Less than a year ago, Riverstone Holdings made a significant investment in Enviva LP, a manufacturer and exporter of wood pellets. Since then, things have been moving fast for Enviva. Here is a comprehensive look at just how fast the company has grown over the course of the last six months.
In August, the company made two major announcements. On August 9, Enviva announced that it had acquired CKS Energy Inc., an Armory, Miss., wood pellet plant. Enviva plans to increase production at the plant from 50,000 tons annually to 100,000 tons. On August 24, the company announced that it had signed a long-term wood pellet supply agreement with Electrabel, a subsidiary of GDF SUEZ Group, one of the largest utilities in the world. Under the agreement, Enviva will ship 530,000 tons of pellets to the Electrabel plants in Belgium.
On October 13, Enviva announced the purchase of another small pellet mill in the South, the Wiggins, Miss.-based Piney Woods Pellets. Again, Enviva plans to increase capacity at the plant from 50,000 to 150,000 tons annually.
With the combined output of 250,000 tons of pellets annually, however, and a supply agreement for 530,000 tons, Enviva continued to push forward, announcing on December 20 that they would build a pellet mill in Ahoski, N.C. with a production capacity of 330,000 tons annually.
In the same press release, the company provided a sneak peak at the future, announcing plans to add at least two more pellet mills in the area over the next two years. In 2010, Enviva had both demand and supply well in hand.
The only thing left for the company to do in 2011 appeared to be acquiring a mechanism for moving pellets from plants in the U.S. South to Belgium. On February 16, the company announced that it had done so. Enviva purchases a terminal at the port in Chesapeake, Va., which it plans to upgrade by November of this year. About this last acquisition, Enviva CEO John Keppler said, “We can now closely monitor our product from forest to plant to port, maintaining facilities that meet our high standards for product excellence and safety. Plus the terminal’s strategic location will decrease transportation time and costs through our entire supply chain, greatly benefitting our customers and improving the environmental footprint of our logistics.”
While Enviva’s rapid growth may be a concern for some, it is clear they are rapidly delivering all the essential ingredients of a successful pellet business.
The only loose thread, at this point, appears to be signing long-term supply agreements for the delivery of biomass to their facilities. The North Carolina facility alone will need 660,000 tons of wood and wood waste every year.