Live from Vancouver

November 18, 2014

BY Tim Portz

I’m in Vancouver wrapping up my 2014 conference season at Gordon Murray’s Wood Pellet Association of Canada annual conference. Gordon won’t approve of me adding his name as a prefix there, but no one can deny that he is a top notch spokesman and advocate for Canada’s wood pellet industry. This is my first time attending this particular event and I’m looking forward to the discussions that will unfold over the next day and a half. In particular I’m looking forward to learning more about market opportunities and production issues more common for Canadian producers. In particular I’m looking forward to today’s discussions about fiber supply and tomorrow’s closing panel that will feature presentations on the Asian market.

I’ll work hard to provide robust coverage of the event and I encourage all of you to watch the @BiomassMagazine and @TimPortz twitter channels as well as biomassmagazine.com for tweets and stories.

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I also wanted to offer a short list of industry stories and issues that are on our radar here at Biomass Magazine from a pellet perspective, in no particular order.

Pellets as Absorbents – I first heard about this market niche while doing a Q&A with a producer about a year ago. He offered that absorbents offered a nice year-round market opportunity that was certainly welcome as he looked to fill in his production calendar. Since then, I’ve heard multiple producers and industry vendors mention the absorbent market, as recently as Sunday night when I shared a cab with a major OEM. It seems, however, that our industry isn’t quite sure how to feel about this opportunity as the customer and application are a departure from the low-carbon heat and power value proposition the industry carries into the marketplace. Still, oil and gas drilling operations need absorbents and producers are taking these opportunities to fill in their production schedules. Expect a feature and survey on this in 2015.

Early winter and pellet supply – As I type this, my family in Minneapolis is waking up to single digit temperatures. Winter is hear and the heating degree days are starting to pile up. The chatter about supply started months ago and I look forward to seeing how the next four weeks play out as retailers work through inventories. Clearly, all of you are as well as my colleague Anna Simet’s blog “What’s Going on with Cordwood (or Lack Thereof)?” generated over 3500 reads in early October. 3500 reads puts that blog among the top 5 most read blogs in 2014. I know for a fact that east coast market activity is being felt all the way across the country and west coast producers are weighing the risks and rewards of taking these orders. The business is nice, but if it means shorting legacy customers, the business case is difficult to make.

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Big Box – Bully or Boon? – This feature continues to prove elusive. Big box retailers are a reality in our industry. Whenever I’m on the phone with producers I ask about their relationships with big box retailers. Usually, I learn that big bog retailers buy over half of a producer’s volume. In fact, the percentages are typically much higher than that. We just sent our December issue of Biomass Magazine to the printer and for the issue I wrote a story about pellet production at operating sawmill operations. Don Wagener of Appalachian Wood Pellets offered the most straightforward thoughts on big box I’ve heard in quite some time. Here is what he said:  “What I’ve had to deal with my whole life is ‘Where are the consumer dollars spent?’ And every year more and more of the consumer dollars are spent at those retailers and they are getting better and better at getting those consumer dollars. So for someone to go into this industry with the attitude that ‘I’m not going to deal with them because they are hard to deal with’, then they are going to lose.” My interest in writing a feature on big box retailers remains high. Anyone that can help me connect with someone at Home Depot, Lowe’s, or Tractor Supply can contact me. It would be very much appreciated.

Again, stay tuned as I tweet and post stories from the Wood Pellet Association of Canada 2014 Conference.

 

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