Viridis Energy enters strategic partnership with pellet handler

By Katie Fletcher | July 10, 2014

An already valued relationship is brought to the next level with a strategic partnership between Viridis Energy’s pellet manufacturing subsidiary, Scotia Atlantic Biomass Company Ltd., and Halifax Grain Elevator Ltd., a bulk grain handling and storage provider. The location of the companies at the Port of Halifax is vital to the partnership, as well as the growth of the biomass industry in Nova Scotia. “We place a lot of emphasis on working with people in the ports,” said Michele Rebiere, chief financial officer of Viridis. “This is an example of a relationship that has culminated in a great result as an equity investment and an important relationship; we are pleased with how this one has come together.”

HGEL provides Scotia Atlantic with trucking, as well as storage of their finished goods. “Overall they are an important part to our supply chain,” Rebiere said.

The Sweden-based company Eckman & Co. is another part of the supply chain, distributing the pellets to Europe after they are handled and stored by HGEL. “The HGEL partnership is very complementary to our Eckman relationship,” Rebiere said. “They both work closely with the grain elevators and Scotia Atlantic in coordinating storage and shipment.”

Unlike many pellet storage facilities HGEL’s system allows for different grades of pellets to be stored. Currently HGEL has 365 storage silos ready for transport via cargo ship, transport vehicle or rail car, 95 of which are allocated to pellets. “They have the ability within that set of 95 to store our premium EN Plus quality pellets when we start producing them in the next year or so, and also our I1 and I2 industrial pellets that we are currently producing,” Rebiere said. “It is important for us so we have the ability to store the two different types of pellets at one facility.”

Under the terms of the agreement HGEL will invest up to $1 million in Scotia Atlantic for a maximum of 20 percent equity ownership and work with Scotia Atlantic management in support of its operational objectives.  

Another contribution to the Viridis expansion efforts, in addition to the partnership, is the new equipment being purchased with grant money given to Scotia Atlantic from the Nova Scotia government. The grant was $469,000, and has since been drawn upon for the purchase of a truck dumper and destoner among other improvements. “The truck dumper is incredibly expensive, but very strategic allowing us to take virtually any type of truck equipment and handle the unloading through the truck dumping facility,” Rebiere said. “We have additional grant money available within the allocation that we would like to use to expand on areas in the plant.”

One consideration with the additional funds is covered storage for Scotia Atlantic’s raw materials to help with moisture absorption during the wet months to prevent the yields from being impacted. “There are a number of innovations that we want to continue to consider for that plant,” Rebiere said. “Pellets is a growth industry and it really injects that new hope and promise of a good future in the industry for Nova Scotia.”

Viridis believes the partnership with Halifax Grain and the expansion efforts at the Scotia Atlantic mill will positively impact the industry and community. “The Nova Scotia government is exceptionally good to work with in terms of providing incentives for growth and innovation, as well as creating jobs in the province, said Rebiere. “We also feel that Nova Scotia can be on the world map as a key location for the pellet industry.”