Lothian Estates: Woodfuel business planning

Timber stacks drying in a wood fuel depot

When Lothian Estates wanted to investigate entry into the woodfuel market, they turned to re:heat to help them understand the costs, opportunities and barriers through the production of a woodfuel business plan.  Building on a previous commission which looked at the market from a high-level, Lothian Estates engaged re:heat to look at the specific example of converting an underutilised farm steading next to a main road into a major woodfuel processing and distribution depot.

Lothian Estates is a large, forward-looking estate in the Scottish Borders, with a significant forestry resource which finds traditional markets in the Borders and Northumberland.  Like the majority of forest owners, Lothian Estates is keen to maximise the return from its timber sales and woodfuel is seen as an important emerging market in and around the Estate.  The Lothian Estates’ team commissioned re:heat to build on work which they had previously undertaken on an earlier contract, and to specifically look at their Liliardsedge site.  Liliardsedge was an Estate farm with buildings that had fallen into disrepair, but being adjacent to a main road, offered excellent potential as a woodfuel processing and distribution hub.

Using our long experience in the sector, re:heat assessed the space and buildings available on the site and looked at the forestry and material handling equipment on the wider estate.  Armed with this information, we made an assessment of the local market that the Estate could realistically expect to serve, and then set about creating a business plan to inform the estate of the capital and running costs that could be expected.

Our business plan covered the technical and economic elements of processing wood for firewood and woodchip markets, as well as the options for fuel transport and delivery.  Woodfuel quality assurance schemes were also examined, as were quality control procedures and marketing.  The plan then looked at a number of scenarios for market entry, and included detailed profit and loss projections for the planned enterprise.

Lothian Estates is just one of several estates for whom we’ve undertaken similar work, and our practical experience of all aspects of woodfuel production and use have proved invaluable in helping understand the opportunity and risks associated with entering the market.