Rentech acquires New England Wood Pellet
Taking one step closer to its goal of becoming one of the largest wood pellet producers in the world, Rentech Inc. has acquired all three of New England Wood Pellet’s manufacturing facilities, a $34.5 million investment that adds 240,000 tons to Rentech’s annual pellet output.
New England Wood Pellet, founded in 1992, built its first facility in Jaffrey, N.H., in 1999, a research and development facility at the same site in 2006, a manufacturing facility in Schuyler, N.Y., in 2008, and an additional facility in Deposit, N.Y. in 2011.
Rentech cited several reasons for the acquisition, including New England Wood Pellet’s strong financial profile, the fact that the company commands an approximate 15 percent share of the market for heating pellets in the Northeast U.S. and is well-known to many popular retailers, and the transaction expands Rentech’s current wood pellet offerings to the domestic market.
Julie Dawoodjee Cafarella, vice president of investor relations and communications, said Rentech will maintain New England Wood Pellet’s brands, which includes its bagged New England Wood Pellet and Warm Front brands. The company will also retain all employees of New England Wood Pellet’s Jaffrey, Schuyler and Deposit facilities, she added. “We might actually add a couple of employees as we continue to expand the business,” she said.
The New England Wood Pellet acquisition comes one year after Rentech’s assumption of Georgia-based Fulghum Fibers Inc., the leading provider of contract wood chip processing services in the U.S., and is in the process of converting two Wawa and Atikokan, Ontario, wood processing facilities into wood pellet plants.
The Wawa facility will be capable of producing approximately 450,000 tons of pellets annually, the majority of which will be sold under a long-term contract to Drax. The first delivery is scheduled for the fourth quarter of 2014. The Atikokan facility is located about 10 miles away from Ontario Power Generation’s Atikokan Generating Station. It will produce about 100,000 metric tons of pellets annually, 45,000 metric tons of which will be supplied to AGS, which is in the midst of a coal-to-wood pellet conversion. The first delivery of pellets under the OPG contract is scheduled for the first half of 2014.
Rentech said management will discuss the more New England Wood Pellet acquisition details on its first quarter earnings conference call, which is scheduled for May 13.