Enviva remains committed to Southampton
Published 11:51 am Thursday, November 30, 2023
Reports have surfaced that Enviva Inc., the world’s largest producer of sustainable wood pellets, is experiencing financial difficulties that could threaten its survival, but Enviva stated that it is executing a plan to get through this arduous time and that its commitment to the Southampton community, through its plant in the county, “remains undeterred.”
A Wall Street Journal report from Ryan Dezember stated that a “wrong-way bet on the price of wood pellets has jeopardized America’s biggest exporter of the fuel, even though demand has never been higher among the European and Asia power plants burning wood instead of coal.”
Dezember reported that Enviva “said its gambit to buy pellets from a customer and resell them for more, backfired when prices fell, and that nine-figure losses could trigger a default with its lenders by year-end.
“Enviva’s shares are down about 60% since it warned investors earlier this month that the trade risked its ability to remain a going concern,” Dezember wrote. “The stock, a market beater during the pandemic and last year’s European energy crisis, has fallen more than 97% this year and recently traded below $1.”
Enviva responded directly to The Tidewater News on Tuesday, Nov. 28, when asked for a response to the dire reports about the company, specifically honing in on the potential local impact to Enviva Pellets Southampton LLC and the Southampton community.
Enviva stated, “While Enviva recently reported disappointing third quarter of 2023 results and reduced expectations for fourth quarter of 2023 results, we are currently executing a transformation plan to get us through these challenging times and back to an acceptable level of profitability.
“This plan includes efforts to improve productivity and reduce costs related to our operations, which in relation to our Southampton plant, resulted in the permanent shutdown of an underperforming dryer line in order for the plant to operate more reliably and cost effectively,” Enviva continued. “Our commitment to the Southampton community remains undeterred, and we look forward to continuing to operate and invest in the community for many years to come.”
Franklin Southampton Economic Development Inc. President and CEO Karl T. Heck also expressed optimism about a continuing beneficial economic relationship between Enviva and Southampton County.
“It is our understanding that Enviva has had financial issues largely related to changes in commodity prices in a rapidly-changing world market,” Heck said. “Enviva is continuing to maximize the capability of its Southampton plant, which is in a prime location for production and shipment of their wood pellet products throughout the world. We continue to have regular contact with Enviva and look forward to having a strong partnership with them in Southampton County well into the future.”
Enviva Pellets Southampton LLC is located at 26570 Rose Valley Road in Franklin.