forward-looking information" within the meaning of applicable securities laws in Canada. Forward-looking information may relate to Pinnacle's future financial outlook and anticipated events or results and may include information regarding its financial position, business strategy, growth strategies, budgets, operations, financial results, taxes, dividend policy, plans and objectives. Particularly, information regarding the Company's expectations of future results, performance, achievements, prospects or opportunities or the markets in which it operates is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "budget", "scheduled", "estimates", "outlook", "forecasts", "projection", "prospects", "strategy", "intends", "anticipates", "does not anticipate", "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will", "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events or circumstances. If any of the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those expressed in the forward-looking information. The Company has no obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws in Canada. Actual results and the timing of events may differ materially from those anticipated in the forward-looking information as a result of various factors, including those described in "Risk Factors" which are described in the Company's Annual Information Form ("AIF") filed March 27, 2018 on SEDAR.
We caution that the list of risk factors and uncertainties is not exhaustive and other factors could also adversely affect our results. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. See "Forward-looking Information" and "Risk Factors" in the Company's AIF and Management's Discussion & Analysis for the fiscal year ended December 29, 2017 available on SEDAR (www.sedar.com) for a discussion of the uncertainties, risks and assumptions associated with these statements.
SOURCE Pinnacle Renewable Holdings Inc.