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From mothballed…to pellet producer

Rentech Inc. has invested $90 million to convert two mothballed Ontario forest products plants to produce wood pellets using a state-of-the-art stationary flailing and microchipping system from Continental Biomass Industries.

By Tony Kryzanowski

Rentech Inc., a new entry in Canadian wood pellet manufacturing, is investing about $90 million to acquire and convert two mothballed wood processing facilities in northwestern Ontario to produce wood pellets to supply customers in both the domestic and international markets.

Rentech has a history primarily as an American nitrogen fertilizer producer. But the California-based company has became a major player in wood processing and wood pellet manufacturing as a way to diversify its business so that is it is not so dependent on the highly competitive and seasonal fertilizer business.

In May 2013, it acquired Georgia-based Fulghum Fibers, which provides wood chip processing services in the U.S. and South America. Following that acquisition, Rentech acquired the mothballed oriented strandboard plant in Wawa, Ontario from Weyerhaeuser for $5.5 million, and an idled particleboard plant in Atikokan, Ontario from Atikokan Renewable Fuels for about $3.8 million, with the intention of converting them both into wood pellet manufacturing facilities.

“Beginning with the Wawa pellet facility, which will be our largest pellet plant, and together with our Atikokan project, Rentech is on track to become the largest producer of wood pellets in Eastern Canada,” says Hunt Ramsbottom, Rentech President and CEO. They are grateful to have the backing of Ontario and the province’s Ministry of Natural Resources to support their investments, he added.

Rentech has secured Crown fibre supplies for both the Wawa and Atikokan plants from the Ontario government and anticipates that it will consume about 180,000 tonnes of fibre in Atikokan and another 880,000 tonnes at its Wawa facility.

The Wawa plant will produce about 450,000 metric tonnes of wood pellets annually with full commissioning expected this fall. It has a 10-year contract with Drax Power Limited in the United Kingdom to deliver 400,000 tonnes of wood pellets annually beginning at the end of 2014. The power company produces about 4000 megawatts of power at the largest coal-fired power plant in the UK, where it is currently converting three of its six generating units to burn woody biomass fuel.

The Atikokan plant will produce 90,000 metric tonnes of wood pellets annually with commissioning expected this summer. Rentech has a 10 year contract to supply Ontario Power Generation (OPG) with 45,000 metric tonnes of this production, with the option that OPG can increase its demand to 90,000 metric tonnes. OPG is in the process of converting its Atikokan power station from coal to wood pellets, and will require about 100,000 tonnes of wood pellets per year.

All told, the Wawa plant is expected to create 30 full-time jobs and create or support 150 forest industry jobs within surrounding communities. The Atikokan plant will create 25 full-time jobs and support 50 jobs in the forestry sector.

The company is finding synergies between its two wood processing-related businesses as two 170’ electric radial log cranes were purchased for $8 million from Fulghum Industries for use at the Wawa pellet plant for wood yard management.

Locally-based Canadian companies have been contracted for the construction work in both Wawa and Atikokan.

One investment that Rentech has made is in a state-of-the-art, stationary flailing and microchipping system developed by New Hampshire-based Continental Biomass Industries (CBI) that will eliminate a step in the wood pellet manufacturing process.

Typically in the past, a pellet plant used a drum debarker, followed by a disc chipper and then hammer mills to manufacture properly-sized material for consistent drying. CBI says that its system consistently produces higher quality material at substantially lower capital expenditures, maintenance and total power consumption costs with its microchip system.

Steve Roberts, Managing Director for Rentech Canada, says they worked with AgriRecycle to investigate various options for their front end operations. AgriRecycle, a developer and owner of several pellet plants themselves, had first-hand knowledge of CBI’s systems, having operated one of the company’s 6400 machines with a microchip rotor that fed its Ozark Hardwood pellet plant for years.

“We had the chance to see the CBI front end in operation at other facilities,” says Roberts. “It offered what we felt was the most efficient way to get the size breakdown required at the front ends of our projects. We believe that the front end, with the CBI system and particularly the way that we have arranged our larger Wawa facility, will be a very efficient front end.”

He says Rentech’s two Ontario plants will process primarily unmerchantable hardwoods—specifically, aspen and birch, but will also accept small diameter, higher value softwood species and lesser used softwoods such as balsam fir, cedar, and tamarack.

The system developed by CBI will consistently produce six to eight millimetre microchips that can be fed directly into the dryer. It eliminates the need for a hammer mill step after the debarker, which typically is used to reduce the green wood fibre to a size that optimizes dryer efficiency and leads to high quality wood pellets.

Continental Biomass Industries says operating its equipment in cold climates such as northwestern Ontario is not a concern; CBI has a number of its units operating in northern Scandinavia, and the system in some aspects actually works better processing frozen logs, says the company.

While the system developed and manufactured by CBI for Rentech is customized, Matt Skinner, Stationary Systems Manager at CBI, says it has potential applications in many other similar wood pellet facilities and is a type of microchipping technology that the company has been “preaching” about for quite some time because of its ability to eliminate a costly step in the pellet manufacturing process.

“By building a machine upfront that can size that material really precisely into a small size, it keeps the capital expenditure down on the whole line and keeps the power consumption down from doing an added grind before you dry it,” says Skinner. He added that the Rentech contract is CBI’s first opportunity to really demonstrate its microchipping technology in a large scale application, proving that it can be accomplished without a power consuming, hammer mill step.

The system consists of a feed conveyor, two-roll flail debarker, and a 1200 horsepower CBI Magnum Force 8400 stationary chipper with five-pocket microchip rotor. It is capable of producing about 120 tons of microchipped material per hour. Two CBI flail and microchipping systems will be installed in Wawa and one in Atikokan. The company is also supplying a Grizzly mill to grind bark at the Atikokan plant to the proper size for use as boiler fuel.

When construction is complete and it is commissioned this fall, Rentech’s Wawa plant will produce about 450,000 metric tonnes of wood pellets annually. The Atikokan plant, which is expected to be commissioned this summer, will produce 90,000 metric tonnes of wood pellets annually.

Skinner says CBI has developed similar portable, diesel-powered flailing and chipping systems that are currently operating in places world-wide, but they have a maximum horsepower output of about 1000 hp. The dual electric drive units that are being installed in Wawa and Atikokan can run at up to 1200 hp, or deliver net about 25 per cent more power than the portable units.

He adds that the company’s experience operating its portable flailing and chipping units in other installations proves that the stationary systems developed for Rentech will deliver the chip consistency required by the company in its pellet plants. A 50’ feed conveyor outside of the buildings feeds individual 50’ to 60’ logs through the flailing and microchipping units, which are stationed inside the pellet plant buildings. This conveyor system is considerably longer than typically used with CBI’s portable units. The system is capable of processing wood from 3” to 30” in diameter.

“The key is to make a uniform size chip with even lengths that dries evenly, and that allows everything else downstream to become more efficient and more cost effective,” says Skinner.

He says operating the equipment in cold climates is not a concern as CBI has a number of its units operating in northern Scandinavia, and the system in some aspects actually works better processing frozen logs.

In terms of the surplus pellets that Rentech will produce at both Wawa and Atikokan, it will look for buyers and is depending upon independent industry reports that predict that global demand for wood pellets will reach 50 million tonnes by 2020. That is three times the current global demand.