German Pellets' Louisiana plant expected to begin operations soon

By Erin Voegele | December 11, 2014

German Pellets GmbH has released its third quarter financial results, reporting a good start to the new heating season and announcing a new 10-year contract with a European power plant operator. 

Within its interim fiscal report for the quarter, German Pellets indicated construction on its Urania, Louisiana, pellet plant is continuing. The installation of the pellet presses began in mid-October and the site is expected to be operational by the end of the year. 

The company also reported that sales to the end-customer business gained momentum in the third quarter. In addition, German Pellets said it was able to finalize several new medium-term and long-term supply contracts with the medium-sized customer segment, which includes commercial and municipal facilities, accounting for approximately 250,000 metric tons. In August, German Pellets signed a fuel-supply contract with a European public utility company for the supply of wood chips to a power plant in France. According to the company, the agreement represents its first major supply contract for wood chips.

In a press release announcing the quarterly results, German Pellets specified that the new contract with the European power plant operator allow for up to 5 million tons to be delivered over a 10-year period, with deliveries expected to commence in mid-2016.

German Pellets also reported that it took over the pellet business of Michael Wäsler GmbH in September. The transaction includes the company’s vehicle fleet, storage facilities, pellets, briquettes and animal-litter businesses, along with the workforce.

German Pellets reported EBITDA of €37.06 million ($45.84 million) for the quarter, up from €32.35 million during the same period of last year. Sales proceeds for the quarter reached €392.56 million, up from €380.23 million. Gross performance was €400.65 million, up from €417.39 million. Gross proceeds reached €93.65 million, up from €83.38 million during the same three months of 2013.

"German Pellets is asserting its leading position. Through advantageous manufacturing costs in the USA, and by the expansion of our sales in almost all European core-markets, we have succeeded in improving earnings despite what, in part, were difficult market conditions", said Peter H. Leibold, managing director of German Pellets, in a statement.

In November, German Pelelts announced the formation of a joint venture with ZG Raiffeisen Energie GmbH, a Germany-based trading and service company. The joint venture, named “best:Pellets Handelsgemeinschaft,” aims to group together the companies’ operations in the southwest region of Germany.