This is just the first of a few.... sad news. But events like this will bring supply back in line with demand. Keep in mind this is happening after record high prices. To me this indicated the $50-60 decline in box store prices is simply a purge. These prices will be the low. As i said before mills just cant produce low enough and sell to a dealer for that dealer to be able to sell @ $4.00 per bag. This next fall will be very interesting! Business Opportunity: Production of Wood Fuel Pellets Company Specializing in the Production of Wood Fuel Pellets SUMMARY · Trebio Inc. (“Trebio”) was founded in 2007. Since 2011, it has specialized in the production of wood fuel pellets to supply the residential, commercial, industrial and institutional markets in Canada, the United States and Europe; · Trebio operates a production plant on the site of the former Smurfit-Stone pulp mill in the Outaouais community of Portage-du-Fort; · Trebio is the tenant for the plant which was set up at a cost of $16 million; · The plant has an annual production capacity of 130,000 metric tons. The Company’s assets mainly consist of: A wood pellet production line, including a “TDT” wood drying system and a packaging line; A line used to break down wood chips; Equipment, tools, automotive equipment and rolling stock; Inventories consisting mainly of logs, wood shavings and saw dust; Trebio’s rights, titles and interests, if any, including the company’s name, phone number, website and trademark. SALE PROCESS Raymond Chabot inc. (“RCI”) is seeking offers to purchase the business and its assets, in whole or in part; This business opportunity is part of the receivership action against the Company’s assets under the aegis of the Bankruptcy and Insolvency Act; The proposed transaction(s) may be structured in different ways so as to meet the objectives of the buyer or the seller. DEADLINE Tenders must be submitted at the Receiver’s office, located at 600 de la Gauchetière Street West, Suite 2000, Montreal, Quebec no later than Thursday April 28, 2016 at 2:00 p.m., at which time the Receiver will cease accepting offers. NEXT STEP For more information, please refer to the Call for tenders. For more detailed information please view our PDF: Licenced Insolvency Trustees.
It is/was Trebio. If the common wisdom is everybody used 1/3 less volume this year and by my rough calculation we lose 15-20% of the production selling into that market( based on shut downs and other mills not being able to ship in there due to reduced prices) whenhe glut is gone it will get interesting. Good thing is the pigs will be warm and cozy, but what about the other 95% that goes day to day season to season. Anyone got a crystal ball I can borrow?
Ok, we have seen many ups and downs over time. Truth is this whole thing has been brought on by a slump in the world economy and the decline of the prices of fossil fuels. So long as there are market swings, their will be winners and loosers. One example of the reasons I always support keeping your options many. The most protected group are the firewood group because so many of them are dependent only on their own initiative. We pellet burning folks can temper the swings by being pellet pigs. Most of us have no means to stock up on oil, gas, or electricity.
What I find interesting is that the article says they also supplied the European market. I thought that was supposed to be where pellet mills were turning to for making a better profit (at least that was the buzz last year)? I'm certainly going to try to earn the title of pellet pig this year. Will have to build a shelter, or, at the least buy a big tent / car port since I can only store 6 tons inside and I already have that covered (plus and extra ton or two as of yesterday's delivery).
One would think the export mills would be more stable than the mills that only dabbled in the residential market. You would think they would have had a better chance, Something telling me there were other factors involved. Most likely investors didn't see enough profits or growth and might have just decide to cut the loss and severe the cord. Without the money backers, Many companies wither and dry up. Honestly haven't seen much Trebio, Mcfeeters or Boundary Bay in my area since 2014. IIRC they also had some quality issues that couldn't have help matters much in their residential venture.
Theres never been a bigger profit in export. I believe the profit margin has actually narrowed over the years due to competition for feedstock. I'm guessing you gleaned that from a handful of pellet jockey noitalls over at Dirth.com. Twas a big topic for some time.
Hopefully a bigger player with a better business model snatches the place up on the cheap and gets it running again.
i'm told that the bulk pellet export market is soft as well, at least for the supplier i spoke with, due to a weak Euro.
Maybe Trebio isn't a major supplier, but then neither was the German owned facility in the southeast. But it does demonstrate that a worldwide energy crash puts on the industry. The major investor in Trebio, Abellon Clean Energy, was also a major investor in Okanagan. Don't know what it means but this is one large institutional investor throwing in the towel on pellets in North America.
You could not be more right. Export demands volume. 2 ways to make money large volume, low margin OR large margin, low volume. The biggest problem for pellets is logistics. you can have a low fob mill price but freight is a major component of the delivered price, These days figuring out logistics are as important as the manufacturing component. When prices were high everyone wanted access to New England. But many of the Southern mills produce an inferior ( industrial pellet) and it would not fly in New England. The western mills also want to penetrate the market but i can't elaborate much more than that as I have non disclosure agreements that i have signed.
One problem with large volume and exporting is if an entire ship load gets rejected it could put you out of business in a hurry. It seems like it would be difficult to not meet industrial quality specs, but it could happen. And, you would need to have complete trust in the buyer that they wouldn't pull a scam like that. A ship load of pellets is a major investment.
I'm sure they are QC batch tested every 100 tons or so. I would imagine the quality parameters are pretty lenient. Those boilers could burn anything if sized correctly. Brokers and escrow is involved in most if not all overseas shipments to control the $. Many of the big exporters are owned by the power generator they supply.$ prolly doesn't even change hands.
someone will pick up that Trebio plant for an attractive price, sit on it for a spell waiting for the market to turn around. oil will go back up at some point, at $36 now, and pellets will continue to be a viable, stable, eco-friendly, fuel. no one backs their butt up to the oil furnace in the basement to warm up! shocking to us hoarders, there are a lot of pellet users out there who pick up pellets for the week, or a ton at a time, and have no stash. their finances will not permit them to stock ahead. yes, the pre-buy guys (or pre-reserve in my case) will order a ton less this spring due to additional stock on hand, and the hoarders will be full (but they always are anyway).
Theres still a little wiggle room to shake out in the price of raw material for those mills sourcing from sawmills.Maybe it will be enough to compete with oil. Those chipping low grade logs are kinda screwed as theyre held hostage by stumpage pricing and logging cost of production. Raw material pricing is gonna take awhile to shake out as there is some higher $ material already produced and on the market. At $199 its close to the cost of production to market as it is. In the late 90's I watched the price of sawdust skyrocket and literally saw fights at mills for it. I even had my contracted sawdust bins that were locked broken into. Will be interesting to see how it plays out. The sawmills may get some karma for playing favorites and catering to pellet mill suppliers over farmers. To think at one point many years ago I got paid to haul sawdust out of flooded mills.
