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MARKET WATCH

Forestry Related Industry News - August 2014

Posted by LeAndra Spicer on August 26, 2014

Bioenergy

Highland Pellets announced plans to build a 500,000 metric ton per year wood pellet facility in Pine Bluff, Arkansas. The $130 million project will reportedly create 35 direct jobs and 482 indirect jobs. The company expects to break ground on the site in October and begin operations at the plant by March 2016.

Construction on a wood pellet export facility at the Port of Wilmington (North Carolina) is also expected to begin this fall and take about a year to complete. Enviva will finance the estimated $35 million project, which is expected to create 70 new jobs at the port and 80 indirect jobs to support its operations. The project will include the construction of two concrete storage domes, unloading stations for both rail and truck, and a ship loading and dock conveyer system.

Rentech’s Atikokan (Ontario) pellet plant has completed a successful test run will and begin full production any day now. The plant has a capacity of 100,000 metric tons per year and will supply the Ontario Power Generation biomass facility. The Atikokan facility, along with Rentech’s Wawa plant, will also produce pellets for Drax.

Drax is considering its options after receiving word Unit 2 is not eligible for an early Contract for Difference (CfD). CfDs are long-term contracts the UK government has implemented to support the development of low carbon electricity generation. In December 2013, the UK Department of Energy and Climate Change (DECC) shortlisted two Drax units, but then in April announced Unit 2 did not meet the criteria.

Drax challenged the decision, and the High Court said the second unit conversion was eligible for an Investment Contract.  DECC told Drax it intended to award a contract for the unit but not before it appealed the High Court’s judgment, which was subsequently overruled by the Court of Appeal.

Lumber

Canfor Corporation is acquiring Balfour Lumber Company and Beadles Lumber Company in Thomasville and Moultrie, Georgia. The two mills have a combined capacity of 210 million board feet.

Canfor is not the only Canadian company with plans for expansion into the US.  According to a company spokesman, Montreal- based Resolute Forest Products’ “strategy is to use cash generated by the newsprint sales to invest in businesses like lumber and pulp that have growth potential.”

The largest newsprint producer in the world, Resolute is seeking to reduce its reliance on paper and is assessing opportunities to expand its solid wood-products business into the United States. Resolute is the fifth-largest producer of lumber in North America and owns a number of pulp and paper mills in the US South. 

Northeast

There was both good news and bad news out of Maine in August. ReEnergy Holdings plans to resume operations at its 39-megawatt wood biomass-to-electricity facility in Ashland. Market conditions forced the facility to cease operations in March 2011. ReEnergy anticipates the facility will be fully operational by December; 25 direct jobs and approximately 150 indirect jobs will be restored.

Meanwhile, the Old Town Fuel and Fiber mill has ceased operations indefinitely and furloughed 180 of 195 employees. A statement released by the company cited increased foreign competition along with high wood and energy costs as causes that led to the closure. In addition to producing wood pulp for the paper industry, the Old Town mill was collaborating with the University of Maine to produce butanol from the cellulose in wood fiber. 

Topics: forest industry news

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