Olam International Ltd., a commodity supplier backed by Singapore’s Temasek Holdings Pte, may enter the carbon credits market based on the acquisition of a timber project in the republics of Congo and Gabon.
The company will review building a power plant fueled by biomass and ways to restore degraded forest areas at the tt Timber International AG operations it agreed to buy this week, Robert Hunink, Olam’s global head of wood products business, said today on a conference call. The power plant may cost about 12 million euros ($16 million) and save burning 3 million liters of diesel, he said.
“The carbon potential is certainly something that we will be looking at seriously over the coming years,” Hunink said. Olam will partner with a company that has a “proven track record” in carbon credits in this, he said.
Olam’s 30 million-euro purchase of tt Timber, announced yesterday, will expand the Singapore-based company’s timber business in Africa to 2.3 million hectares of hardwood and an output volume in excess of 500,000 tons of tropical lumber a year. The deal, due to close in mid-January, will make Olam one of the world’s biggest certified hardwood suppliers, according to the company, and improve client access in Europe, the U.S., north Africa and the Middle East.
Carbon credits may also help to offset what is currently “probably the all-time low” in wood prices, Chief Executive Officer Sunny Verghese said on the conference call. “We see it as a major opportunity and will be working towards it,” he said, referring to the carbon credit market.
