Rentech Acquires Wood Chip Processor Fulghum Fibres; Also Enters Growing Wood Pellet Industry with Contracts to Supply Over Four

Rentech Acquires Wood Chip Processor Fulghum Fibres; Also Enters Growing Wood 
Pellet Industry with Contracts to Supply Over Four Million Metric Tons to 
Utilities from Two Plants 

    --  Fulghum Fibres is the leading provider of contract wood chip
        processing services in the U.S., with approximately $10 million
        of Operating Income and $20 million of EBITDA expected in 2013.
    --  Two former wood processing facilities to be acquired and
        converted to produce wood pellets, projected to have combined
        stabilized Operating Income of $3 million and EBITDA of $15
    --  Contracts in place for the sale and transport of approximately
        445,000 annual metric tons of wood pellets over ten years;
        sustainably managed wood supply from Crown forests in Ontario,
        Canada; and joint venture development and construction partner.
    --  Rentech enters wood fibre processing business with stable cash
        flow, construction and operating expertise, and long-term
        contracts structured for stable margins and cash flow.
    --  Businesses provide Rentech with diversification of margins,
        products and markets and entry into rapidly growing pellet

Conference Call Today at 7:00a.m.PDT

LOS ANGELES, CA, May 2, 2013 /CNW/ - Rentech, Inc. (NYSE MKT: RTK) today 
announced the acquisition of Georgia-based Fulghum Fibres, Inc. (Fulghum 
Fibres) and the acquisition of two facilities for conversion to the production 
of wood pellets in Ontario, Canada, along with contracts for the sale and 
transport of more than four million metric tons of wood pellets over ten 
years. These steps position Rentech to develop a world class wood processing 
business for production of high-quality wood chips and pellets. Rentech 
expects these investments to be funded from cash on hand, expected 
distributions from Rentech Nitrogen, and investments from a joint venture 
partner. Rentech will host a conference call today at 7:00 a.m. PDT to review 
additional details regarding today's announcements as disclosed in its 
investor presentation posted on its website.

Fulghum Fibres is expected to have approximately $10 million of operating 
income and $20 million of EBITDA in calendar year 2013, consistent with its 
stable financial history. The net purchase price, including assumed debt, is 
$112 million. The company, founded nearly 25 years ago, has been consistently 
profitable and maintains a solid reputation as a producer of high quality wood 
chips and other services to a diversified customer base in the pulp and paper 
industries in the U.S., South America and Asia. The acquisition provides 
Rentech with immediate stable cash flow with growth opportunities, and a 
platform to launch into the growing and complementary global wood pellet 
industry. The acquisition also brings with it a joint venture with Graanul 
Invest, a large European producer of pellets, for the development and 
construction of pellet plants in the U.S. and Canada.

Take-or-pay contracts are in place with two utilities to supply a combined 
total of 445,000 metric tons of wood pellets annually over ten years. To 
supply the pellets, Rentech plans to convert two decommissioned wood fibre 
mills in Eastern Canada into pellet mills that will employ a total of 
approximately 65 full-time employees and help to create jobs for construction 
and wood supply from sustainable Crown forests in Ontario. These two 
facilities are expected to generate $3 million of operating income and $15 
million of EBITDA when fully operational, with combined total project cost 
estimated at $70 million. Rentech has contracted for the handling and 
transport of the pellets. The two plants would make Rentech the largest 
producer of industrial wood pellets utilizing fibre from Eastern Canada, a 
source of supply that is highly desired due to its location and wood quality.

"Today's announcements launch us into the wood fibre and pellet supply 
business, with immediate cash flow and significant growth opportunities, and 
allow us to take advantage of our fibre relationship in the Province of 
Ontario," said D. Hunt Ramsbottom, President and Chief Executive Officer of 
Rentech. "Fulghum Fibres provides immediate and steady EBITDA and nearly 25 
years of fibre processing expertise that we can leverage for successful 
execution in the wood pellet industry." Mr. Ramsbottom continued, "The wood 
chip and pellet industries, which qualify for an MLP structure, are growth 
sectors with long-term contracts that should provide stable margins and 
attractive returns on project investments. With sustainable fibre supply from 
Crown forests, Rentech will continue to pursue First Nations partnerships and 
opportunities for economic development associated with our Ontario projects. 
With our long-term customer contracts, processing expertise, and logistics in 
place, Rentech is positioned to execute on our objective to be a leader in the 
rapidly growing global market for wood pellet production."

Mr. Ramsbottom added, "We expect these new businesses to have stable cash 
flows. The pellet facilities are structured around sustainably managed 
long-term fibre supplies and long-term off-take and logistics contracts. 
Fulghum Fibres' chip processing business is primarily a fee-based service. The 
stability of margins we expect here will reduce our consolidated exposure to 
agricultural cycles inherent in Rentech Nitrogen's business. We believe this 
diversification and pricing stability creates a stronger and more valuable 
entity at Rentech in the short, medium and long term."

Fulghum Fibres
Based in Augusta, Georgia, Fulghum Fibres has approximately 420 employees and 
is a leader in contract fibre processing services. Fulghum Fibres, which was 
established in 1989, processes approximately 15million metric tons of wood 
and bark annually into wood chips and residual fuels at its 32 wood chipping 
mills, 26 of which are located in the U.S. and 6 of which are located in South 
America, where Fulghum Fibres provides chipping services and exports wood 
chips to customers who are primarily in Japan. Fulghum Fibres operates 
primarily under long-term contracts and services a portfolio of 
industry-leading customers, such as Georgia Pacific, International Paper and 

Revenues are typically based on per-ton processing fees with minimum volume 
requirements. Fulghum Fibres commands an estimated 70% of the U.S. contract 
chipping business and approximately 6% of the total U.S. chipping market that 
includes in-house chipping operations by large pulp and paper companies. In 
the U.S., the majority of Fulghum Fibres' wood chip production is destined for 
products with the highest expected growth in the pulp and paper market, such 
as containerboard, boxboard, and tissue.

The senior management team of Fulghum Fibres has signed employment agreements, 
and is expected to remain in place for the foreseeable future. Fulghum 
Industries, which manufactures wood handling and chipping equipment and has 
been under common ownership with Fulghum Fibres, is not being acquired, but 
will continue to supply equipment and expertise to Fulghum Fibres on favorable 

Fulghum Fibres Transaction Highlights
Rentech will acquire all of the equity interests of Fulghum Fibres for $60 
million, to be paid from cash on hand. Rentech will acquire approximately $10 
million of cash, repay $3 million of debt, and assume approximately 
$59million of Fulghum Fibres' debt, for a total net purchase price of 
$112million. The acquisition price equates to 5.6 times 2013 forecasted 
EBITDA for Fulghum Fibres' business.

Fulghum Fibres is forecasted to have revenues of approximately $95 million, 
operating income of approximately $10million and EBITDA of approximately $20 
million in calendar year 2013, which are consistent with Fulghum Fibres' 
stable historical financial performance. Further explanation of EBITDA, a 
non-GAAP financial measure, and a reconciliation of Fulghum Fibres' forecasted 
EBITDA to operating income have been included below in this news release.

Fulghum Fibres as Platform for Pellet Business
Fulghum Fibres provides Rentech with a stable operating and financial platform 
with inherent growth opportunities within the sector. The Company intends to 
use this platform to launch into the complementary, growing wood pellet 
industry, a natural extension of chip production. Fulghum Fibres brings 
operating and processing expertise to the front end of the Company's wood 
pellet business, as each pellet mill requires wood handling and production of 
chips. Fulghum Fibres also brings a joint venture with Graanul Invest, a 
European company that is one of the largest pellet producers in the world, to 
develop and construct pellet projects in the U.S. and Canada.

Entry into the Wood Pellet Supply Industry
Global demand for wood pellets is projected to triple by 2020, to 50 million 
metric tons. Rentech has secured the key elements to quickly become an 
industrial scale supplier of wood pellets from Eastern Canada to the Canadian 
and European utility markets with:
    --  Deep experience in wood handling and production of chips with
        the acquisition of Fulghum Fibres,
    --  A joint venture for development, construction, and investment
        in the U.S. and Canada with a major European producer of
    --  Two take-or-pay ten-year off-take contracts for combined pellet
        deliveries averaging 445,000 metric tons annually,
    --  Two decommissioned facilities in Ontario, Canada for conversion
        to pellet production,
    --  Exclusive priority access to the only large scale pellet
        handling facility in Eastern Canada through a 15-year agreement
        with Quebec Stevedoring Company Limited (Quebec Stevedoring),
        which provides deep water access at the Port of Quebec and
        short shipping distance to European pellet consumers,
    --  A strategic relationship with Canadian National Railway Company
        (CN) (TSX: CNR) (NYSE:CNI) for the inland transportation of
        pellets to the port,
    --  Job creation, including new employment opportunities for First
    --  Sustainably managed fibre supply from Ontario Crown forests,
    --  In-house management expertise in forestry and pellet supply.

Contracts to Supply Pellets
Two ten-year take-or-pay contracts are in place for the sale of industrial 
wood pellets totaling over four million metric tons of production over the 
life of the contracts.

Drax Power Limited (Drax)
Drax has signed a ten-year off-take contract for the delivery of approximately 
400,000 metric tons of pellets annually to be supplied by Rentech's Wawa and 
Atikokan facilities (see below), with prices indexed for inflation, fuel and 
fibre supply costs. The contract establishes a strategic relationship with 
Drax, which plans to invest approximately U.S.$1billion through 2017 to 
transform the largest coal-fired power station in the U.K. into an electricity 
generator fuelled predominantly by sustainable biomass. With the conversion of 
three of six generating units from coal to biomass, Drax is expected to demand 
approximately seven million metric tons of pellets per year by 2017.

Dorothy Thompson, Chief Executive of Drax said, "We are delighted to have 
entered into an agreement with Rentech for the supply of sustainable wood 
pellets. Forming an integral component of our fuel supply arrangements and 
supporting the diversification of our supplier base, this agreement helps to 
underpin the transformation of Drax into a predominantly biomass-fuelled 
generator, providing low carbon, cost effective and reliable renewable power."

Ontario Power Generation (OPG)
OPG, which is phasing out the use of coal to produce electricity at its power 
plants, has signed a ten-year off-take contract for the Atikokan project (see 
below) for the supply of 45,000 metric tons of pellets annually FOB plant 
gate. The OPG contract is the first long-term pellet supply agreement for a 
domestic utility in Canada. OPG has the option to expand the contract to 
90,000 metric tons annually. Rentech will acquire the OPG contract as part of 
the acquisition of the Atikokan project.

Conversions of Fibre Mills to Pellet Production
Rentech expects to convert two decommissioned fibre mills in Ontario, Canada 
with significant existing re-usable infrastructure into pellet mills to 
fulfill pellet deliveries required under the Drax and OPG contracts.

Wawa Facility 
Rentech has exclusive rights to acquire, at a fixed price, a former oriented 
strand board processing mill from Weyerhaeuser in Wawa, Ontario, which Rentech 
expects to convert for production of approximately 360,000 metric tons of 
pellets annually. The full output of pellets from this facility will be sold 
under a long-term contract to Drax, with the first delivery under the contract 
scheduled for the fourth quarter of 2014. The facility is expected to consume 
approximately 710,000 metric tons of certified sustainably managed Crown fibre 
annually and is anticipated to employ approximately 40 full-time employees.

"I am pleased to see Rentech's investment in Northern Ontario coming to 
fruition and bringing critically needed jobs to Wawa and surrounding areas. 
This project will help to diversify the local economy. I look forward to 
continuing to work with Rentech in the future," stated Michael Mantha, 
Algoma-Manitoulin Member of Provincial Parliament.

Atikokan Facility 
Rentech has entered into an agreement to acquire a former particle board 
processing mill from Atikokan Renewable Fuels in Atikokan, Ontario, located 
just 18 kilometers from the OPG power station, which is expected to be 
converted for production of approximately 125,000 metric tons of pellets 
annually to supply 45,000 metric tons annually under the OPG contract, with 
the balance to be sold under the Drax contract unless OPG exercises its option 
on the additional 45,000 metric tons. The first delivery of pellets under the 
OPG contract is scheduled for the first quarter of 2014. The facility is 
expected to consume approximately 250,000 metric tons of Crown fibre annually 
and is anticipated to employ approximately 25 full-time employees.

Rentech has formed a partnership with Great North Bio Energy to continue to 
work with First Nations in the development and operation of the Atikokan 

Financial Forecast for Wawa and Atikokan Facilities 
The facilities are expected to generate revenues and EBITDA beginning in 2014, 
with a ramp-up to approximately 80% of stabilized EBITDA in 2015 and 
forecasted stabilized operating income of $3 million and stabilized EBITDA of 
$15 million in 2016. The total cost to acquire and convert the two mills is 
estimated to be approximately $70 million and is expected to be funded by cash 
on hand, expected distributions from Rentech Nitrogen, cash generated by 
Fulghum Fibres, and anticipated joint venture investments from Graanul Invest.

Contracts for Transport and Handling of Pellets 
The transport arrangements secured by Rentech are central to the Company's 
strategy to become a prominent manufacturer and exporter of wood pellets in 
Eastern Canada. The long-term contracts described below establish the costs to 
transport pellets from the Wawa and Atikokan facilities, and are structured to 
reduce per-ton expenses as pellet volumes increase through future expansions 
and/or developments.

Port of Quebec
The Port of Quebec, which is located along the Saint Lawrence Seaway and 
provides a direct and expedient route from Eastern Canada to Europe, is an 
inland port suitable for large Panamax vessels that provides important 
economies of scale. Rentech has entered into a long-term contract with Quebec 
Stevedoring at the Port of Quebec to provide stevedoring, terminalling and 
warehousing services. This agreement is designed to support the term and 
volume commitments of the Drax contract as well as future pellet exports 
through the Port of Quebec. Quebec Stevedoring will invest an estimated $20 
million to build handling equipment and 75,000 metric tons of pellet storage 
exclusively for Rentech's use at the port, with the same amount becoming a 
lease obligation of Rentech. Offering year-round terminal access, the Port of 
Quebec is expected to become the largest bulk pellet terminal in Eastern 
Canada as a result of this contract.

Rentech has secured a long-term contract with CN, whose freight railway 
network spans Canada and mid-America, to transport the wood pellets 
approximately 1,110 miles from the Wawa facility, and 1,500 miles from the 
Atikokan facility, to the Port of Quebec. Rentech expects to lease more than 
200 covered hopper rail cars from third parties to transport wood pellets to 
the Port.

CWT Commodities (USA), a leading solutions provider of integrated logistics 
and supply chain management, is providing market intelligence and logistics 
advisory services in support of Rentech's Eastern Canadian wood pellet 
projects under a long-term strategic relationship with the Company.

Wood for Pellets Sourced from Crown Timber 
Rentech intends to utilize Canadian Crown fibre, which is highly desirable due 
to Ontario's long-term forest management regime, which supports fibre 
availability, security of supply, and industry-leading sustainability 
practices. In addition, mixed hardwood trees in Northern Ontario have chemical 
properties that allow for the production of top-tier quality pellets.

The Honorable David Orazietti, Minister of Natural Resources, said, "Our 
government is committed to continuing to improve the competitiveness of 
Ontario's forestry industry and are encouraged by early signs of growth and 
progress in the sector. We look forward to working with Rentech on their 
proposals, which are expected to achieve economic benefits for northern 
Ontario and First Nation communities in the Atikokan and Wawa areas."

Joint Venture for Development, Construction and Project Investment
In connection with the acquisition of Fulghum Fibres, Rentech has entered 
directly into a joint venture (JV) agreement with Graanul Invest (Graanul), a 
European company which is one of the largest pellet producers in the world. 
Graanul has designed, built, and operates, 6 pellet facilities in Europe, 
which produce 830,000 tons of pellets annually. The JV is an equal equity 
partnership between Rentech and Graanul to develop and build wood pellet 
facilities in the U.S. and Canada. Under the JV, Graanul will provide EPC 
services to projects developed by the JV. Graanul will also provide marketing 
services for excess pellets produced by the JV, and allow the JV to acquire 
pellets from Graanul's European plants in the event the JV needs to supplement 
pellet supplies.

Wood Pellet Industry: Forecasted for Growth
According to independent industry reports, the global demand for wood pellets 
is forecasted to reach 50 million metric tons by 2020, which is nearly three 
times the current global demand. Wood pellets provide a clean energy source 
for power generation. Much of the global wood pellet production is consumed in 
Western Europe by large utilities to reduce reliance on coal, reduce carbon 
emissions and avoid regulatory penalties. Japan, Korea and China are expected 
to represent growth opportunities as a result of increasing demand for pellets 
to be used as fuel for reliable and diversified power generation. The U.S. and 
Canada are seen as the best export supply markets for wood pellets based on 
fibre supply availability, logistics capabilities, and distance to market.

Wood Fibre Strategy: Summary of Benefits
Rentech believes its investment in the wood fibre industry will create value 
for its shareholders because of the following key attributes of the sector, 
which are consistent with Rentech's announced criteria for new investments:
    --  Stability of cash flows,
    --  Long-term customer, supply, and logistics contracts,
    --  Diversification of products and markets,
    --  Targeted returns on capital in the mid-teens and higher,
    --  Commercially available technologies,
    --  Global and growing markets,
    --  Capital requirements to execute on the strategy are within
        Rentech's anticipated resources,
    --  Leverages Rentech's expertise and resources, and
    --  Income qualifies for a Master Limited Partnership (MLP)

Sean Ebnet as Business Lead
Sean Ebnet joined Rentech in October 2012 in the role of Senior Vice President 
of Business Development. Mr. Ebnet is responsible for growing and managing 
Rentech's wood fibre business. He began his career with the United 
StatesForest Service before moving into the private sector, where he worked as 
a consultant to numerous forest products companies, power utilities and 
government agencies. In 2000, Mr. Ebnet became Executive Director of 
Alternative Energy Investment Group where he was responsible for the 
screening, research and development of privately funded renewable power 
projects. In 2008, he joined Drax, operator of the largest coal-fired power 
station in the U.K., as Director of New Business and spearheaded the company's 
development of the largest biomass co-firing facility in the world. Mr. Ebnet 
holds a B.S. degree from the University of Washington.

Sustainability Commitment 
Rentech's objective is to increase shareholder value through the development 
of a world class wood processing business. This objective will be achieved, in 
part, by adopting best practices of sustainable forest management, and 
ensuring that the feedstock supplies to the Company's facilities meet the 
rigors of independent certification of environmentally sound practices and 
procedures for the sale and export of wood pellets to Europe.

Conference Call and Investor Presentation
The Company will hold a conference call today at 7:00a.m. PDT to discuss the 
transactions. The slide presentation to be used in conjunction with the call 
will be available on Rentech's website,, within the 
Investor Relations portion of the site under the Presentations section. By 
dialing 1-866-294-4838 or 1-847-944-7303 and entering the pass code 9069023, 
callers may listen to the live presentation, which will be followed by a 
question and answer segment. An audio webcast of the call will also be 
available on the same web page as the presentation. A replay of the audio 
webcast and teleconference will be available from 9:30a.m.PDT on May 2, 
2013 through 9:30a.m.PDT on May 12, 2013. A replay of the teleconference 
will be available by dialing 1-888-843-7419 or 1-630-652-3042 and entering the 
pass code 9069023.

Disclosure Regarding Non-GAAP Financial Measures
EBITDA is defined as operating income plus depreciation expense. EBITDA is 
used as a supplemental financial measure by management and by external users 
of our financial statements, such as investors and commercial banks, to assess:
    --  the financial performance of a company's assets without regard
        to financing methods, capital structure or historical cost
        basis; and
    --  a company's operating performance and return on invested
        capital compared to those of other publicly traded companies,
        without regard to financing methods and capital structure.

EBITDA should not be considered an alternative to net income, operating 
income, net cash provided by operating activities or any other measure of 
financial performance or liquidity presented in accordance with GAAP. EBITDA 
may have material limitations as a performance measure because it excludes 
items that are necessary elements of Rentech's costs and operations. In 
addition, EBITDA presented by other companies may not be comparable to 
Rentech's presentation, since each company may define these terms differently.

The table below reconciles Fulghum Fibres' forecasted EBITDA to operating 
income for the twelve months ending December 31, 2013 (unaudited estimate, 
stated in millions).
                     12 Months Ending
                     December 31, 2013

Operating Income        $         10.0

Plus: Depreciation                10.0

EBITDA                 $          20.0

The table below reconciles the estimated stabilized EBITDA to operating income 
for the Wawa and Atikokan facilities (unaudited estimate, stated in millions). 
                       Operating Year

Operating Income       $          3.0

Plus: Depreciation               12.0

EBITDA                 $         15.0

About Rentech, Inc.
Rentech, Inc. ( owns and operates wood fibre and nitrogen 
fertilizer businesses. The wood fibre business consists of the provision of 
chipping services and the manufacture and sale of wood chips, through a 
wholly-owned subsidiary, Fulghum Fibres, Inc., and the development and 
operation of wood pellet production facilities. Rentech's nitrogen fertilizer 
business consists of the manufacture and sale of nitrogen fertilizer through 
its publicly-traded subsidiary, Rentech Nitrogen Partners, L.P. Rentech also 
owns the intellectual property including patents, pilot and demonstration 
data, and engineering designs for a number of clean energy technologies 
designed to produce certified synthetic fuels and renewable power when 
integrated with third-party technologies. 
Forward Looking Statements 
This press release contains forward-looking statements about matters such as: 
forecasted EBITDA, operating income, and depreciation; the outlook for the 
wood fibre business; our ability to consummate the acquisition of the 
facilities in Wawa and Atikokan, Ontario; successful integration and future 
performance of acquired assets or businesses; successful design, 
implementation and execution of growth projects; Rentech's plans for market 
share of the wood pellet industry; sale and transport of wood pellets, and 
plans for sustainability. These statements are based on management's current 
expectations and actual results may differ materially as a result of various 
risks and uncertainties. Other factors that could cause actual results to 
differ from those reflected in the forward-looking statements are set forth in 
Rentech's prior press releases and periodic public filings with the Securities 
and Exchange Commission, which are available via Rentech's website at The forward-looking statements in this press release are 
made as of the date of this press release and Rentech does not undertake to 
revise or update these forward-looking statements, except to the extent that 
it is required to do so under applicable law. 
Julie Dawoodjee Cafarella Vice President of Investor Relations and 
Communications 310-571-9800 
SOURCE: Rentech, Inc. 
To view this news release in HTML formatting, please use the following URL: 
CO: Rentech, Inc.
ST: California
-0- May/02/2013 11:00 GMT
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