Tanac to build $60m wood pellet mill in Brazil

Tanac S.A. is building a 400,000 tonne per year, $60 million (€48 million) wood pellet manufacturing plant at its Rio Grande port site in the south of Brazil.

Construction began in October and is scheduled for completion at the beginning of 2016. The first pellets are due for export in mid-2016. Under a long-term agreement, Tanac will supply its wood pellets to Drax Power.

Tanac says the move to wood pellet production is a natural step. Its primary product is vegetable tannin, a product mainly utilised by the leather industry and in wastewater treatment. Tannin is extracted from the bark of 'Black Acacia' or 'Black Wattle'. After removing the bark, the remaining wood is chipped at Tanac's woodchip mill and a proportion of these woodchips will now provide the feedstock for the new pellet plant.

All of Tanac's own plantations are FSC Forest Management certified and local sourcing operations all carry FSC Controlled Wood certification. As part of the Drax agreement, an independent carbon stock assessment must be conducted on the plantation area in the Rio Grande do Sul State every two years to ensure carbon stock levels are being maintained.

The pellet plant is strategically located in the southern part of Brazil and will be the largest plant in Latin America.