Drax increases stake in U.S. pellet plants
July 26, 2021 | 1:36 pm CDT
Drax Group

US/Canada/UK - Drax Group announced plans to acquire a 20 percent minority interest in Alabama Pellets LLC for $29.7 million cash consideration in a deal with The Westervelt Co. The deal is expected to be finalized by the end of July and will increase Drax's interest in Alabama Pellets to 90 percent.

Drax's acquisition earlier this year of Canadian-based Pinnacle Renewable Energy Inc. included a change of control provision over Alabama Pellets. The remaining joint venture partner, Two Rivers Lumber Co. LLC, holds a 10% economic interest.

Alabama Pellets has plants in Demopolis and Aliceville. Drax said the increased stake in the company will provide it with economic control over a further c.130,000 tonnes of biomass production capacity per annum; the Demopolis and Aliceville, Alabama, operations have a combined nameplate production capacity of 660,000 tonnes per annum. Aliceville was commissioned in 2018 and Demopolis is expected to be commissioned in 2021.

Drax Group has 13 operational pellet plants, including Aliceville, plus satellite plant developments and Demopolis, with a total nameplate production capacity of 4.9 million tonnes per annum once commissioned. The facilities are located in British Columbia, Alberta and the Southeast United States.

In May, Drax also announced plans to invest $40 million build a trio of “satellite” wood pellet plants that will create 30 jobs in rural Arkansas.

Headquartered in the United Kingdom, Drax operates a portfolio of sustainable biomass, hydroelectric and pumped hydro storage assets across four sites in England and Scotland. The North American pellet plants also supply Drax customers in Europe and Asia. The Drax Group employs 3,400 people in the UK and North America.

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Karen Koenig | Editor

Karen M. Koenig has more than 30 years of experience in the woodworking industry, including visits to wood products manufacturing facilities throughout North America, Europe and Asia. As editor of special publications under the Woodworking Network brand, including the Red Book Best Practices resource guide and website, Karen’s responsibilities include writing, editing and coordinating of editorial content. She is also a contributor to FDMC and other Woodworking Network online and print media owned by CCI Media. She can be reached at [email protected]