Steven-Gordon-WFD-Governors-Conference-Presentation
Download
Report
Transcript Steven-Gordon-WFD-Governors-Conference-Presentation
Governor’s Conference on Energy
Presentation
October 16, 2013
0
Table of Contents
Executive Summary
Wood Fuel Developers LLC Overview
Domestic Wood Pellet Overview
International Wood Pellet Overview
Wood Supply
Closing- Questions
1
Executive Summary
Wood Fuel Developers LLC (“WFD” or “the Company”) is an affiliate of ITAC Engineers and
Constructors, a fully integrated EPC contractor with over 300 employees. ITAC has been providing
services to support the development of Renewable Fuel projects for the past 8 years, in the Wood
Pellet, Ethanol and Biodiesel Industries and 25+ in the Fortune 500 Heavy Industrial Markets
Wood Fuel Developers has identified three market sectors with the immediate potential for significant
economic benefit that it intends to exploit in the initial phase of its operations:
International Wood Pellet Market – Already installed wood-burning systems, particularly in
Europe and Asia has created a shortage of wood pellets. Growing demand by European
utility companies has exacerbated this shortage.
Domestic Residential Wood Pellet Market - Increased demand for both wood pellets and
wood pellet stoves, combined with inconsistent supply has created increased demand from
“big-box” manufacturers and residential users in the Northeastern U.S.
Domestic Commercial Wood Pellet Market – As the economic and social justification for
wood-fueled boilers increases, domestic industrial demand for wood pellets will increase as
well.
2
Wood Fuel Developers LLC
Markets
International
Export
consumers
bagged and
bulk
Three (3)
MARKETS
FOR
WOOD
PELLETS
Domestic
commercial
consumers
business and
institutional
Domestic
residential
consumers
bagged and
bulk
3
Domestic Wood Pellet Overview
Consumption Predominately in the North East Markets
Seasonal – August-March (Highest Volume)
Big Box Stores have Credit (Low Price)
Many Outlets have little to no Credit
Credit Card and Pre-Pay?
Expensive to Truck to the North East
Rail has limitations - Increased Transportation Damage Risk
Distributors are Spread out.
1.5mm tons projected for 2013-2014 Heating Season
Many local “MOM and POP” Manufactures
4
International Wood Pellet Overview
Consumption Through-out Western Europe
10 years ahead of the US – ITALY consumes over 2mm tons and produces 30% less
Total European Bag Market is 5+ mm tons pellets
No Government Subsidies – Competes strictly on Price
Seasonal – June-March (Highest Volume)
Seasonal – April-May (Lowest Volume)
Many Distributors - Must go through Agents to supply Big Box Stores
Stand By LC is Difficult with Foreign Distributors
Trade Credit Insurance is Used to Provide Payment Terms
Payments Via International Wire Transfers
Understand Export Documentation
Understand Sea Container Movement
Raw Materials
Operational Threats and Mitigating Factors
Operational Threat
Raw material cost
Mitigating Factor
Draw feedstock from within a 60 mile
radius, minimizing raw material
transportation costs
Raw material availability
Locating production facilities within
affordable, sustainable, southeastern wood
baskets and developing relationships
Transportation cost
Sustainable and reliable low-cost shipping
capabilities – maximize shipping tons.
Existing competition
Current Wood Consumers
New competition from other wood product
companies
Companies have shown interest in
entering the wood pellet space due to
projected demand for the product but few
have shown the capability to develop
finance, build own and operate.
6
Closing-Questions
•
Greensville, VA – 100,000 Ton Wood Pellet Plant
Permitted and Ready to Go
Finalizing Wood Procurement
Finalizing Off-take Agreements
Finalizing Capital Investment
7