UK straw merchant appoints administrators

AF Biomass, a wholly owned subsidiary of farmer-owned co-operative the AF Group, has announced that it has fallen into administration.

The Norfolk-based straw merchant operates across the whole of England, sourcing straw for the energy, food and farming sectors throughout the year. Much of the straw sold by AF Biomass goes on to be used for animal feed, animal bedding, straw-fired power stations and is even used by British vegetable producers.

Despite this high level of demand and broad range of buyers, a statement released by AF Biomass revealed that the firm had no "realistic prospect" of being able to meet its contractual obligations when it comes to the supply of straw to the power stations.

The statement added that much of the blame for the straw merchant's current circumstances have been put down to the "dramatic" changes seen by the market since the company was created.

"Following a review of AF Group’s strategic plan and in the context of a volatile and fast-changing market, the directors have concluded that AF Biomass has no realistic prospect of being able to meet its contractual obligations to supply straw to the power stations. In these circumstances, the directors have been advised that AF Biomass is insolvent and cannot continue to trade," the statement said.

"It has therefore been decided to appoint administrators to oversee the administration of AF Biomass Ltd," it added. "An inter company debt of £1m owed by AF Biomass to AF Group will not be fully recovered by the administrator. However, AF members who supplied straw in 2021 have been paid."

AF Biomass has contributed more than £800,000 to the AF Group - formerly known as Anglia Farmers - since it was launched in 2013.

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