LONDON (ShareCast) - Active Energy Group announced on Monday that it has signed two new supply contracts with Yildiz Entegre, a Turkey-based producer of medium-density fireboards (MDF).
Under the agreements, the AIM-listed group will deliver up to 300,000 metric tonnes of hardwood wood chip and a further 300,000 metric tonnes of its new line of softwood wood chip.

Active Energy said it expects the deliveries, which are due to take place this year, to generate revenue of $68m, with a gross profit on the contract expected to be in the region of $12m.

The firm added it has opened negotiations with other Turkish MDF manufacturers and the group remained confident the ongoing talks would lead to securing further contracts in the future, Active Energy said in a statement on Monday.

"We are all extremely proud at having secured these new supply contracts with one of the group's largest clients, which confirm our coming of age as a business and the strength of our position in our core market," said chief executive Richard Spinks.

Active Energy also confirmed it has reached a new agreement with the Ukrainian State Forest Resources Agency, its long-term partner, to secure further raw material supplies to ensure the new contracts' demands are met.

The new high-volume softwood chipping machinery for the Ukraine production site will be fully operational within the end of the first half of 2015, the group said, which will see Active Energy double its total Ukraine production capacity.

On the back of the positive news, Active Energy shares soared 25.33% to 3.95p at 14:45.

The group also said it is to launch a new product line later in 2015 after starting manufacturing of softwood wood chip from pine logs.

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