Pellet mill may occupy shuttered Virginia paper mill

By Lisa Gibson | April 20, 2011

A shuttered paper mill in Franklin, Va., might be given new life and purpose as an enormous pellet mill. The plan would also bring back a majority of jobs for a workforce laid off when the paper mill closed in April 2010.

Franklin Pellets LLC, a new joint venture between Houston-based energy development firm MultiFuels LP and Virginia-based diversified investment firm CMI LP, would produce 500,000 tons of pellets annually, destined for export. The company is not yet prepared, however, to release details on where the pellets will be shipped, according to George Lyons, vice president of business development for MultiFuels.

Franklin Pellets has just recently signed a letter of intent to complete evaluation of the project including due diligence and feasibility studies. If all goes well, the plant could be operational by the middle of 2013, Lyons said.

Not only did the workers at the International Paper Co. paper mill lose their jobs when it closed, but it significantly affected the workforce operating in the wood basket, Lyons said. A local newspaper reported that the closing cost the community about 1,100 workers at the plant alone. “We’re looking to restore some of these jobs,” he said. Franklin Pellets is in negotiations for a long-term contract for the wood chips and round wood the plant will use to make its pellets. Besides the fact that all the necessary material will come from just one contract, Lyons declined to release details of the agreement.

“We are pleased that the site owner has selected our team to explore the development of this project,” said Randy Gibbs, CEO of MultiFuels. “We are very impressed with the Franklin site and believe this wood basin provides a sustainable source of wood and wood chips, making it an ideal location for the production of wood pellets to meet the growing demand for bioenergy.”

Lyons also declined to release cost estimates for the project. He did say, though, that Franklin Pellets is looking at alternatives for local and grant moneys, but the company is not predicating the economics of the facility on that.