Tag Archives: press-releases
Viaspace Inks 25yr Biomass PPA
[background=rgb(0, 128, 1) !important]03/07/2013[/background] Viaspace has clinched a 25-year power purchase agreement with Tibbar Energy for the output of its planned Giant King Grass biomass project in the Virgin Islands. The deal was approved by the Virgin Islands Water and Power Authority Governing Board and will see Tibbar sell the utility 7MW of base load power from the anaerobic digestion facility on St Croix. Tibbar chief executive Tania Tomyn said: “We look forward to supplying renewable energy at a lower cost to the people and businesses of St Croix.” Tibbar will grow Giant King Grass, a non-invasive, USDA-approved agricultural energy crop on 1500 acres then feed it into the facility to create biogas, which is fed into generators. The project will be built and generating power by June 2015, as required by the PPA with WAPA, Tomyn added. Tibbar Energy is working with Layne Heavy Civil, one of North America’s largest waste water treatment engineering, construction and procurement contractors. Viaspace chief executive Dr Carl Kukkonen said: “Our congratulations go to Tibbar. You hear a lot about solar and wind energy and they have a significant role to play. But solar and wind are intermittent energy and can only play a marginal role because there is no way to store electricity on a large scale. Tibbar’s project is base load power and integral to the islands grid.” Image: the plant will create biogas using Giant King Grass (Viaspace) Continue reading
Investing In Agriculture – July 2013
Published by Investment Adviser | Jul 01, 2013 The term agriculture usually brings to mind crop prices and the effects of drought or flooding on harvests, but the sector is more diverse than many realise, and weather is not the main driver of investment trends. Instead, the biggest effect on agriculture investing is the improving living standards and changing food habits of the populations of emerging and developing countries. Jake Robbins, manager of the Premier Global Alpha Growth fund, says: “As people become wealthier they are shifting their diet from basic crops, such as rice and potatoes, and eating a lot of meat. So as the demand for meat rises the demand for crops rises almost exponentially. “That is the biggest driver. We saw in 2007-08 that when supply cannot meet demand, you get huge spikes in the price of crops and meat.” Skye Macpherson, portfolio manager, global resources at First State Investments, agrees that this trend is leading to increased demand for many agricultural commodities such as dairy, sugar and meat. She adds: “Interestingly, higher meat consumption is having a multiplier impact on grain demand as animals are quite inefficient converters of grain. Impacting the listed agricultural equities is ongoing M&A in the sector, as unique and high-quality assets are being consolidated. “Most recently we saw activity in the Australian grain-handling industry with ADM bidding for GrainCorp, and in the US pork production sector, Shuanghui International bidding for Smithfield Foods. The sector is also growing, with numerous IPOs and capital raisings taking place in the past 12 months.” Mr Robbins adds that M&A activity has also been seen in Brazil and Norway, highlighting the fact that industry players value these businesses higher than the market does. This is because both the input cost for the grain to feed the chickens and the price you sell the end product for can fluctuate widely. “So it is difficult to predict what earnings will be in a quarter or any given year, so while the long-term trends are very positive because the short-term earnings are very unpredictable, the stockmarket doesn’t like that and so tends to value them quite lowly.” But while changing food habits is one trend, food supply in general and the effect of freak weather remains a factor in the sector, with crops one of the most popular investments. Mr Robbins notes the ‘blue-chip’ option in this area is Monsanto, which develops genetically modified seeds to increase crop yield. “The only problem is we look at stocks for growth, quality and value, and it has got loads of growth and quality but it always looks very expensive, so we haven’t managed to buy that yet.” Instead, as a cheaper way to get exposure he highlights Bayer, a German pharmaceutical company with a division focused on crop sciences that has been growing very quickly. Mr Robbins adds: “Last year was very poor in terms of the harvest, particularly in America as they had a huge drought and a lot of corn was ruined. So currently corn inventories globally are very low. It will take several years of good harvests to rebuild those inventory levels… so we do like corn and any exposure is positive.” Ms Macpherson adds that from a valuation perspective, it has been a volatile 12 months for the sector, but one that has created opportunities. “A significant drought in the US saw soft commodity prices like corn, wheat and soy skyrocketing in the middle of 2012, only to sell off towards the end of the year and into 2013 on expectations that both South America and the US would harvest large crops.” However, Desmond Cheung, co-manager of the BGF World Agriculture fund, warns that investors can get very fixated on crop price developments when a lot of sentiment is already factored in improved supply and lower prices. “Investors should not really be taking the view that the market does not understand the supply improvement. In the past two to three years we feel people look at crop prices as a gauge on whether or not this sector is attractive, but it actually misses out a big part of the investment universe. “We think there is a lot of exciting medium-term development, especially in downstream and midstream firms that would offset some of those firms investors would have in the upstream sectors.” When looking at agriculture, it’s clear there are opportunities globally and with increased M&A action, investors need to take a look at the wider picture instead of only focusing on crop prices. Nyree Stewart is deputy features editor at Investment Adviser Continue reading
Little Progress Made On Defined Benefit Pension Deficits
http://www.ft.com/cms/s/0/1efb8178-dbef-11e2-8853-00144feab7de.html#ixzz2XEbfdZZ1 By Josephine Cumbo The UK’s biggest companies have made little progress in cutting pension deficits, prompting calls for them to find new ways of reducing scheme liabilities. Research by PwC, the professional services group, found that FTSE 350 companies’ ability to support their defined benefit, or final salary, pension scheme promises remained far below that of 2007, before the recession. A PwC index, which tracks the overall level of support provided to defined benefit schemes out of a possible score of 100, now stood at 75, only a one-point improvement since June 2012. The current level of 75 was well below the 88 achieved pre-recession, said PwC. If a level of more than 90 is achieved over the longer term, this would indicate that companies’ legacy defined benefit pension issues were under more control. “Companies sponsoring DB pension schemes need to work harder to find returns in this new economic environment,” said Jeremy May, pensions partner at PwC. “This includes looking to non-traditional asset classes to achieve the required return, while meeting the schemes’ cash requirements over an appropriate timeframe. “Companies also need to be prepared to explore a wider range of ideas, such as longevity hedging, asset swapping and cash flow buy-ins to meet the schemes’ needs.” Pension scheme sponsors were not making the most of the flexibility in assessing funding status and setting recovery plans, “meaning that often too much money is tied up in overly prudent assessments of deficits”, added PwC. The analysis comes two months after the Pension Protection Fund gave its clearest signal yet to trustees to take a more lenient approach with companies struggling to plug their deficits. In its annual guidance, the PPF, which pays the pensions of defined benefit scheme members when their employer has gone bust, said that, where there are significant affordability issues, trustees may need to consider whether it is appropriate to agree lower contributions. This may also include a longer recovery plan, it said. The analysis comes as private sector schemes are starting to benefit from an upturn in the value of assets that underpin pension scheme funding. Last month, the combined deficit for 6,316 private sector schemes fell by £71bn to £185.5bn at the end of May 2013, largely due to a rise in gilt yields. Pension scheme deficits soared to record highs last year as a result of falling gilt yields, driven down by the Bank of England’s quantitative easing policy. Continue reading
