Enviva acquires pellet plants, expands production

By Lisa Gibson | October 13, 2010

Enviva LP, manufacturer of processed biomass fuels, has acquired two U.S. wood pellet plants and will increase both facilities’ capacities by tens of thousands of tons to meet demands of its customers in both the U.S. and Europe.

Most recently, Enviva acquired Tomorrow Energy’s Piney Woods pellet plant in Wiggins, Miss., and will increase its capacity from 50,000 tons per year to 150,000 tons. The plant will be renamed Enviva Pellets Wiggins and will provide 22 more jobs and another 30 throughout its logging and forestry supply chain, according to Enviva.

The company has also acquired an Amory, Miss., pellet plant formerly known as CKS Energy Inc. Newly named Enviva Pellets Amory, the plant will ramp up production from 50,000 tons to more than 100,000 tons, according to the company.

Since pellet manufacture is a capital-intensive business, both facilities will require investments in substantial new processing equipment, according to John Keppler, Enviva chairman and CEO. “We’re anxious and enthusiastic about deploying capital into expanding these facilities and delivering some pretty significant environmental benefits,” he said, declining to release a cost estimate for the expansions.

Keppler said Enviva views the market for pellets from a utility perspective to be mainly in Europe, but expects a larger adoption of biomass fuels for fossil fuel replacement in the U.S. over time. “In the very near term, a significant portion of our demand is overseas, but increasingly, we’re working with U.S. customers on meeting their renewable energy needs with biomass,” he said.

Enviva has been a biomass supplier since 2004 and has built an expansive portfolio of customers, Keppler said. “Each of these facilities will be an important part of our global fulfillments against the contracted demand that we have,” he said.

The Amory facility has already been expanded within its existing infrastructure, but the full build-out of both facilities should be complete in the first or second quarter of 2011, Keppler said, adding that Enviva has customers waiting on the expansion and prepared to purchase more biomass fuel.