Forestry downturn hurts pellet mill

Posted Feb. 12, 2009, at 9:16 p.m.
Last modified Feb. 13, 2011, at 11:01 a.m.

ASHLAND, Maine — At a time when more and more Americans are looking for heating alternatives, a downturn in the northern Maine forest industry has forced a local wood pellet manufacturing plant to lay off nine of its 17 employees at the start of the year.

“This goes hand in hand with the layoffs at the Fraser mills in Ashland and Masardis,” Matthew Bell, president of Northeast Pellets LLC, said. “We had already lost a significant fiber supply.”

Last month Fraser Timber Inc. shut down its mills in Ashland and Masardis, where 201 people were employed.

Combine that with the closures of the Louisiana-Pacific mill in New Limerick and cutbacks at the Columbia Forest Products mill in Presque Isle and Bell says he has seen 70 percent of his wood fiber supply vanish.

“This is hopefully a short-term situation,” he said. “We are looking to diversify so we are not so dependent on one particular type of fiber.”

Since opening in 2004, Northeast Pellets has used dry hardwood sawdust, shavings and chips — byproducts of the northern Maine forest lumber industry — to produce 25,000 tons of pellets annually that are sold throughout New England and Atlantic Canada.

When oil prices soared to above $4 a gallon last summer, pellet stoves became a popular heating alternative, and there were concerns whether pellet supply could meet the regional demand.

Since then, Bells said he has seen a slight drop in the demand for pellets as oil prices have come down, but nothing that matches his own decrease in production, forced by the shortages of raw supplies.

Now Bell is researching methods and equipment to use green wood waste for his product.

In the meantime, he says the effects of his own layoffs are being felt countywide.

“We do a lot of business locally,” Bell said. “We’ve gone from producing 1,400 tons of pellets a month to around 400.”

That means Bell is buying fewer bags from a Presque Isle vendor in which to put those pellets, along with fewer pallets from another central Aroostook manufacturer on which to stack them.

In addition, Bell contracts all incoming and outgoing freight with local businesses.

“The spinoff of our layoffs affects all those workers,” he said. “It’s a huge ripple effect.”

Bell said the whole reason his company chose to locate in Ashland was its site at the end of Reality Road — the major artery leading in and out of the North Maine Woods — and the proximity to numerous lumber mills.

“When we were first open we were surrounded by mills,” he said. “Now there are maybe two or three left open.”

Bell said laying off those nine workers was the hardest thing he has ever had to do.

“To tell someone that they no longer have a job is hard,” Bell said. “Especially when it’s through no fault of their own and is definitely not reflective of them or their work ethic or the quality of their work.”

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