US claim angers forest firm

A forestry company is considering legal action after an American corporation incorrectly claimed to have secured a $1 billion deal to obtain New Zealand wood fibre.

Sea 2 Sky Corporation of Washington announced it had signed a contract with Mt Maunganui company Des Wilson Forestry worth US$757 million over 15 years.

Sea 2 Sky claimed that the forestry company would supply it with 250,000 tonnes of wood fibre over the first two years, increasing to 500,000 tonnes a year for the remainder of the contract.

But owner Des Wilson told the Weekend Herald that no such agreement existed.

Mr Wilson said he signed a document which said his company would locate potential sources of fibre in New Zealand that could be used for wood pellet manufacturing.

"All we said was that we would endeavour to find such material. There was no value, there was no volume on that document."

He believed the company might have overstated the significance of the contract in order to boost its share value.

Sea 2 Sky is a newly created renewable bio-energy company. Established in April, it uses a high-heat process to convert wood and fibre into a environmentally friendly alternative to coal.

It said it would turn New Zealand wood fibre into a "coal-like product" with about 70 per cent of its initial weight and 90 per cent of the original energy content, but without the fossil-fuel carbon emissions of coal.

The US$757 million figure was based on a the current wood fibre market price of US$233 a dry tonne.

Sea 2 Sky is based in Ferndale, Washington, near the heartland of America's forestry industry. Company director David Siebenga said that the multibillion-dollar demand for its product from Europe and Asia meant the corporation was looking beyond American forests for suppliers.

He said the company had rapidly expanded its presence in the wood pellet market through the agreement with Don Wilson Forestry.

"[We] have achieved a historic milestone of opening up new markets in the forest industry by harnessing strong international sources of supply in stable democratic states that we can now market."

But Mr Wilson said the misleading claims by the company had made him consider legal action. "My association with these people is absolutely zip."

Mr Wilson, who lives in Papamoa, also controls Taumaranui Saw Milling Ltd.