Once it’s officially up and running, Narragansett Pellet Co. hopes to produce as many as 12,000 40-pound bags of wood fuel pellets per day to meet hefty demand for the product.
Nearly every bag the company manufactures between now and June 30, 2007, is pre-sold, said Bill Carden, president and co-owner of the East Providence-based startup. The company will ship truckloads to distributors from Baltimore to Maine.
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“We hope that within a week, production will be in full swing,” Carden said in an interview last week. And by the first quarter of next year, he said, the company hopes to be making a profit.
It was no surprise to Don Kaiser, executive director of the Pellet Fuels Institute, that there was “another pellet manufacturer on the scene.” The national trade group says pellet stove sales in the United States more than doubled between 2003 and 2005, from 48,500 to 118,490.
Local retailers noticed a “dramatic” increase in demand for the pellet-burning stoves last year, said Simon Kavanagh, co-owner of the Fireplace Showcase in Seekonk.
“We had about 150 [pellet stoves] on hand,” he said. “They all went. We were turning people away because we didn’t have units to sell. I think everyone got caught by surprise.”
This year will be different, Kavanagh said. “We have ample supply.”
Kavanagh said the addition of Narragansett Pellet Co. will help eliminate a shortage of pellets that’s also been a problem for consumers. And having a local supplier will “cut costs for the end user,” by paring shipping distance and cost.
Meanwhile, 6-foot-high piles of sawdust and wood chips are waiting to be heaped onto more than 1,200 feet of conveyors, which will transport that wood waste through a system that leads to its eventual compression into wood fuel pellets at Narragansett Pellet Co.’s 75,000-square-foot facility in the Rumford neighborhood.
The company this year took out a $1,082,000 loan from the U.S. Small Business Administration for startup costs, said Marilyn Bogue, an SBA lender-relations specialist. Sovereign Bank provided a $1,500,000 loan, she said.
Carden said the company also has received support from the City of East Providence and the R.I. Economic Development Corporation, in the form of low-interest loans. It has created 35 new jobs in the state, he said.
This is Carden’s third startup. From 1964 to 1990, he owned and operated a saw mill in Massachusetts; then he worked as a consultant and in wholesale lumber. And that, he said, is when he realized how much waste saw mills generate.
But it wasn’t until he visited a pellet manufacturer in New Hampshire that he took an interest in wood pellets.
In lumber, he said, the only good market for wood waste is the paper industry, or farmers or landscapers who use it for animal or plant bedding. Often, mills just send their excess wood waste to landfills.
But the pellets that can be made from that waste are clean and clean-burning, according to the Pellet Fuel Institute. And the pellet stoves have an average efficiency of 87 percent – higher than for coal, fuel oil or natural gas systems.
So the pellets’ “green factor” appealed to Carden, he said, as did the strong market for them.
About 50 percent of the wood chips and shavings used to make Narragansett Pellet Co. pellets come from flooring and furniture manufacturers in Virginia, he said. The other half come from recycling plants and saw mills in the Northeast.
A 40-pound bag will cost about $6 per bag at retail, Carden said, and the average household will consume about 150 bags, or $900 worth, per year.
