Forestry downturn hurts pellet mill
2/16/09 | 16 comments

Forestry downturn hurts pellet mill


Ashland firm forced to lay off 9 because of shortages of raw supplies
By Julia Bayly
Special to the NEWS
BANGOR DAILY NEWS FILE PHOTO
Wood pellets.

ASHLAND, Maine — At a time when more and more Americans are looking for heating alternatives, a downturn in the northern Maine forest industry has forced a local wood pellet manufacturing plant to lay off nine of its 17 employees at the start of the year.

“This goes hand in hand with the layoffs at the Fraser mills in Ashland and Masardis,” Matthew Bell, president of Northeast Pellets LLC, said. “We had already lost a significant fiber supply.”

Last month Fraser Timber Inc. shut down its mills in Ashland and Masardis, where 201 people were employed.

Combine that with the closures of the Louisiana-Pacific mill in New Limerick and cutbacks at the Columbia Forest Products mill in Presque Isle and Bell says he has seen 70 percent of his wood fiber supply vanish.

“This is hopefully a short-term situation,” he said. “We are looking to diversify so we are not so dependent on one particular type of fiber.”

Since opening in 2004, Northeast Pellets has used dry hardwood sawdust, shavings and chips — byproducts of the northern Maine forest lumber industry — to produce 25,000 tons of pellets annually that are sold throughout New England and Atlantic Canada.

When oil prices soared to above $4 a gallon last summer, pellet stoves became a popular heating alternative, and there were concerns whether pellet supply could meet the regional demand.

Since then, Bells said he has seen a slight drop in the demand for pellets as oil prices have come down, but nothing that matches his own decrease in production, forced by the shortages of raw supplies.

Now Bell is researching methods and equipment to use green wood waste for his product.

In the meantime, he says the effects of his own layoffs are being felt countywide.

“We do a lot of business locally,” Bell said. “We’ve gone from producing 1,400 tons of pellets a month to around 400.”

That means Bell is buying fewer bags from a Presque Isle vendor in which to put those pellets, along with fewer pallets from another central Aroostook manufacturer on which to stack them.

In addition, Bell contracts all incoming and outgoing freight with local businesses.

“The spinoff of our layoffs affects all those workers,” he said. “It’s a huge ripple effect.”

Bell said the whole reason his company chose to locate in Ashland was its site at the end of Reality Road — the major artery leading in and out of the North Maine Woods — and the proximity to numerous lumber mills.

“When we were first open we were surrounded by mills,” he said. “Now there are maybe two or three left open.”

Bell said laying off those nine workers was the hardest thing he has ever had to do.

“To tell someone that they no longer have a job is hard,” Bell said. “Especially when it’s through no fault of their own and is definitely not reflective of them or their work ethic or the quality of their work.”

Not registered? Click here
E-mail this
Print this
Guidelines for posting on bangordailynews.com

Bangordailynews.com is pleased to offer a forum for readers to react to our stories, discuss them and provide additional information. We are reluctant to delete comments, but do reserve that right for those who abuse our forum. For more on using this site, please see our terms of service.

The primary rule here is pretty simple: Treat others with the same respect you'd want for yourself. What does that mean specifically? Here are some guidelines (see more):

Comments
16 comments on this item
On 2/16/09 at 7:26 PM, northwoodsguy wrote:         Repeated separate thumbs down will cause comment to be hidden

Keep your head up Matt! Love you and you PELLETS! Cleanest and Best Burning Pellets in the state!

For those of you who don’t know Matt, check out this video story that had been done last summer by WLBZ’s 207!

http://www.wlbz2.com/news/local/story.aspx?storyid=92755

Report abuse
On 2/16/09 at 7:40 PM, bumpinroad wrote:         Repeated separate thumbs down will cause comment to be hidden

when I first started burning pellets I was paying $2.60 a bag.....I was in a local store the other day and I see they are selling for $6.95 a bag....with the shutdowns and layoffs I don't even want to think of what the price will be next heating season...lucily I've saved enough over the years to pay for my pellet stove...so worst comes to worst I can always go back to oil...its a shame it really is..I hate having to use oil...give those money grubing oil companies any more than I have to...price of fuel rising at the pump...price of oil dropping on the market....oil companies making record profits...and they want to make record profits again this year...they know the consumers can't do anything about it so they just jack their prices and give us some lame brain excuse of refinery shutting down for maintanence...what a crock of BS...

Report abuse
On 2/16/09 at 10:01 PM, Knightscross wrote:         Repeated separate thumbs down will cause comment to be hidden

Always knew buying wood pellets would be a total rip off.. Glad I never fell for the wood pellet stove scam. They have been jacking up the price of pellets since day one. That's if you can even get them. Cheaper and more secure to burn Arab Oil.

Report abuse
On 2/17/09 at 7:41 AM, tiswhatitis wrote:         Repeated separate thumbs down will cause comment to be hidden

The CEO of the Ashland pellet mill is out of business because he does not return phone calls to loyal customers! TO BAD

Report abuse
On 2/17/09 at 8:24 AM, Keaulanti09 wrote:         Repeated separate thumbs down will cause comment to be hidden

Knightcross, I don't really think the pellet thing was a scam. I expected the price to go up from day one just because of the popular demand. I hope the pellets don't diminish because I stuck with my fuel furnace. Hopefully we will see the price of crude stay down, currently 37 dollars a barrel, 147 dollars last year. If you ask me fuel and gas prices are a scam.

Report abuse
On 2/17/09 at 8:43 AM, northwoodsguy wrote:         Repeated separate thumbs down will cause comment to be hidden

Bumpinroad: I sure hope that you didn’t pay $6.95 for a bag of pellets! ($347.50 / ton) That is rip-off and most likely done by the retailer! From what I am seeing throughout the state is a good consistant supply of pellets ranging from $238 a ton in Bangor area $240 a ton in the north and south with prices up to $289.00 anything more than that I really don’t understand.

Knightscross: Its more than supply and demand and “a scam” all prices have been effected by the increase in oil. Its not a "rip - off" when you can still burn pellets and save cash. Or is it? Look at your groceries, the cost of mail, and mostly plastic bags! Everything has gone up but takes much much longer to come back down than the volatile Arabic oil! Talk about a scam. OIL at $37 a barrel and dropping still over that last 2 weeks but yet gas at the pump has continued to climb? Somebody’s lining the pocket!

Tiswhatitis: Were you calling to sell Matt clean wood for his processing? If not then your statement doesn’t fit the article, but I lets see what kind of “loyal customer” you are. Were you calling to order mass quantities of pellets on a regular basis to be a reliable consistent customer? Or were you a fly by night’r who only wanted to sell when the market was hot and it fit your needs? Were you a customer who is the average homeowner trying to cut out the “middle man” and “save a buck”? Or did your loyalty end when another pellet manufacturer came along selling crap pellets for much less $ thus increasing your margin?

Report abuse
On 2/17/09 at 7:21 PM, jeepninthewoods wrote:         Repeated separate thumbs down will cause comment to be hidden

I am sure matt has bigger things to worrie about than product going out when there is no product coming in and he is laying poople off! i have been in the mill when it is in production. Matt goes out in the mill and works and doesnt allways have time to take calls! Matt is a great frend and is a great worker. He has made a great business and he has over come many challenges. The situation he is in isnt decause he cant sell his product its because he doesnt have the raw product coming in. Wish you the best matt.

Report abuse
On 2/17/09 at 7:35 PM, bumpinroad wrote:         Repeated separate thumbs down will cause comment to be hidden

heyyyy guy....I got a good price on pellets, it was under 200.00 a ton...bought early in canada....

Report abuse
On 2/17/09 at 11:39 PM, northwoodsguy wrote:         Repeated separate thumbs down will cause comment to be hidden

HEY BUMPINROAD! WAY TO SUPPORT MAINES ECONOMY!

Report abuse
On 2/18/09 at 10:11 AM, bumpinroad wrote:         Repeated separate thumbs down will cause comment to be hidden

HEYYY GUY....I KNEW THIS WAS COMING.....I'M JUST LIKE 99% OF THE PEOPLE LOOKING FOR A GOOD DEAL....CANADIAN PELLETS ARE SOLD THROUGH THE STATE...AND WHY NOT BUY CANADIAN.....WE CERTAINILY DEPEND ON THE CANADIANS TO SHOP OVER HERE...AND WHY ARE THEY CHEAPER IN CANADA THAN RIGHT HERE IN ASHLAND...ALWAYS BOGGLES THE MIND...I WAS IN CANADA YESTERDAY, ..I SEE THE PELLETS MADE IN ASHLAND ARE IN CANADA ALSO....SAME PRICE AS IN MAINE...$6.75 A BAG, RIDICULOUS...I WORKED IN A LUMBER YARD YRS AGO...THE OWNER BOUGHT PONDEROSA PINE FROM WASHINGTON STATE, DELIVERED TO HIS BUSINESS FOR LESS MONEY THAN OUR NATIVE WHITE PINE OUT OF ASHLAND..FIGURE THAT ONE OUT....DIDN'T BOTHER MY BOSS TO BUY OUT OF STATE....HMMM

Report abuse
On 2/18/09 at 10:57 AM, David889327 wrote:         Repeated separate thumbs down will cause comment to be hidden

Wood pellets, coal, oil - it's all derived originally from solar energy. When I look out my window, though, I see more trees than oil derricks or coal pits, and then I go down and dump another bag of pellets in the bin.

Report abuse
On 2/18/09 at 11:35 AM, northwoodsguy wrote:         Repeated separate thumbs down will cause comment to be hidden

BUMP… NAFTA is going to be the death of industrial US. When they get government subsidies on top of a 25% premium because of the exchange rate it is hard for the US to compete. Look at all of the lumber mills and paper mills they have all gone outside of the US both to the North and to the South.

Now, I need to ask, what are those same Canadian pellets selling for today at your US distributor? I have seen NE Pellets for sale locally for $239.00 per ton. I haven’t seen anything any cheaper state side. If there is please let me know as I may consider buying them.. NOT! Buy American, support local so we can all have jobs and pay taxes if not everyone will be living off of the system. You are going to pay for it one way or another, might as well do it up front and save the $$ on the backside.

Report abuse
On 2/18/09 at 1:23 PM, bumpinroad wrote:         Repeated separate thumbs down will cause comment to be hidden

Guy....I've always been in disagreement with NAFTA...but its there and until it is changed (if ever) it is a cause of a lot of problems....as far as I'm concerned the death of Industrial US has already happened...extremely hard to find anything made in the US, and if it is chances are the material used to make the product come from china....

I purchased my pellets right from a canadian supplier last may...I did the local callings first to see what they were selling for, anywhere from 219 a ton to 255 a ton..up about 10 dollars a ton over the previous year....I paid under 200 a ton and they delivered right to my house....my income is limited and I figure a few hundred dollars in my pocket is better than in the pocket of someone else..I haven't priced any since my purchase but did see them yesterday in two locales, as I said for 6.75 per bag....they had no ton price....I try buying local for the most part but there are limits....I would love to be able to buy all american made products also but near impossible.....I even refuse to go into walmarts, now talk about local....is there anything in walmarts that isn't made in some asian country...maybe some food but even wonder about that...

Report abuse
On 2/19/09 at 6:48 AM, tiswhatitis wrote:         Repeated separate thumbs down will cause comment to be hidden

i got MATT 3 retail markets 2 sell pellets in northern maine and those markerters were please with him when he was getting started then to big to fast he forgot who got him started.

Report abuse
On 2/19/09 at 8:31 AM, northwoodsguy wrote:         Repeated separate thumbs down will cause comment to be hidden

TIS: You did what? Does he still service those accounts or did he ever?? If not why? And, he needed your help? What’s your expertise background? Are you an angry retailer because there was a shortage throughout North America last summer and you didn’t plan ahead?

Report abuse
On 2/19/09 at 8:33 AM, northwoodsguy wrote:         Repeated separate thumbs down will cause comment to be hidden

BUMP: Point taken, well said. We as the US are our own worst enemy when it comes to enabling business and providing support. You are right, why should you pay 15 to 20% more just to by local

Report abuse
You must be logged in to post a comment. click here to log in.

Powered by: Creative Circle Advertising Solutions, Inc.