One of Australia’s largest timber recycling operations will proceed after Timberbiz reported that Mount Gambier Biomass—the new business that acquired assets from fallen Atlus Renewables—will proceed with plans to build a $120m plant in the Green Triangle.
As reported by Wood Central last year, the now-defunct Atlus Renewables used pine sawdust from forest plantations to make pellets, supplying the product as a complementary fuel source for power stations.
At its peak, the new plant will produce 300,000 tonnes of industrial pellets each year, generating more than $64 million for the local economy. In addition, the mill will use FSC and Responsible Wood-certified logs and residues from nearby plantations and sawmills.
Wood Central understands that the council previously entered an agreement with Altus Renewables; however, the project was shelved after Atlus Renewables entered liquidation. Earlier this year, Albioma and the council purchased Altus Renewables and were informed that the project would proceed.
Mayor Kylie Boston said although the initial project received public backlash, it had since eased off. “I guess there are a few phone calls when we have something on the agenda, but those decisions have to come through council,” Ms Boston said, adding that “those approvals are done with the state government, and we see it once it comes through, and then it has to be administered.”
Atlus Renewables cost squeeze
Last year, Wood Central reported that the fallen Atlus Renewables went to market looking for investment to drive its expansion. Despite rising revenues, raw material costs allegedly ate into its profitability, creating an input squeeze.
According to the Australian Financial Review, its accounts indicate a raw costs squeeze, showing the company lost $3.48 million in 2022 compared with a profit of $582,000 a year earlier. And whilst revenues increased by 24% to $14.14 million in the year, its raw materials rose substantially by 43.8% to $5.2 million.
At the same time, Atlus Renewables accounts blamed “losses and delays in upgrade works at its plant” and “investment spending to expand its Green Triangle Project.”
Foreign exchange rate fluctuation has also been blamed for poor financial performance. “The upgrade was implemented in stages,” the accounts said, “intended to allow the plant to operate at increasingly higher production levels using the newly installed equipment.”
- To learn more about the fall of Atlus Renewables, click on Wood Central’s special feature.