Northeast Wood Products pellet capacity to near 350,000 tons

By Anna Simet | October 07, 2014

In a span of about eight months, Northeast Wood Products LLC will have gone from no presence in the industry to possessing nearly 350,000 tons of U.S. wood pellet production capacity.

In June, the company, the majority shareholder of which is the Mohegan Tribe of Connecticut, announced that it had acquired Pennington Seed Co.’s 65,000-metric-ton-per year pellet plant in Peebles, Ohio, related equipment and assets at the company’s Kenbridge, Virginia, facility, and was in process of acquiring Pennington’s 65,000-metric-ton-per-year pellet plant in Ligonier, Indiana. 

Guy Mozzicato, president of Northeast Wood Products, explained that currently, the assets of the Kenbridge facility remain at the site, but plans are in the works to move it to a different location very soon. “At the same time, we acquired the Peebles plant, retrofitted and brought it up-to-date with new technology, changed some of the feed systems and conveyors, in order to better utilize the assets there,” he said.

After a couple of weeks of training exercises, startups and shutdowns at the Peebles plant, the company hopes to be in a 24/7 production schedule by mid-October.

In the midst of the aforementioned acquisitions, the company was under contract to purchase the Ligonier plant, which it recently closed on, several months later than anticipated due to a permitting issue. “The dryer permit had lapsed and had been terminated, so it took us nearly four months to get that permit reissued,” Mozzicato said.

And finally, but not the last of what it plans to do this year, the company has also closed on machinery assets of Tennessee Hardwood in Kempton, Tennessee, which Mozzicato said the company plans to move to another facility that it has an option on but has not yet exercised it. “We’re still in due diligence, but realistically, we have about 65,000 tons of capacity on Ohio, another 65,000 will come offstream in Ligonier, and when we move machines from Peebles to soon-to-be-announced location, sometime in the next month or so, that will add another 65,000 tons, totaling around 200,000 tons.”

Add about 120,000 tons of capacity with the Tennessee Hardwoods machinery relocation and another small acquisition in the works, and Northeast Wood Products will possess around 300,000 tons of capacity, according to Mozzicato. “Our intent is to be in the neighborhood of 350,000 tons.”

The current plan is to focus on domestic and international markets, particularly the European heating market, Mozzicato said. “As we continue to expand capacity, we may also move to industrial or utility applications, but at this tonnage, there’s demand enough in that heat market, so that’s where we’re focused.”

On its sudden and relatively drastic entrance into the industry, Mozzicato said Northeast Wood Products recognized an industry that had been largely fragmented for a number of years, and saw an opportunity to consolidate and bring in new capital and professional management. “Our intent is to continue to grow at a similar pace to where we are until we reach a level where we’re comfortable,” he said, reiterating that more projects were in the pipeline.