German Pellets, ZG Raiffeisen Energie form joint venture

By German Pellets GmbH | November 12, 2014

The pellet producer German Pellets GmbH and ZG Raiffeisen Energie GmbH, a Baden, Germany-based trading and service company organized as a cooperative, have founded a joint venture for the sale of wood pellets. The aim is to group together the operations in south-west Germany's pellet market to a greater extent in the future and to further expand the sale of wood pellets to end-customer. The name of the joint subsidiary company will be “best:Pellets Handelsgemeinschaft.” The resolution to found the joint venture was adopted in the last few days and approval has been obtained from the cartel-law authorities. Pellet sales to consumers begin on Jan. 1. German Pellets, one of the world's largest pellet producers, and ZG Raiffeisen Energie - belonging to one of Germany's five main cooperative-based enterprises in the Raiffeisen group - each have a 50 percent stake in best:Pellets GmbH.

Peter Leibold, managing director of German Pellets, explains, "For several years now, we have worked together with ZG Raiffeisen Energie in the pellet business in Baden-Württemberg Federal State, successfully and with a high level of trust. That is why a number of years ago German Pellets, as the manufacturer, also took over the supply logistics. ZG Raiffeisen Energie's wood-pellets business area and the players involved command a lot of experience in the fuel business, with an outstanding network in the region. We are now taking the next logical step in our cooperation, so as to gain further market shares." For years, ZG Raiffeisen Energie has been selling wood pellets of the German Pellets brand to end-consumers in Baden-Württemberg. "German Pellets' strength, impact on the market, specialist competence and high product quality have made it into an ideal and indispensable partner for us in the pellet business",”says Rudi App, managing director of ZG Raiffeisen Energie GmbH. "Our declared goal is to group together our activities even more strongly now and to further expand pellet sales also geographically,” App points out.

With best:Pellets Handelsgemeinschaft, German Pellets and ZG Raiffeisen Energie are positioning themselves to continue capitalising on the potential of the growing pellet market in the future. The market presence in the Baden-Württemberg sales area is to be expanded and new sales channels opened up in Saarland and in Rheinland-Pfalz. The sales network – consisting of sales offices and storage facilities situated close to the customer, in addition to a modern vehicle fleet – will be further expanded. Regional production is also an element in this concept, with two Baden-Württemberg-based production facilities. Customers of best:Pellets Handelsgemeinschaft will benefit from the company owners' competence in production and in sales: these factors make themselves evident in product quality and reliability. This also includes a high degree of flexibility, security of supply, and quality-management that is well suited to the product.

Around 30 percent of all Germany's pellet-burning facilities are in the south-west of the country, and the market is attaining double-digit percentage growth annually. More and more people are opting for heating sourced from wood pellets, prompted by rising prices for fossil-based energy, and the desire for a fuel that is environment-friendly and climate-friendly.