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
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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
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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.
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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
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