Wood pellet manufacturers setting up shop in southeastern Va., N.C.Published 10:28am Saturday, June 25, 2011
Editor’s Note: This is the first in a six-part series that focuses on the growing wood pellet industry in southeastern Virginia and northeast North Carolina.
FRANKLIN—Within 18 months, three companies announced plans to open four wood-pellet manufacturing facilities within the region, including at the former International Paper mill in Franklin.
A demand for wood pellets for generating electricity in Europe, the availability of the southern yellow pine and Western Tidewater’s proximity to the Atlantic ports seem to be the driving force.
“We’re seeing a good number of plants being built, particularly in the southeastern United States,” said Jason Berthiaume, membership coordinator for the Pellet Fuels Institute in Arlington, a trade association promoting energy independence through renewable biomass fuel.
Companies building in the area are:
* Wood Fuel Developers in Chester. In January 2010, the company announced plans to build an $18.7 million pellet plant in Greensville County that was expected to create 39 jobs.
One year later, Wood Fuel Developers announced intentions to replace a closed particleboard plant in Waverly with its new manufacturing center for wood pellets. The $8.6 million project is expected to bring 28 jobs to Sussex County.
* Enviva, a Richmond-based energy company. In December, Enviva announced it was building a wood-pellet factory in Ahoskie, N.C. The company plans to employ 60 at the plant, which is being built at the former Georgia Pacific lumber facility.
The plant will have the capacity to generate 350,000 tons of wood pellets a year and is scheduled to open later this year.
Enviva in February purchased the Giant Cement Co. port terminal on the Elizabeth River in Chesapeake for $11.7 million to export its wood biomass products, including those made in Ahoskie.
* Franklin Pellets, a newly formed partnership between Multifuels and CMI. Franklin Pellets in April announced it was eyeing the possibility of opening a wood pellet shop at International Paper in Franklin. The mill is expected to begin manufacturing in 18 to 24 months, but company officials did not say how many jobs it would create.
Peter O’Keefe, a partner with Franklin Pellets along with former Virginia gubernatorial candidate Terry McAuliffe, said an exploding market in Europe is one reason for opening the wood pellet plant.
“The market has gone from 11 million tons burned last year, upwards by 100 million by 2020,” O’Keefe said. “They are looking at the United States.”
He also noted that the Southeast is a very attractive for its wood supply and workforce.
“We as investors, whenever we see a market like this, you look at human capital that exists,” O’Keefe said. “People (live in your area) who understand the wood industry and have been involved with the industry for 100 years. You have deep experience.”
He noted too that the area has exceptional road systems to Virginia’s ports.
“You have one of the most efficient ports in the world,” O’Keefe said.
Berthiaume said over the past five to six years, his association has seen an increase in wood-pellet plant construction. Fuel prices tend to drive the market, since the capsule-size pellets of wood waste are used to heat homes and for commercial boilers as a less expensive, cleaner choice to fossil fuels.
“The primary use in the domestic market is pellet stoves and fireplace inserts,” he said.
Berthiaume agrees the availability of yellow pine and the proximity of ocean ports is driving the industry.
“I’ve seen a couple of plants go up in Georgia,” he said. “In the past few months, (they’ve gone up) near the ports of Savannah and Jacksonville.”
As for the industry’s future, Berthiaume believes fuel prices will dictate its growth.
“When fuel oil prices are high, the pellet industry does well,” Berthiaume said.