Wood chip supplier Active Energy (LON:AEG) has raised £1mln through a placing with fund manager Ruffer to buy equipment to meet rising MDF demand in Turkey.
The company announced two new contracts in January with Yildiz Entegre, a Turkish MDF manufacturer, to supply up to 600,000 tonnes of wood chip this year.
Revenues of up to US$68mln are expected to be generated from these Turkish contracts.
The placing, at 5p per share, will enable Active Energy to buy extra production and handling equipment and cover the transport and logistics expenses of the extra volumes.
It added there could also be a further one million tonnes of wood chip demand to come through in 2016 and over the longer term and believes it can ship over 450,000 tonnes of wood chip in 2015, and over 850,000 tonnes in 2016. In 2014, it shipped 217,200 tonnes.
Richard Spinks, chief executive, said: “The ambitious volume and revenue targets that we have set ourselves have made it necessary for us to seek additional funding to support our ongoing growth."
"During 2014, we relocated our core wood chip operations to a modern facility where our daily wood chip production capacity is currently 960 tonnes, equating to approximately 313,500 tonnes per annum.
“The proceeds of this placing will enable a four-fold increase in that daily production capacity to up to 4,000 tonnes, equating to approximately 1,280,000 tonnes per annum."