Viridis Energy Ceases Operations at its Okanagan Pellet Company Plant 2016-04-05 19:44 ET - News Release (via Thenewswire.ca) Vancouver, BC / TheNewswire / April 5, 2016 - Viridis Energy Inc. ("Viridis" or the "Company ") (VRD.V ) (TSXV:VRD) today announced that due to recent structural concerns at its Okanagan Pellet Company ("OPC") plant and a combination of factors, including the increased capital investment necessary to restart wood pellet production at that location, it has decided to cease operations at its West Kelowna, British Columbia plant. Despite substantial upgrades over the past ten months, additional requirements from local authorities regarding dust management together with the recently discovered structural challenges of the building, operating the plant safely would require significant additional capital outlays. The Company has determined that such expenditures are not economically feasible in the current market environment. The Company will work with OPC's creditors to determine the best course of action, including, but not limited to, the potential sale or joint venture of OPC, a sale or liquidation of those related assets, or the relocation of that facility in its entirety. Company Contact: Michele Rebiere Chief Financial Officer Viridis Energy Inc 905-847-5226
What a shame, I feel for the factory employees and know alot of consumers love the product too. Guess it's a reality check that so many businesses run on a small profit margin. I hope all the Okie people fare well
So I take it unless another company purchases them there will be no more Okanagan's on the market? or at best, same product under a different company/ name? 1st Blazers, now Okies.
That makes two big names...... And who knows how many dealers are dumping pellets next year. Let's hope it doesn't get much worse.. Dan
Or, they relocate to a defferent facility (which is mentioned), tho, it wont happen overnight. In which case, they could come back after a year or more.
I think they are under a very deep financial strain, unless they get more investor money......who knows.
The mill they closed was the original Okanagan mill..... But this mill hasn't produced much in the past 2 seasons anyway. They have had another mill filling the red platinum bags which is in close to the mill that closed. AFAIK, Viridis is still in operation and have several(lots and lots) tons back logged in the Upton plant. And they still have access to another mill(name slips me right now) in the same region as the Okanagan mill. Plus the golds are made in Georgia and bagged in MA(Upton plant)... Okies DF are made by Bear Mountains and nagged at the MA plant as well..
This is certainly not news anyone wants to hear...but this isn't as bad as it seems. There are 3 different brands of "Okies" which the Kelowna plant produced one. We have grown pretty quickly over the last few years and our product is made in several locations. The Okanagan brand isn't going away, now or in the future. You will still be able to get your favorite pellets, from you current suppliers and quite frankly, I doubt the public will see any difference in supply what so ever. Our industry is going thru a rough period, but I have no doubt we will make it thru...but it probably will be a bumpy few months. I think every pellet manufacture in the East has either shut down for the time being or cut way back till we see signs of improvement down the road. Our industry is subject to the up's and downs of mother nature and other competitors, so some years are great and others, maybe not so much...but the pellet industry is here to stay and we certainly plan to be part of it. None of us wants to see any plant go down...for whatever reason, but this last winter as many have mentioned was a challenge for most and we have to handle that as best as we can. Want to help support the industry?....then go out and buy a couple of tons of your favorite brand...even if it costs a few more bucks than current heating oil prices....down the road you will be glad you did....tks
Good post... thanks for jumping in here today.. on a side note: I noticed that the Energex main site does Not show the Premium Golden Hardwoods anymore.. just the reg hardwoods and Canadian Softwood blend... wondering if the Golds are out of Production..
There will be more challenge's ahead for other pellet mills. Unfortunately given the circumstances of no winter and falling oil prices, consolidation was bound to take place.Unfortunately it happened to some of our favorite brands. The reason okanagan was such a powerful brand was Doug. who has been the face of the company for many years. He does a great job at servicing his dealers and providing a quality product. I, for one, am glad you will be continuing on. it' sound like you're okay. It must have been a rough few months with all this going on.
Virdis Energy appears to be a highly leveraged company with debt equal to nearly half of gross sales. (09/30/2015 being the latest report I could locate quickly). Negative cash flow, negative book value, and a crashing (penny) stock value (down 36% to 14 cents today). I am not picking, they make a fine product and are most likely a great group of hard working people. I think the company is probably representative of the industry and why it will not look the same in a year or two. Another winter with oil prices deflated will probably lead to some major dislocation of regional under capitalized mills regardless of their product quality. They are going to be forced under by creditors whose notes and interest payments come due, or by capitalists who are unhappy with red ink. It is really too bad that these companies did not listen too their customers about price relative to oil and how it would effect sales. Had they done so instead of steaming all head adjustments might have been made that although reducing profits this season may well have mitigated financial damages. If the debt is obligated to be supported by a stock price floor (common with small companies) this may be the first chink in the dam.
