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South Arkansas has been fertile ground for the wood pellets industry this year, as three manufacturers have recently started or completed projects.
At least two are expecting continued growth, and it appears they’re in the right place for an industry built on pine fiber.
“We’re sitting here in a state of almost 19 million acres of forest land, which is about 56% of the entire state,” Max Braswell, executive vice president of the Arkansas Forestry Association, told Arkansas Business. “And so you have a tremendous supply of available and sustainably grown fiber.”
The supply currently outstrips demand, Braswell said. “So when we have the opportunity for [wood pellet] plants like this to locate in Arkansas, it provides new markets. We feel like that it’s a win-win scenario, not only from an economic perspective, but from a forest health perspective.”
The largest of the recent projects is an expansion of the Highland Pellets LLC facility in Pine Bluff, which has created 100 jobs there and will create hundreds more with suppliers, co-founder and Chairman Tom Reilley said.
In December, his company reached a $135 million capital partnership with Orion Energy Partners LP to fund an expansion of the facility that will increase its annual capacity by 12%, to 675,000 metric tons of wood pellets.
The pellets will be used as fuel for renewable electricity production at a converted coal power plant. The company has a long-term contract with a European power producer.
Reilley also said Highland Pellets will build a smaller facility, with a 300,000-ton capacity, on 54 acres that it acquired last year at the Port of Pine Bluff.
The company owns another 350 acres in Ogemaw, an unincorporated community southwest of Camden in Ouachita County, and plans to do something there in the next few years, Reilley said.
Another recent project is Dansons USA’s barbecue wood pellet mill and distribution center in Hope. The Phoenix company is planning a grand opening in October, President Jeff Thiessen said.
Dansons’ project, announced in February, is expected to create 50-100 jobs over the next three years. The facility features three pelleters and will have an initial capacity of 100,000 tons of pellets made for the Pit Boss Grills and Louisiana Grills brands, and the infrastructure is in place to triple the production capacity.
As of July 30, Dansons had hired nearly 30 people. “We’re continuing to hire. I think the first wave will probably be closer to between 40 and 50, in that neighborhood,” Thiessen said.
“The company just keeps growing by leaps and bounds,” Thiessen said. “We’re growing with the market, and we’re just blessed with great retail partners,” including Walmart, Lowe's and Menards, a Wisconsin home improvement chain with hundreds of stores from Wyoming to West Virginia but none in Arkansas.
Dansons saw “huge growth” in 2020, he said. A consumer trend away from propane grills to wood pellets accelerated during the pandemic, and Dansons’ retail partners were deemed essential, so they never closed amid shutdowns designed to slow COVID-19 infections.
The third recent project is by Drax Group of Selby, England. The company announced in May that it would begin building three “satellite” pellet plants in Arkansas, investing $40 million and creating about 30 jobs.
The first is being built near a West Fraser sawmill in Leola (Grant County) and is expected to be operational in October. The others will be built in the coming months at sites the company has not disclosed.
The plants are expected to produce about 120,000 tons of pellets a year that will be used as fuel for renewable electricity production.
The company did not respond to interview requests by press time.
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Wood Pellets: Good Fit For a State Full of Trees - Arkansas Business Online
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