Wood pellet manufacturer considering IP mill

Published 9:24 am Wednesday, April 20, 2011

FRANKLIN—A wood pellet manufacturer is eyeing the possibility of bringing new life to the site of International Paper Co.’s former Franklin mill.

Franklin Pellets, a newly formed partnership between Multifuels L.P. and CMI L.P., said in a press release Tuesday that it proposes to build its plant in Franklin. Peter O’Keefe, a principal at CMI, would not say whether the company hopes to occupy the former mill site.

John Smolak, president and chief executive officer of Franklin Southampton Economic Development Inc., said Franklin Pellets has signed a letter of intent to use the mill.

O’Keefe’s business partner is former Virginia gubernatorial candidate Terry McAuliffe.

No one from International Paper could be reached Tuesday.

Mayor Jim Councill said the company had talked to IP about using part of the existing property, but that plans had not been finalized.

“I’m real excited about it,” Councill said. “It’s something we’ve all been hoping for.”

O’Keefe said the plant would help create new jobs in forestry, manufacturing and transportation and could begin operating in 18 to 24 months. He could not say how many jobs would be created or how much they would pay.

Smolak also said he didn’t know how many jobs might be created.

O’Keefe said Franklin’s location and talent pool makes it ideal for manufacturing wood pellets.

“Franklin is inside of a great wood basket, and one of the country’s busiest ports is less than 40 miles away,” he said.

There is a great potential for growth in the wood pellet industry because the European Commission has mandated that 20 percent of all power in European Union countries be produced from renewable sources. This means that coal plants in Europe will need to co-fire with wood pellets to stay open, he said.

O’Keefe said Europe has restricted resources and is focusing on production from the Southeastern United States.

“European countries currently use 11 million tons of wood pellets per year,” O’Keefe said. “We expect that market to grow to 100 million tons by 2020.”

O’Keefe also said he expects to see a growth in the domestic market, given the current market in Europe.

“We think Franklin is situated to participate in both markets,” O’Keefe said. “It’s an exciting business and it’s a growing business.”