Leaf Resources is helping turn forest waste into consumer products and chemicals

An outfit in regional Queensland has set itself the lofty goal of becoming a world leader in the sustainable extraction of pine chemicals.

An outfit in regional Queensland has set itself the lofty goal of becoming a world leader in the sustainable extraction of pine chemicals largely from tree stumps and other stuff leftover from logging operations.

Maryborough-based Leaf Resources is among a new wave of businesses turning agricultural and forest waste into consumer products and chemicals that until recently were entirely dependent on fossil fuels.

In an upbeat development, the company has just announced that it will double production of its natural pine chemicals to 16,000 tons per year at a newly-constructed plant at Apple Tree Creek near Bundaberg.

The move, following six months of product testing, will be financed largely via an $8m capital raising from sophisticated and institutional investors.

Ken Richards

Leaf, which is chaired by Ken Richards, predicts the heightened activity could more than double its annual revenue from $31.2m to $69.5m.

It follows the $6m acquisition late last year of a firm called Essential Queensland Pty Ltd, which launched in Gympie in 2017 with the aim of developing and commercialising the eco-friendly production of pine chemicals. Two years later it kicked off work at Apple Tree Creek.

Helping facilitate the merger, which included a $3m capital raising, was the fact that Richards served as a director of both entities. Ray Mountfort, who founded Essential Queensland, came on board as Leaf’s managing director in December as three other directors resigned.

The chemicals Leaf is churning out can be used to make a laundry list of consumer goods, including perfumes, cosmetics, food additives, adhesives, disinfectants, synthetic rubbers and printing inks.

The firm claims it is now “embarking on the biggest step-change the pine chemicals industry has experienced since the 1950s’’.

The timing appears to be good, with estimates suggesting the global market for pine chemicals is about $US10bn a year and growing.

But significant hurdles remain for Leaf, which backdoor listed on the ASX in 1999 and has repeatedly gone cap in hand to the market to source funding.

Since then it has developed a patented process to convert plant biomass, such as wood or sugar cane waste, into industrial sugars that can be used to produce renewable chemicals.

Yet plans for a bio-refinery first flagged in 2016 never eventuated. Neither did plans the following year for a processing plant in Malaysia.

Given these setbacks, the red ink has flowed uninterrupted since 2017. Leaf reported an $8.7m net loss in the December half, with the bulk of that as a result of the merger with Essential Queensland.

CHANGING OF THE GUARD

There’s been a changing of the guard at one of Brisbane’s well-established spin and marketing outfits.

Alasdair Jeffrey took on the managing director’s job at Rowland this month after first joining the firm in 1994.

He takes over from Helen Besly, who ran the company for nearly 20 years and will continue in a part-time advisory role.

Both are shareholders along with Geoff Rodgers, the chairman and founder of Rowland who launched the business about 30 years ago.

The shake-up coincides with a growth spurt for the firm. New staff have come on board in the past three months as a fresh push into the Sydney market ramps up.