Agribusiness and Trade: Raw logs to high-value bioproducts

Wayne Mulligan. Photo / Supplied

Next month Wellington entrepreneur Wayne Mulligan heads overseas on a capital-raising trip that will define his bold bio-forestry plans for this country.

With Taiwanese and Singaporean partners, Mulligan — the chief executive of NZ Bio Forestry — wants to transform tree plantation biomass into biofuels, biochemicals, bioplastics and other innovative materials that can dramatically reduce the need for fossil fuels and lower carbon emissions.

“New Zealand is really good at growing pine trees but no so good at turning them into high-value exports,” says Mulligan. “About 36 million cubic metres of timber is harvested each year and 22cu m gets exported without any added value, with prices going south. Log prices have fallen 21 per cent over the past 18 months.

“We want to utilise the whole resource of the tree — raw logs, thinnings and other forestry waste, fibre and sugars — and help foresters get a better deal with value-added products.”

NZ Bio Forestry, established in 2018, has conducted trials, by peeling 42 tonnes of pinus radiata logs into decorative plywood and veneer at a Malaysian facility, and in Taiwan converting 30 tonnes of dry chipped pine into a chemical platform.

Mulligan, who has a Master of Management from Auckland University, says “we have spent five years on refining and understanding the chemical properties based on sugars to build a chemical platform”.

“We have the yield, data and analytics, and the intellectual property for biochemistry and bioengineering.

“Our technology (developed in Taiwan) has been validated. We want to take advantage of the global shift to renewables and create a new value chain.”

Now, Mulligan is on a mission to scale up his business and attract investment. He will be making presentations to potential investors in Asia, Japan, Abu Dhabi and the US, as well as talking with potential customers, particularly those who want to get out of using coal within three to four years.

NZ Bio Forestry has a memorandum of understanding (MoU) with Japanese biochemicals company Refine Holdings to develop organic solvents from pinus radiata for the automotive industry including use in electric vehicle batteries.

The Taiwanese partners are designing biochemical adhesives for the micro-processing and semi-conductor markets to keep mobile phones, laptops and desktop computers together. The decorative plywood for cabinet making, wall panelling and furniture can be produced out of Malaysia.

NZ Bio Forestry has been talking with a leading New Zealand electricity generator about producing high energy bio-pellets to replace coal and reduce carbon gas emissions.

Mulligan’s ultimate goal is to establish a fully-integrated bio forestry refining plant in central North Island. Reaching the plant’s full potential would need an investment in the vicinity of $400m.

“We can stage it over five to 10 years,” says Mulligan. “We can have the chipping system for (solid) bio-pellets up and running within two years. We can build the decorative plywood facility and the first phase of chemicals refining.”

NZ Bio Forestry has MoUs with local forest owners for pinus radiata supply, including Maori entities such as Tupu Angitu, the commercial arm of Lake Taupo Forest Trust.

Mulligan has had discussions with innovative Kiwi companies and organisations such as Scion about creating a bio-forestry hub.

NZ Bio Forestry has teamed up with Taiwanese Kai Hsuan Lin who has been involved with the timber industry for more than 22 years, and Singaporean Swee Yin Lee, an investment director.

Kai has a BSc in Applied Mathematics from the University of California and MSc in Forestry Specialised Systems from Texas A&M University. He founded several biotechnology companies and developed an integrated timber concept for bio-materials including drying and adhesive systems.

Swee had a 30-year career in the food industry with McDonald’s Singapore, managing operations and the supply chain, and over the past 20 years has been a director of Artal Asia, a Belgium family investment fund with more than US$8 billion invested worldwide.

They are joined by applied scientist Dr Kam Yin Fah as a director of NZ Bio Forestry. He has a BSc and PhD in Polymer Science and Technology from North London University, and during his professional career was an Associate Member of the Malaysian Institute of Chemistry, Chartered Chemist of the UK Royal Society of Chemistry, and a Member of the American Association of Clinical Chemistry.

NZ Bio Forestry has developed a system where tree trimmings, slash and other waste, usually discarded, are chipped and turned into energy wood pellets. The forest residue is also dried, ground into fine particles and pressure-heated to break down the wood structure.

Enzymes are added to further break down the wood cells into sugars such as glucose and xylose.

The wood-based sugars undergo two further treatments — with one turning the sugar into alcohol for (liquid) biofuel, and the other creating lactic and then polylactic acid which forms the basis for products such disinfectants, cosmetics and polymer feedstocks that replace petrochemicals and plastics.

“From the pine trees and forestry byproducts, we can develop a full suite of industrial and consumer products, and feedstock. We have swapped fossil fuels with plantation biomass, and reduced the greenhouse gas liability,” says Mulligan.

“The goal is to increase the value of the forestry estate, utilise the whole tree to generate better returns and create new career paths, all with an approach rooted in Maori culture.”

Developing biofuel in NZ

Since the early 2000s, Crown Research Institute Scion has been researching and developing a biofuel made from forestry waste and has come up with a briquette that can be used in traditional coal boilers.

The high-density briquette is larger than other bio-pellets found on the market and does not fall straight through the ash grate at the bottom of the boiler. Scion is continuing to determine the best geometry and shape of the briquette.

The briquette has achieved a density of 550 kilograms per cubic metre with a durability greater than 91 per cent, qualifying as a coal replacement for medium/low process heat supply. Thermal coal’s average bulk density is 700-800kg per cu m.

In its largest trial to date, Scion is providing the Museum of Transport and Technology in Auckland with 250kg of the briquettes to run one of its trams for a day.

Scion says a renewable energy source such as biofuel is essential for New Zealand to meet its global climate change commitments. Scion is inviting companies to commercialise its solid biofuel product.

Forestry may hold the solution for providing coal burners with a clean and renewable source of energy. Last year New Zealand burned more two million tonnes of coal, largely for energy transformation, industrial production and manufacturing, and commercial heating.

Each year, around three million green tonnes of wood residue — bark, branches and low-quality stems — remain in the country’s forests after commercial harvesting.