Ongoing installation of pellet equipment at Rentech Wava plant
Ongoing installation of pellet equipment at Rentech Wava plant

US based Rentech Inc. established in 2013 a new business line “Wood fibre Processing” when buying the US based Fulghum Fibre and Fulhgum industries for $ 112 million including depts and overtaking the two Canadian idle board mills, Weyerhouser in Wava and the Atikokan Particel Board. The later to be converted for a total of 550 000 t/y pellet production to fulfill two fuel for biopower contracts, one with local Ontario Power (OPG) and one with Drax, UK largest power station.  Fulghum Fibres provides Rentech with a needed stable operating and financial platform and will also be a platform for further pellets business expansion. Rentech has in this area a joint venture with a leading European pellet producer,  Esthonian based  Graanul Invest AS.
Rentechs other business branch, Rentech Nitrogen includes the prodcution of ammonia and ammonium sulphate. It had a difficult ending of 2013 but is now running at it´s full and extended capacity. The company’s activity in the development of biofuels  has ben sold and Rentechs exit from this business will be completed during this year. Rentech is noted on  Nasdaq with the tickmark RTX.

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When precenting Rentechs  financial report for 2013 the company president and CEO D. Hunt Ramsbottom, said, “We made a strong entry into the wood fibre processing business this year. Our wood chipping business, Fulghum Fibres, is generating solid revenues and EBITDA. Our two industrial wood pellet projects in Canada are on schedule, on budget and on track to provide the returns we expect, based on long-term contracts.

Fulghum Fibres processed approximately 9.9 million green metric tons of wood from the acquisition date May 1, 2013 through December 31, 2013. The segment generated revenues of $63 million from May 1, 2013 through December 31, 2013, of which approximately $40.7 million and $22.3 million were generated from the U.S. and South American operations, respectively.

“Fulghum has industrial scale operating capabilities, a very strong brand and customers with a diversified portfolio products in a variety of industries and markets. Flughum commands an estimated 70% of the U.S. contract chipping market and is known for its operational excellence across the industry. We see great potential to expand our position as the global leader in wood chipping services.”

Rentech achieved several key milestones with respect to the Company’s two industrial wood pellet projects in Eastern Canada. The majority of outside civil and concrete construction work and all remaining detailed engineering packages were completed, and nearly 80% of all required equipment and materials have been procured. The Company has also received rail cars at the Wawa facility and the first delivery of logs at the Atikokan facility.

“We are developing a pipeline of projects to address the over 2 million metric tons of additional wood pellet demand from our existing customers. We are well positioned to capitalize on this demand. We can leverage our experience with sustainable government backed timber allocations and our secured logistics infrastructure, which includes a 15-year contract for exclusive terminal facilities at the Québec that can handle over 1 million metric tons of annual pellet flow.”, D. Hunt Ramsbottom, said.

Location of the two Rentech pellet plants and ways of shipment
Location of the two Rentech pellet plants and ways of shipment

The projects

Renthech has 10 year oftake contract with Canadian Ontario Power (OPG) and UK Drax. OPG is contracted for 45 000 t/y with an expanding option to 90 000 t/y and Drax for 400 000 t/y.

This Wava idle strand board plant is being converted to a wood pellet production facility capable of producing approximately 450,000 tons annually. The first contracted delivery is scheduled for the fourth quarter of 2014. The facility is expected to consume approximately 890,000 tons of certified sustainably managed fiber annually.

Rentech will also invest an extra $8 million in the Wawa plant, by purchasing two 170-foot electric radial log cranes from it’s subsidary Fulghum Industries. The cranes will be used instead of diesel-powered mobile equipment to manage the wood yard, off-loading and feeding.

“Cranes are typically more reliable, safer, reduce emissions, and are significantly less expensive to operate for large capacity facilities such as the Wawa plant. The use of these cranes should result in annual operating cost savings of at least $1 million, with an expected useful life of 20 years or more.” says company CEO D. Hunt Ramsbottom.

The second plant in Ontario is  the Atikokan particle board plant for production of approximately 100,000 tons of pellets annually. The first delivery of pellets under contract is scheduled for the first half of 2014. The facility is expected to consume approximately 200,000 tons of fiber annually. The plant is located only 18 km from the OPG power station under conversion from coal to biomass

These projects have according to the responsible engineering and construction company EAD required aggressive timelines in order to meet Rentech’s contractual delivery dates.

Wood processing
US N.H.-based Continental Biomass Industries (CBI) are designing and building three flail debarking and chipping systems, two for Wava and one for Atikokan  wood pellet facilities which are scheduled for installation in the spring of 2014. The CBI systems will deliver uniform 6 millimeter by 8 millimeter (mm) microchips in a single pass that can immediately be dried and milled into feedstock for pellet manufacturing.

“Traditionally, debarking and chipping in front of a pellet operation has been done with drum debarkers and disc chippers,” Anders Ragnarsson, founder and president of CBI, explains. “These systems are overall more expensive and have a tougher time debarking frozen wood. It has been proven beyond any doubt over the last several years that making microchips is a more cost effective way to produce raw material for a pellet production line.”

“We went back and forth with numerous iterations and came up with a debarking line consisting of a feed conveyer, 2-roll flail debarker and a 1,200 horsepower CBI Magnum Force 8400 stationary chipper with 5-pocket microchip rotor. Each system will have production capabilities of up to 120 tons per hour.”

Raw material
Rentech intends to utilize Canadian Crown fibre, which is highly desirable due to Ontario’s long-term forest management regime, which supports fibre availability, security of supply, and industry-leading sustainability practices. In addition, mixed hardwood trees in Northern Ontario have chemical properties that allow for the production of top-tier quality pellets.

Rail transport to port
Produced pellets will be hauled on approximatly 200 leased covered hopper railcars on CN rail lines to the port of Quebeque were Panamax ships are able to load and reach the  Atlantic through the Saint Lawrence Seaway. Quebec Stevedoring at the Port of Quebec will provide stevedoring, terminalling and warehousing services and is investing 20 million $ in handling and a  a 75 000 tons storage with an option ofr another 75 000 tons exclusive for Rentech.

The pellet dome at Port of Quebec under construction
The pellet dome at Port of Quebec under construction