Highland Pellet, Arkansas’ first full-scale wood pellet manufacturing facility, recently hired 54 new workers to begin work at the company’s $200 million, 600,000 metric ton manufacturing plant in Pine Bluff on schedule to open later this fall.
Highland Pellet CEO Tom Reilley, who has purchased real estate and set up shop in the south Arkansas city, told Talk Business & Politics this week that despite a “rainier-than-expected” construction phase that threatened to put the Boston-based partnership behind its aggressive timetable, the biomass energy facility will be commissioned and ready to ship wood pellets to the United Kingdom before the end of this year.
“Despite rainfall in Pine Bluff that was 50% greater than normal, nothing has changed,” he said. “We are still on track to start commissioning in November. Outside of that, we intend to be a very boring business and intend do what we say we will do.”
The capital outlay and total number of workers are well ahead of the company’s initial projections of $130 million in total investment and 35 new jobs. Reilley said Highland will likely add an additional dozen workers to its payroll in early 2017 to nearly double the total job tally to 68 positions. At the 200-are Highland Pellet construction site in Jefferson County, the former Wall Street investment banker said the Entergy substation that will transmit power to the plant is scheduled to be completed by Nov. 1.
Once power is on, the biomass manufacturing plant will begin testing the first of four 150,000 metric ton module production lines at the facility.
“We will make sure the motors are checked out and turning the right way, and then we will go through our checklist of items and the full commission begins on (schedule),” Reilley said.
Just over a year ago, publicly traded Astec Industries Inc. of Chattanooga, Tenn., announced it had received a $30 million down payment from Highland officials to deliver and construct the modular, multi-line wood pellet facility. Astec officials said in March they had received the final $122.5 million after Highland broke ground on the Pine Bluff site at the beginning of the year.
Reilley said the other three production lines for the Pine Bluff manufacturing will be brought into operation over the course of the next year, as well as the hiring of additional employees to run those lines.
HIGHLAND BOOSTED BY ATRS INVESTMENT
In the relatively short time span between the company’s first announcement in August 2014 and the schedule November plant opening, the privately-held, East Coast investment group has also obtained a $25 million investment in the project Arkansas Teacher Retirement System. With that equity backing, ATRS Executive Director George Hopkins has been added to Highland’s board of directors.
“We have a tremendous amount of respect George and his investment acumen. He is absolutely a leader in the pension fund investment world. I think he cares deeply about the state of Arkansas. I‘ve seen what a proactive and value-added investor he has been in various fields,” Reilley said.
Reilley said Highland officials are also making strides to become familiar with Arkansas’ forestry and timber industry, signing up as a major sponsor at next month’s annual meeting of the Arkansas Forestry Association on Oct. 4-6.
“We want to know as many players as we can, whether it is the haulers, harvester or landowners,” Reilley said. “We want them to understand the Highland culture, and that we have long-term sales agreements and that we are not a Roman candle – be here today and gone tomorrow. We are interested in long-term relationships in these (South Arkansas) communities.”
During the 18-month construction phase, the Highland project has already brought dozens of jobs to the local community. Once fully operational, Reilley said the Highland wood pellet plant will also support an estimated 500 indirect woodland jobs that supply or transport wood fiber and other forest waste to the Pine Bluff facility from across South Arkansas.
And now that the opening of the Pine Bluff facility is nearing, Reilley said there is an excitement building in the economically beleaguered South Arkansas city concerning the renewable energy project.
“I have traveled around the world and around the country a lot, and there are so many people that care so deeply about Pine Bluff and they’ve been caught in a decline that has hit a lot of our smaller cities around the country,” he said. “But people (here) aren’t giving up and we are so happy to be a part of this and there are a lot of people at Highland that are working to be as engaged as they can in Pine Bluff’s renewal.”
HIGHLAND PELLETS HEADED TO EUROPE
Meeting Highland’s original forecast of a 2016 production start means the Pine Bluff plant will grow the nation’s wood pellet manufacturing capacity now at about 10.5 million tons per year, according to the U.S. Energy Information Administration (EIA).
Once fully operational, 100% of the Highland’s wood pellet production will be shipped to Europe. According to the U.S. Energy Information Administration (EIA), global production of wood pellets has increased significantly over the past five years, and demand in the European Union (EU) has led to international trade in this renewable energy source.
In July, Houston-based Zilkha Biomass Energy, which announced its project a few weeks ahead of Highland, said in July it will delay construction of a $90 million renewable energy project in Monticello because of hitches in obtaining long-term contracts for the sale of the company’s patented “black pellets” used in green power generation.