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Business update

Posted in: by Alex Robinson on 23 March 2017

New market opportunities for miscanthus are gaining pace, and increased demand means more planting is needed.

To support this growth, we're announcing changes to the grower contracts.

Since this time last year, we have moved away from processing pellets for power generation, to supplying whole bale power stations and one of the main outlets is the renewable energy plant in Brigg, North Lincolnshire.

While a low moisture content is still key - with our stipulation that the moisture content is below 16% - there are new areas of focus for bale specifications that must be adhered to, or growers may face rejections. We're also now directly managing our hauliers, and both factors mean that that the contract has had to be amended.

Contract updates

The most significant amendment we've made to the contracts is extending the payment terms to 75 days. This has been because of the changes to our dates receiving funds, and the fact we now manage and pay the hauliers directly.

Secondly, there is now a much greater incentive for growers to store their miscanthus longer. We're offering up to an extra £4 per tonne for miscanthus stored into the following year, whether it be indoors or covered outside. However, any grower that selects tomovetheir bales before cereal harvest will now be penalised.

This is because we're now delivering to markets throughout the year, rather than trying to collect and processall bales within a six to eight-month window.

To summarise the contract amendments:

  • RPIX increase for 2017/18 @ 1.87%
  • Newly delivered contract base rate for long-term contracts - £75
  • Collection month preference will reward for longer term storage

Payment information

Please ensure that you notify Terravesta if any of your accounts or details have changed in the last year, by completing and returning the 'self-billing agreement' form that has been sent to all growers.

Operational updates

We've amended the bale specification within our grower contracts to reflect the whole-bale power station requirements. This includes minimal adjustments to bale size, string requirements and weight assumptions. We've also reduced the moisture penalties significantly.

Terravesta bale specifications

Large Hesston

Bale height

(mm)

1220 -1320

Bale width

(mm)

1150 - 1250

Bale length

(mm)

2250 - 2650

Bale weight

(kg)

525 - 650

Density

(kg/m)3

125 - 143

The bale structure, shape and size is now more important due to the handling process. Last year we had issues with broken strings and bale integrity, so growers should ensure that any broken strings are replaced before collection.It's been a learning curve because the new requirements differ from a pelleting facility. Before last May, a bale could have been rejected for being over 16% moisture content (MC) with potential additional haulage charges for its return. But now, the moisture readings are taken as an average of 12 bales, tested by a crane with microwave sensors.

Due to the nature of the annual delivery profile into Brigg, we can no longer prioritise the collection of bales stored outside. The new declaration process will allow growers to select the month they would liketheir bales collecting, and depending on how long they can be stored for, growers will be penalised or rewarded with a price per tonne.

Market updates

We're always working to develop more regionalised markets across the UK including:

  • Whole bale commercial heat and power
  • Equine and poultry bedding
  • Seasonal domestic fuel: fire logs, BBQ fuel and natural firelighters, which will be launched this summer at The Three Counties Show in Worcestershire

Science update

As the 'MUST' (Miscanthus Upscaling Technologies) project moves into its second year, trialing the growth and breeding new seed-based miscanthus varieties, we're pleased to announce that we've been successful in the application for another project. Funded by the EU and a collaboration of over 20 European companies, 'GRACE' will be a five-year project, looking at growing advanced industrial crops on marginal land for bio-refineries. We'll be managing the planting of all the miscanthus area within this project.

We hope to have a seed based hybrid variety ready for commercial deployment within the next two to three years. The seed based plants will be planted as plugs, and are the most vigorous varieties we've seen, with some offering viable harvests after one year.

Declaration process

The process is much the same as last year although growers willgo onto the website and enter their individual grower code, rather than receiving the declaration link via email.

A final notable difference: rather than declaring each stack separately, growers will need toentertheir bale numbers and details in one form, but there's still an option to note and define separate stacks if necessary.

To complete your harvest declaration, please visit:

www.terravesta.com/declaration

Green Shoots growers

It was great to put faces to names at the Green Shoots grower meeting at Monk Fryston Hall, and we'd like to thank everyone that came along.

However, we urgently need all Green Shoots growers, except those who have moved onto a Terravesta contract, to complete a self-billing agreement so that we have the correct information to pay you.

If you have any questions about any of the changes outlined in this update please get in touch: alexr@terravesta.com

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Calling all growers

Miscanthus has a great future in the UK as an energy crop. There is one company which understands and can work with growers, can process the crop to produce sustainable. high quality fuel and energy and can sell those products to end users. Terravesta is that company.

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