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Special Focus
Loggers tap emerging biomass market
Wood pellet expansion planned in Marcell, second plant is proposed in Mountain Iron.
Business North
7/1/2007
by Wayne Nelson
There’s little demand for tamarack and pine pulp and loggers usually leave these species in the woods when they cut their
timber stumpage in northern Minnesota.
But these underused species — along with sawmill residues – burn hot and clean, and with processing into wood fuel
pellets, can help meet huge residential demand that’s emerged in Europe.
In response, a group of Northeastern Minnesota loggers has sealed a tentative deal to supply wood pellets to a major
European distributor.
They also are positioning themselves to tap a market for wood pellets in the Upper Midwest that’s expected to develop as
the full impact of permanently-high fossil fuel prices settles into the public consciousness.
Meanwhile, there’s enough demand from schools and businesses with furnaces that can use wood pellets for a phased
production ramp up on the commercial side, said Joann “Tink” Birchem, a familiar face in the region’s logging sector.
“There are a lot of people in the Upper Midwest who still don’t know about wood pellets,” she said. “We’re going to Europe
to get started.”
She and her husband Jerry operate Birchem Logging in Mountain Iron, one of the region’s largest logging companies.
The Birchems are founding members of Forest Management Systems Cooperative, a Northeastern Minnesota logger group
that was the first in the nation to become FSC-(Forest Stewardship Council) certified. The certification attests to
independently verified sustainable logging practices and the seal has become a powerful international marketing tool.
She also is chief executive of two affiliated ventures aiming to tap these emerging markets for wood pellets, Valley Forest
Wood Products, LLC and Mountain Timber Wood Products, LLC.
The first project would be a $3 million expansion of the Valley Forest sawmill in Marcell. The LLC acquired it earlier this
year. The second venture, would be an $8.5 million wood pellet plant to be built next to Birchem Logging in Mountain Iron. It
would operate as Mountain Timber.
The Marcell project is scheduled to begin in July with completion in August. Birchem hopes to start construction at the
Mountain Iron site by the end of summer and begin operating the new pellet plant in late winter.
The Birchems themselves are the majority investor in each of these limited liability corporations, and several of the co-op’s
members also are investors, she said.
Collectively, loggers and other silent investors with interests in the region’s wood products sector have contributed about
75 percent of the venture equity in the two LLCs. The European pellet distributor, CGC Biomass, based in Madrid, Spain,
holds the remaining 25 percent ownership, she said.
The equity investment in the two LLCs represents about 30 percent of the overall financing for the two wood pellet projects.
The LLCs are finalizing bank loans for the remaining 70 percent of project costs.
Valley Forest sawmill near Marcell in northern Itasca County closed after its proprieter died last year. Another firm leased
and ran it briefly. Valley Forest LLC acquired and modified it and began limited wood pellet production in May. Birchem said
production can continue through the construction period.
The expanded operation would have design capacity to produce 60,000 tons of pellets per year. Valley Forest is operating
with a single shift of five employees and will expand to 24/7 operation as demand warrants, she said. It is operating under
the old air quality permit granted to the previous owner by the Minnesota Pollution Control Agency. Birchem said the permit
adjustment required to operate at the higher production level should not pose a problem.
The new Mountain Timber plant requires a new air permit and Birchem hopes to have it in hand so bank loans can be
finalized by late summer and construction can begin.
Mountain Timber would be the larger of the two plants. Its design capacity would be 100 tons with first year production
estimated at about 80,000 tons. Partner CGC Biomass has committed to purchase 60,000 tons of wood pellets per year
until U.S. demand catches up with Europe, Birchem said. “I’m convinced this market will grow.”
Loggers tap emerging biomass market
Wood pellet expansion planned in Marcell, second plant is proposed in Mountain Iron.
Business North
7/1/2007
by Wayne Nelson
There’s little demand for tamarack and pine pulp and loggers usually leave these species in the woods when they cut their
timber stumpage in northern Minnesota.
But these underused species — along with sawmill residues – burn hot and clean, and with processing into wood fuel
pellets, can help meet huge residential demand that’s emerged in Europe.
In response, a group of Northeastern Minnesota loggers has sealed a tentative deal to supply wood pellets to a major
European distributor.
They also are positioning themselves to tap a market for wood pellets in the Upper Midwest that’s expected to develop as
the full impact of permanently-high fossil fuel prices settles into the public consciousness.
Meanwhile, there’s enough demand from schools and businesses with furnaces that can use wood pellets for a phased
production ramp up on the commercial side, said Joann “Tink” Birchem, a familiar face in the region’s logging sector.
“There are a lot of people in the Upper Midwest who still don’t know about wood pellets,” she said. “We’re going to Europe
to get started.”
She and her husband Jerry operate Birchem Logging in Mountain Iron, one of the region’s largest logging companies.
The Birchems are founding members of Forest Management Systems Cooperative, a Northeastern Minnesota logger group
that was the first in the nation to become FSC-(Forest Stewardship Council) certified. The certification attests to
independently verified sustainable logging practices and the seal has become a powerful international marketing tool.
She also is chief executive of two affiliated ventures aiming to tap these emerging markets for wood pellets, Valley Forest
Wood Products, LLC and Mountain Timber Wood Products, LLC.
The first project would be a $3 million expansion of the Valley Forest sawmill in Marcell. The LLC acquired it earlier this
year. The second venture, would be an $8.5 million wood pellet plant to be built next to Birchem Logging in Mountain Iron. It
would operate as Mountain Timber.
The Marcell project is scheduled to begin in July with completion in August. Birchem hopes to start construction at the
Mountain Iron site by the end of summer and begin operating the new pellet plant in late winter.
The Birchems themselves are the majority investor in each of these limited liability corporations, and several of the co-op’s
members also are investors, she said.
Collectively, loggers and other silent investors with interests in the region’s wood products sector have contributed about
75 percent of the venture equity in the two LLCs. The European pellet distributor, CGC Biomass, based in Madrid, Spain,
holds the remaining 25 percent ownership, she said.
The equity investment in the two LLCs represents about 30 percent of the overall financing for the two wood pellet projects.
The LLCs are finalizing bank loans for the remaining 70 percent of project costs.
Valley Forest sawmill near Marcell in northern Itasca County closed after its proprieter died last year. Another firm leased
and ran it briefly. Valley Forest LLC acquired and modified it and began limited wood pellet production in May. Birchem said
production can continue through the construction period.
The expanded operation would have design capacity to produce 60,000 tons of pellets per year. Valley Forest is operating
with a single shift of five employees and will expand to 24/7 operation as demand warrants, she said. It is operating under
the old air quality permit granted to the previous owner by the Minnesota Pollution Control Agency. Birchem said the permit
adjustment required to operate at the higher production level should not pose a problem.
The new Mountain Timber plant requires a new air permit and Birchem hopes to have it in hand so bank loans can be
finalized by late summer and construction can begin.
Mountain Timber would be the larger of the two plants. Its design capacity would be 100 tons with first year production
estimated at about 80,000 tons. Partner CGC Biomass has committed to purchase 60,000 tons of wood pellets per year
until U.S. demand catches up with Europe, Birchem said. “I’m convinced this market will grow.”
PRESS RELEASES
MSP Communications, 220 South 6th Street, Suite 500, Minneapolis, MN 55402
© 2007 MSP Communications, Inc. All Rights Reserved
Hoping for a Wildfire
Wood pellets for fuel are being made in Minnesota—but not many are used in the United States. A Spanish firm plans to help
change that.
October 2007 | by Chris Kelsey
“I could sell everything to Europe if I wanted to,” says Joann Birchem, co-owner of two northern Minnesota companies: Mountain
Timber Wood Products in Mountain Iron and Forest Valley Wood Products in Marcell. Birchem is talking about the wood pellets
that her companies produce. Using wood pellets for fuel is increasingly popular in Europe. But in the United States? “It’s
underutilized here,” Birchem says. “Big time.”
To develop the U.S. market, Birchem is working with a partner. A European partner. Madrid, Spain–based CGC Biomass, a
major distributor of wood pellets for fuel in Europe, has taken a 25 percent stake in Birchem’s firms. Birchem and CGC plan to
build the market here, then expand to Europe.
Wood pellets used for fuel are derived mostly from compressed sawdust. The low moisture content (6 percent or less),
consistent pellet size, and easy transportability are some of the reasons why the use of wood pellets is growing in the biomass
fuel market. But it’s their low cost and high performance that proponents most often point to. “With the efficiency of the wood
pellet BTUs,” Birchem asserts, “you’re often spending only half the money” of other common fuel sources.
“Soft woods actually offer more BTUs than hard woods in pellets,” Birchem says. Even more attractive, from a pellet producer’s
point of view, is that larger mill operations leave behind or mark as waste the soft-wood trees and tree byproducts, like tamarack
and pine pulp, used to make pellets. Pellet makers and mills aren’t competing for raw material.
Europe certainly has warmed up to wood pellets. “In Sweden and Denmark, they even use them to heat schools and
government offices,” Birchem says. “Those countries have done an incredible job of incorporating alternative fuel sources.” And
while wood pellet use is widespread in Europe, user nations are not all tree-harvesting countries. Italy “does not have a lot of the
right trees for this,” she says.
All this suggests a big overseas market for Minnesota pellets. Still, Birchem and her Spanish partner have chosen to focus on
the domestic market, given the immensely favorable production capacity and the growing interest here in alternative energy
sources.
Birchem believes that “it’ll take three years” to establish enough awareness of wood pellets as fuel in order to develop the U.S.
market. “After that,” she adds, “we can look more towards the international level.” (Such domestic consciousness raising wouldn’
t help only Birchem’s operations: There are actually about 60 pellet mills in the U.S.)
What should Americans know about this kind of fuel? For one thing, Birchem says, it’s not that different from existing heating
technology. “You don’t even need special venting on pellet stoves,” Birchem says. “It’s the same sort of venting you find on
common gas fireplaces . . . . And the cost is so often only half of what we pay for other fuels. That’s the kind of information we
need to make more known.”
The Forest Valley facility is currently undergoing an upgrade while producing pellets. The Mountain Timber facility is expected to
begin construction in October, with the plant due to come on line about six months later.
TINK BIRCHEM IS PART OF RECENT GRANTS FROM
EXCEL ENERGY
Tink Birchem signed on with the University of North Dakota to help develop a portable integrated indirect
wet biomass liquefaction system gasifier.
Xcel Energy announces renewable energy project selections.
University of North Dakota, Grand Forks, N.D., to demonstrate the performance of a mobile integrated
indirect wet biomass liquefaction system gasifier at one-fourth commercial scale, $999,065.
University of North Dakota, Grand Forks, N.D., to develop an economical biomass power system by
combining previous bench scale work in thermally integrated gasification systems with developmental
work on a low-Btu gas turbine, $999,728.
University of North Dakota, Grand Forks, N.D., to test and develop a novel biotechnology additive to
convert biomass into biogas, $970,558.
The integrated indirect wet biomass liquefaction system gasifier at one-fourth commercial scale will be
located at Birchems Marcell, MN wood pellet plant operations.
"This round of grants appropriately focuses on the goal of making solar and biomass resources more
cost-effectively available for Xcel Energy customers, which is entirely consistent with our state energy
policy goals," said Mike Bull, assistant commissioner of renewable development and advanced
technologies, Minnesota Department of Commerce, and Renewable Development Fund advisory board
member.
“The Renewable Development Fund provides research support for marketable advancement of
innovative renewable energy and environmental technologies that will benefit Minnesota customers as
well as promote renewable energy within the region, nationally, and worldwide,” said Bill Grant, associate
executive director, Izaak Walton League, and Renewable Development Fund advisory board member.
EXCEL ENERGY
Tink Birchem signed on with the University of North Dakota to help develop a portable integrated indirect
wet biomass liquefaction system gasifier.
Xcel Energy announces renewable energy project selections.
University of North Dakota, Grand Forks, N.D., to demonstrate the performance of a mobile integrated
indirect wet biomass liquefaction system gasifier at one-fourth commercial scale, $999,065.
University of North Dakota, Grand Forks, N.D., to develop an economical biomass power system by
combining previous bench scale work in thermally integrated gasification systems with developmental
work on a low-Btu gas turbine, $999,728.
University of North Dakota, Grand Forks, N.D., to test and develop a novel biotechnology additive to
convert biomass into biogas, $970,558.
The integrated indirect wet biomass liquefaction system gasifier at one-fourth commercial scale will be
located at Birchems Marcell, MN wood pellet plant operations.
"This round of grants appropriately focuses on the goal of making solar and biomass resources more
cost-effectively available for Xcel Energy customers, which is entirely consistent with our state energy
policy goals," said Mike Bull, assistant commissioner of renewable development and advanced
technologies, Minnesota Department of Commerce, and Renewable Development Fund advisory board
member.
“The Renewable Development Fund provides research support for marketable advancement of
innovative renewable energy and environmental technologies that will benefit Minnesota customers as
well as promote renewable energy within the region, nationally, and worldwide,” said Bill Grant, associate
executive director, Izaak Walton League, and Renewable Development Fund advisory board member.
Investors put their hope in wood pellets
Jane Brissett Duluth News Tribune
Published Monday, January 07, 2008
MARCELL — Tink Birchem believes she has a solution to high heating prices as well as all the pollutants they produce.
She and other investors are putting millions of dollars into making what they believe is the heating fuel of the future: wood pellets.
European countries are far ahead of the United States in use of pellets fuel. If Birchem’s new company, Valley Forest Wood Products, can’t sell
at home its 50,000 ton capacity, she’ll sell the pellets abroad, she said.
Eventually, though, she’s sure there will be a big market for them domestically. “The United States is going to catch on, but when?” Birchem
said.
Opening of the plant in Marcell is a new chapter for Tink Birchem and her husband, Jerry Birchem, who also own Birchem Logging of Mountain
Iron and are founding members of a logging cooperative, Forest Management Systems in Buhl. The investors include other loggers, family
members and a Spanish company. Tink Birchem is the company’s CEO.
Not the last
Valley Forest Wood Products began producing pellets on Dec. 29 and is the first of what Birchem expects will be several wood pellet
manufacturing plants. Already she plans to build an $8.5 million plant with a 100,000-ton capacity from the ground up in Mountain Iron.
Construction will begin when the state approves air quality permits. That plant will have a 100,000-ton annual capacity.
Both the Marcell plant, which was bought for $800,000 last summer, and the Mountain Iron plant are in tax-free JobZ zones. The Marcell
operation has been updated with $2 million worth of equipment since it was purchased. It has 13 people on the payroll working around the
clock and Birchem said wages are $14 an hour and up, with benefits.
Birchem also said she is close to an agreement on a Wisconsin location, with construction expected to begin this spring, and is considering
another Minnesota location for yet another pellet plant.
Her optimism about wood pellets stems only partly from their popularity in Europe. Price is a big selling point, she said. Calculations vary, but
there’s general agreement that wood pellets could reduce residential heating costs by as much as 30 percent to 50 percent when compared
with fuel oil and propane. A 40-pound bag of pellets from Valley Forest retails for $3.50 and a ton of bagged pellets is $175.
Proponents also point out that the fuel comes from a renewable resource. Premium pellets produce little ash and are considered “carbon
neutral,” meaning that the wood in them consumes carbon dioxide, a greenhouse gas, while growing and releases it when it is burned. The
Valley Forest pellets produce less than 1 percent ash.
The pellets are made of wood from sawmill waste and wood species that have no markets. Eventually, Birchem said, the plant also will take
excess biomass from logging operations. Nothing is added to the pellets, such as fillers or glues.
Birchem has plans to make pet bedding from waste wood and in 2009 Valley Forest will begin working with Xcel Energy and North Dakota State
University to experiment with making methanol from waste wood to generate electricity.
Good deal
Pellets burn at 80 percent efficiency — the same as fuel oil but slightly less than the 85 percent of propane, natural gas and kerosene. By
comparison, hardwood firewood burns at 60 percent efficiency. Wood-burning stoves create far more smoke and particulates, said Chris
Wiberg, chief operations officer of Twin Ports Testing in Superior. Unlike firewood, pellets are burned in a controlled environment that mixes
the fuel with oxygen to minimize emissions, he said.
Valley Forest will make pellets for both residential and commercial heating. Right now the market for pellets is mostly residential, but a special
residential stove, furnace or boiler is needed and the investment can be $700 to $4,000.
Commercial heating also is a potentially large market for wood pellet heating. The French River Hatchery, for example, has heated with wood
pellets since the early 1980s, according to Fred Tureson, hatchery supervisor. It also has a fuel oil boiler that it uses when oil is cheaper, but
that hasn’t happened for several years.
Although burning pellets takes more labor, such as cleaning out ash twice a day and doing further maintenance twice a week, it’s still cheaper
than fuel oil, Tureson said. Right now, the hatchery burns pellets 24 hours a day.
Valley Forest has contracts with several schools, a car wash and a YMCA, Birchem said.
Industrial boilers that burn coal often can be converted to burn pellets.
Interest high
Interest in wood pellet manufacturing apparently is high. “When you look at the cost of propane, which a lot of people use, pellets are a good
deal,” said Bill Berguson of the University of Minnesota’s Natural Resources Research Institute. “That’s what driving a lot of it.”
Valley Forest apparently is the only plant in Minnesota that is making fuel pellets from sawmill and useless wood. However, Elkhorn Industries
in Superior has been making wood pellets from industrial waste since the fall of 2006, said Erik Monge, the company’s president.
That plant uses pine, maple and oak shavings discarded by truss, molding, car part and cabinet-makers within a 150-mile radius, he said. It
produces 30,000 to 35,000 tons of pellets annually.
Advisers to the Kedco Group, based in Cork, Ireland, have talked with the Duluth Seaway Port Authority about suitable sites for a wood pellet
processing facility at the port and shipping the product to Ireland. Monge said last week that his company has been talking with Kedco to see
whether they could work together.
Great Lakes Renewable Energy Inc. of Rice Lake, Wis., expects to break ground on a $6 million wood pellet plant this spring along Highway 63
in Hayward Township. A group of loggers from Northwestern Wisconsin will own the plant, according to Herb Seeger, general manager. It is
expected to produce about 36,000 tons of pellets per year.
Minnesota Gov. Tim Pawlenty and his forest industry task forces have urged the industry to find innovative ways to add value to wood products
to lift up the depressed industry and Birchem said pellets are one way to do that.
Conditions are so depressed that some logging and related businesses are failing, prices are low and manufacturers are curtailing production.
That’s why Bill Jokela, owner of J&J Forest Products, invested in Valley Forest. “I could see no future in logging in the size of company I was
running,” he said. “I think [Valley Forest] is … an opportunity to make a living.”
International Woodfiber Report/January 2008
Pellets in Minnesota
An Irish energy concern has been reported investigating the possibility of developing a wood pellet mill
near Duluth, MN, which would consume about I million green tons/year of wood. A Minnesota
government official told IWR the company, Kedco Group of Cork, Ireland, is looking into environmental
permits for the facility. Kedco currently provides wood-burning heating systems for commercial and
residential applica-tions, with guaranteed fuel supply. The Duluth project would serve European
consumers exclusively.
To the north, two groups of investors spearheaded by Birchem Logging are involved in the development
of two wood pellet mills. One, located in Marcell, MN, is an existing operation purchased earlier this year
by Valley Forest Wood Products. The group will invest $3 million to increase output 20%, when it will
consume about 120,000 green tons/year of wood.
A second $8.5-10 million greenfield pel-let plant about 70 miles to the east in Mountain Iron will be built
by Mountain Timber Wood Products. A Birchem spokesperson told JWR the mill, which will consume
about 200,000 tons/year of wood, should be operational by fall.
The Birchem spokesperson said both facilities will use mostly tamarack and pine, "stuff the big mills don't
want. We hope to keep the output local for school,
business and residential use." However, a minority partner based in Spain may take some of the product
to European markets.
Part of the reason for developing the pellet mills, according to the Birchem source, is to "help the
loggers." Birchem is also part of a loggers' cooperative, Forest Management Systems, representing
several producers in northeast Minnesota.
Local news Minneapolis, MN
Minnesota company to make wood pellet fuel in Bayfield County
By / StarTribune
startribune.com
updated 11:30 p.m. CT, Fri., Jan. 25, 2008
ASHLAND, Wis. -
A Minnesota company has announced plans for a $7.5 million factory in Bayfield County to produce wood pellets used as
an alternative heating fuel.
Plans call for Superior Wood Products LLC to be built near Ino, about 14 miles west of Ashland, at the site of the former
Forest Fuels factory that has been out of business for some years.
The plant will employ 18 full-time workers and run 24 hours a day, said Tink Birchem, president and CEO of Valley Forest
Wood Products in Mountain Iron, Minn., and Mountain Timber Wood Products, which will operate the new facility.
She estimated as many as 90 additional positions would be indirectly created in local industries such as transportation,
distribution and retail.
According to Birchem, the market for pellet-burning stoves has been expanding because of the low operating cost, clean
burning properties and environmental friendliness.
The plant will make pellets from wood that otherwise is of little economic value, such as beetle-damaged pine, tamarack and
ash, she said.
Minnesota company to make wood pellet fuel in Bayfield County
By / StarTribune
startribune.com
updated 11:30 p.m. CT, Fri., Jan. 25, 2008
ASHLAND, Wis. -
A Minnesota company has announced plans for a $7.5 million factory in Bayfield County to produce wood pellets used as
an alternative heating fuel.
Plans call for Superior Wood Products LLC to be built near Ino, about 14 miles west of Ashland, at the site of the former
Forest Fuels factory that has been out of business for some years.
The plant will employ 18 full-time workers and run 24 hours a day, said Tink Birchem, president and CEO of Valley Forest
Wood Products in Mountain Iron, Minn., and Mountain Timber Wood Products, which will operate the new facility.
She estimated as many as 90 additional positions would be indirectly created in local industries such as transportation,
distribution and retail.
According to Birchem, the market for pellet-burning stoves has been expanding because of the low operating cost, clean
burning properties and environmental friendliness.
The plant will make pellets from wood that otherwise is of little economic value, such as beetle-damaged pine, tamarack and
ash, she said.
MOUNTAIN TIMBER
Firm to open local plant by year’s end
By CHARLES RAMSAY
Regional Editor
Published: Thursday, March 20, 2008 9:39 PM CDT
MOUNTAIN IRON …#8221; The Mountain Timber wood pellets group plans to start up a fourth wood pellet plant, one in Two Harbors, and
expects to have a plant operating in Mountain Iron by the end of the year.
About 24 new employees are expected to be hired at Mountain Timber in Mountain Iron by year’s end, and more workers are to be hired at
Minnesota Wood Products in Two Harbors when that plant is closer to start-up.
Tink Birchem, president and CEO of Mountain Timber, said Tuesday their company finalized purchase of the former Hedley Lumber business
last week in Two Harbors.
The company also is starting up a plant, Superior Wood Products, near Ashland, Wis., and Valley Forest Products at Marcell, Minn. The
Mountain Iron plant will have 100,000 tons capacity annually, while the Marcell plant is at 50,000 tons. All plants will be planned for 24-hour,
seven-days-a-week operation.
“We’re really excited,’’ Birchem said, of the Mountain Iron project, to be built north of the Laurentian biomass facility. “Our plans are to get
started this summer.’’
The wood products plants will be producing two major products: Wood pellets, compressed, mostly dehydrated pellets made up of under-
utilized tamarack, basswood and insect-damaged wood not usable for lumber; and “Barn Buddy,’’ sterile animal bedding pellets of wood that
reduce respiratory ailments by cutting wood sawdust and absorbing ammonia from excretions.
“Five years ago, wood pellets were not feasible,’’ Birchem explained, but several factors, including newer pelletizing machines, have changed
that. Costs for heating for fuel oil, electric and natural gas have “exploded,’’ and numbers of smaller sawmill operations making pellets as a
sideline have been closing up. A typical home in a cold winter can save a lot in costs by using hotter-burning wood pellets in a furnace or
stove at a cost of about $600 annually, while heating with fuel oil can cost three times that. “The bottom line is, you save a lot of money,’’ she
said.
Wood pellets are also cleaner burning, helping cut use of fuel oil exhaust. Pellets leave very little ash, and that can be used as garden
fertilizer. “Our moisture is down to 4 percent,’’ which creates much less ash, compared to firewood, Birchem said.
Their wood pellets, being produced now in Marcell, are used for heating four schools and other facilities in northern Minnesota.
Loggers interested in supplying product can contact Mountain Timber, and investment opportunities also are available.
An investment partner in Europe can take some of their product, but “our main goal is to stay in the area,’’ Birchem said. She allowed she has
been talking with the Duluth Seaport Authority about shipping.
Changing demand and higher energy costs seem to be creating opportunities, in helping boost biofuels, such as farmers’ production of
ethanol, and forestry’s use of less desirable byproducts for wood pellets.
“It feels like we’ve hit it at the right time,’’ Birchem said.
o
Charles Ramsay can be reached at charles.ramsay@mx3.com. To read this story online and comment on it go to www.virginiamn.com
Mountain Timber has better idea
Mt. Iron firm expands its wood product plants
Published: Thursday, March 27, 2008 11:49 PM CDT
Mountain Timber wood products officials are understandably upbeat about their prospects regarding new plants in Northeastern Minnesota.
As mentioned in an MDN news story last week, Mountain Timber plans to open a wood pellet plant in Mountain Iron by year’s end, adding 24
new jobs. The group also is looking to open up a similar plant in Two Harbors, though that is a bit further out. Two plants are looking to ramp
up, in Marcell, Minn., and near Ashland, Wis.
Company officials see the demand for biofuels and alternative, more efficient wood pellets as a product whose time may be at hand, as a
current product and possibly as a future economic and energy trend.
Certainly the start-up of wood products plants comes as a positive note in a down-time of uncertainty for the overall state timber industry,
after its meltdown several years ago. Some pulp or board-related plants in the region have closed, or started again at reduced levels, or
have closed yet again.
All in all, there are many positives to be seen in the Mountain Timber initiative: More jobs, helping the environment, cutting energy costs and
helping the regional timber industry in several ways.
Our hope is that area loggers will find these plants to be outlets for wood products in this timber down-time. Also, that area entrepreneurs will
continue to look at possibilities in other fields in ways in which Mountain Timber is showing how innovation can benefit everyone._
Firm to open local plant by year’s end
By CHARLES RAMSAY
Regional Editor
Published: Thursday, March 20, 2008 9:39 PM CDT
MOUNTAIN IRON …#8221; The Mountain Timber wood pellets group plans to start up a fourth wood pellet plant, one in Two Harbors, and
expects to have a plant operating in Mountain Iron by the end of the year.
About 24 new employees are expected to be hired at Mountain Timber in Mountain Iron by year’s end, and more workers are to be hired at
Minnesota Wood Products in Two Harbors when that plant is closer to start-up.
Tink Birchem, president and CEO of Mountain Timber, said Tuesday their company finalized purchase of the former Hedley Lumber business
last week in Two Harbors.
The company also is starting up a plant, Superior Wood Products, near Ashland, Wis., and Valley Forest Products at Marcell, Minn. The
Mountain Iron plant will have 100,000 tons capacity annually, while the Marcell plant is at 50,000 tons. All plants will be planned for 24-hour,
seven-days-a-week operation.
“We’re really excited,’’ Birchem said, of the Mountain Iron project, to be built north of the Laurentian biomass facility. “Our plans are to get
started this summer.’’
The wood products plants will be producing two major products: Wood pellets, compressed, mostly dehydrated pellets made up of under-
utilized tamarack, basswood and insect-damaged wood not usable for lumber; and “Barn Buddy,’’ sterile animal bedding pellets of wood that
reduce respiratory ailments by cutting wood sawdust and absorbing ammonia from excretions.
“Five years ago, wood pellets were not feasible,’’ Birchem explained, but several factors, including newer pelletizing machines, have changed
that. Costs for heating for fuel oil, electric and natural gas have “exploded,’’ and numbers of smaller sawmill operations making pellets as a
sideline have been closing up. A typical home in a cold winter can save a lot in costs by using hotter-burning wood pellets in a furnace or
stove at a cost of about $600 annually, while heating with fuel oil can cost three times that. “The bottom line is, you save a lot of money,’’ she
said.
Wood pellets are also cleaner burning, helping cut use of fuel oil exhaust. Pellets leave very little ash, and that can be used as garden
fertilizer. “Our moisture is down to 4 percent,’’ which creates much less ash, compared to firewood, Birchem said.
Their wood pellets, being produced now in Marcell, are used for heating four schools and other facilities in northern Minnesota.
Loggers interested in supplying product can contact Mountain Timber, and investment opportunities also are available.
An investment partner in Europe can take some of their product, but “our main goal is to stay in the area,’’ Birchem said. She allowed she has
been talking with the Duluth Seaport Authority about shipping.
Changing demand and higher energy costs seem to be creating opportunities, in helping boost biofuels, such as farmers’ production of
ethanol, and forestry’s use of less desirable byproducts for wood pellets.
“It feels like we’ve hit it at the right time,’’ Birchem said.
o
Charles Ramsay can be reached at charles.ramsay@mx3.com. To read this story online and comment on it go to www.virginiamn.com
Mountain Timber has better idea
Mt. Iron firm expands its wood product plants
Published: Thursday, March 27, 2008 11:49 PM CDT
Mountain Timber wood products officials are understandably upbeat about their prospects regarding new plants in Northeastern Minnesota.
As mentioned in an MDN news story last week, Mountain Timber plans to open a wood pellet plant in Mountain Iron by year’s end, adding 24
new jobs. The group also is looking to open up a similar plant in Two Harbors, though that is a bit further out. Two plants are looking to ramp
up, in Marcell, Minn., and near Ashland, Wis.
Company officials see the demand for biofuels and alternative, more efficient wood pellets as a product whose time may be at hand, as a
current product and possibly as a future economic and energy trend.
Certainly the start-up of wood products plants comes as a positive note in a down-time of uncertainty for the overall state timber industry,
after its meltdown several years ago. Some pulp or board-related plants in the region have closed, or started again at reduced levels, or
have closed yet again.
All in all, there are many positives to be seen in the Mountain Timber initiative: More jobs, helping the environment, cutting energy costs and
helping the regional timber industry in several ways.
Our hope is that area loggers will find these plants to be outlets for wood products in this timber down-time. Also, that area entrepreneurs will
continue to look at possibilities in other fields in ways in which Mountain Timber is showing how innovation can benefit everyone._
Seeing the Forest for the Trees
Joann (Tink) Birchem is a Minnesota logger and wood pellet manufacturer whose goal is to see wood-
pellet furnaces used as the primary source of heat for Minnesota and the Dakotas. With the rising
price of fuel she believes it’s a matter of economics that will soon be unavoidable.
By Timothy Charles Holmseth
Joann (Tink) Birchem says she “can see the forest for the trees.” In time, everyone else will see it too,
she says. Birchem and her husband Jerry, own Valley Forest Wood Products LLC and Birchem
Logging Inc., both in Mountain Iron, Minn.
Somewhere in northeast Minnesota, where thousands of trees dot the landscape, Tink Birchem saw
the forest that she believes holds the future of heating. That future is in the form of a small wood
pellet that burns hot and clean inside special furnaces. Eventually, everyone is going to need them
and the reason can be explained in one word—cost, Birchem says. As people struggle with rising
energy costs, they will take notice of the relief wood-pellet furnaces offer the pocketbook.
There is a noticeable price difference between the price of wood pellets versus fuel oil, and there’s no
getting around the outcome. “Wood pellets cost half of what fuel oil is right now,” Birchem says.
Despite the large price gap, the heating alternative has not had much of a behavior-changing impact
on consumers, a fact that doesn’t surprise Birchem. “I think it’s just a matter of educating the public,”
she says. “A lot of people don’t know about wood pellets.”
Americans don’t seem to be aware of the green-friendly fuel’s success in Europe. The informational
disconnect in the United States between the general public, and the option of wood pellets as a
source of heat didn’t always exist. “[Wood pellets] were actually invented in the late 1970s in the
United States,” says Christian Rakos, chief executive officer of proPellets Austria. “[Pellets] led a very
quiet life in small niches for two decades before a furious market development started in Europe.” The
growing use of pellets as a heating source in Europe demonstrates an awakening in this country that
can’t be ignored, Rakos says. “Sweden, Denmark, Austria, Germany and Italy have been growing on
the average of 30 percent to 50 percent per year during the past decade,” he says.
Gerald Brown, marketing director of Valley Forest Wood Products, says the success of pellets is a
proven fact overseas. “If you look on an [industry] map in Europe, you’ll see in 2005 there were 242
pellet plants listed,” he says. “That was back in 2005, there’s more than that now. When you look on a
map for 2005 in the U.S. you will see 60.”
Although the Europeans are ahead of the United States in terms of pellet use, it didn’t come on the
scene there until recently. “Generally speaking, not even one bag of wood pellets was sold in England
30 months ago,” he says. “Last year there was a million tons sold in all of the U.K.” The big difference
is in the behavior of the Europeans, Brown says. “It’s the difference in lifestyles.” Europeans have
always viewed the biomass resources that lie in their own backyards much differently than Americans.
“Biomass has been around a long time in Europe, in the consciousness of the country, and the
people who live there,” he says.
Brown credits Birchem for introducing the wood-pellet heating industry to northwest Minnesota. “Tink
Birchem was the first one to catch on in our area that biofuels are a big-ticket item because of what
she was hearing about in Europe,” he says.
Europe is a real-time demonstration of the promise wood pellets hold, and the country has proven
that it can very quickly become vibrant when economic conditions are optimal, Birchem says. “My
husband and I have been to Finland and Sweden five different times,” she says, explaining the
methodical economic utilization of lumber and forest products there. “They really work the tree. They
utilize every part. The tops and limbs they use for biomass.”
Even a cursory look at the numbers as one scans Europe to assess industry growth is an eye-brow
lifter, Rakos says. “Ireland is an example of how fast a market can be established by financial
incentives,” he says. Pellet-heating in Ireland was virtually nonexistent until March 2006, when a
program called the Greener Home Scheme was available.
Within a year 4,000 applications were received, and according to Sustainable Fuels Ireland, 1,900
pellet boilers, 240 central heating stoves, and 330 stoves were installed between April 2006 and
August 2007.
During her global travels, Birchem says she was able to fully process and appreciate how and why
people in other countries have been so successful with wood-pellet furnaces and heating. She
described one town she visited where a biomass plant was used to generate steam heat and hot
water to supply city buildings, including a hospital. “They call their forests “green gold,” she says.
Birchem’s observations of common-sense solutions and prudent use of the obvious and available,
lend themselves to the vision she has for Minnesota and the Dakotas. “It’s the least expensive thing
the Europeans have to make heat and electricity,” she says. “Sweden and Denmark are leading the
world in biomass generation of electricity.”
A speed bump to progress in the industry of wood pellets in the United States is subtle, but significant.
The idea of handling a bag of pellets can be seen as an unattractive and inconvenient prospect to
some Americans, Brown says. It has become a commonly
accepted state-of-affairs that Americans simply don’t want to deal with a bag of pellets.
Brown says the notion that using wood pellets would be an inconvenient task in someone’s day is
misguided; explaining how the process of heating this way in Europe is far past the log-cabin mentality
some may still possess. “Europe is already 10 years ahead of us on wood pellets,” he says, explaining
how the process has been modernized there. “They’re ahead of us to the point of delivery by trucks
that blow the pellets into holding rooms and tanks built in houses, with augers that automatically feed
a furnace, the same as fuel oil and propane.” He says. “A person fills up once a year, turns on the
thermostat and never touches anything again—it’s all automated.”
Birchem has incorporated automation technology into her optimistic plans. “There are furnaces
coming on line now where a truck would just come in and fill up your furnace with pellets, and with
another hose would suck out the ash,” she says. “That’s what they are doing in the Europe.”
Production and consumption at Valley Forest Wood Products for the time being is running quite
smoothly. “Wood pellets being produced right now are going to schools,” Birchem says. She says the
success of Minnesota schools utilizing wood pellets serves as a virtual mirror, albeit on a smaller
scale, of the success that is been experienced in Europe. Brown says he talked with the person who
handles the heating at the school in Goodridge, Minn., and learned the school was watching money
go up in smoke. “All fuels are calculated to compare the cost per million Btu (British thermal unit),”
Brown explains. “The school was paying $28.17 per million BTU’s,” he says. “Pellets would cost
$10.81 per million BTU, delivered. That’s almost a 65 percent savings to use pellets.”
The pellets are also more environmentally friendly than fuel oil, Brown says. “They are 92 percent
cleaner in particulates than cord wood,” he says. “That’s documented, both by a Swedish study and a
New Zealand study.”
Birchem’s desire to offer an economical heating alternative to the region is an ongoing process. The
company is constantly testing and improving its product. Although she admits she’s often frustrated
with some of the industry standards surrounding labeling and quality issues, stronger oversight is
something she pushes. “We test our pellets to make sure that we’re getting a premium pellet,” she
says. “A lot of manufactures say they have premium pellets and they don’t, and there are no
regulations to monitor this.” There is a significant difference between premium and standard pellets,
much of it relates to ash production. A furnace that isn’t made to handle a high percentage of ash can
get clogged, Brown says. “If [a company is producing] a standard pellet, they should say it’s a
standard pellet, and people should have to pay less for that,” Birchem says.
Birchem believes that Europe is proof that pellets are the heating fuel of the future. Although Europe
is fertile ground for sales and Valley Forest Products has business relationships firmly established in
Italy, Birchem doesn’t expect to export any product, yet. “If I make more pellets than what I can sell
here in the states, I can ship them to Europe and they will sell them there,” she says. However, she
would prefer that the forest resource be kept “here at home.”
Birchem says the industry she works in is fascinating and exciting, but it can be tiring at times. “I’m
heading to Atlanta today and then it’s on to [Washington] D.C.,” she says. As it is with pioneers, it
appears the enigmatic part of a person that is inclined to look back before going any further into the
great unknown, doesn’t exist in Birchem. Soft spoken, friendly, intelligent, matter-of-fact and worldly,
the girl, dubbed “Tinkerbell” by her father, has a picture in her head of the wood-pelleting industry,
and it most certainly isn’t make-believe.
Timothy Charles Holmseth is a Biomass Magazine staff writer. Reach him at tholmseth@bbibiofuels.
com or (701) 738-4962.
Valley Forest Wood Products
Wood pellets absorb urine, moisture in stalls
By CHARLES RAMSAY
Regional Editor
Published: Sunday, April 13, 2008 9:43 PM CDT
CHERRY — While winter may seem to be melting away, the barnyard set will still be staying indoors over the damp
nights ahead.
And, according to Karena Ersbo of Valley Forest Wood Products, the best thing to have in the stall for horses and
cattle is their Barn Buddy product.
“It controls the ammonia, which is harmful for their respiratory tract,’’ she said. Barn Buddy, wood pellets which absorb
urine and moisture, also are sterile, which helps in keeping stalls cleaner and good for horse bedding. It is produced at
Valley Forest Wood Products in Marcell, Minn., and is owned by the Mountain Timber group in Mountain Iron.
Made up of 50 percent pine and 50 percent aspen, Barn Buddy contains no binders or ends, and at 5 percent
moisture, can absorb lots of moisture than straw can that may be in the barn, Ersbo said.
The product works well with cattle, chickens, goats, geese, pigs and dog kennels. About 4-5 bags in a 10 foot-by-10
foot stall with a few gallons of water, makes the pellets open to up to four times their original size. Cleaning removes
very little of the material, and stalls can be stripped out every two to three months, compared to weekly, for regular
wood shavings. Straw and sawdust contain on average about 50 percent moisture, and don’t hold as well as the wood
pellets do. With low dust, and lower humidity holding down mold and bacteria, there is less chance for animals to get
lung congestion, she said.
Ersbo, sales representative for Valley Forest Wood Products, expects sales to expand to the upper Midwest, from North
Dakota and South Dakota to Minnesota, Wisconsin, Michigan, and eventually nationwide and overseas. Sales are
taking off now. “It’s going strong,’’ she said.
There are lots of horses, and horse people, on the Range, Ersbo explained. And going from homestead to homestead,
she said people have been receptive to trying out Barn Buddy. In one week recently, she sold more than five tons of
the material.
Local dealers carrying the wood pellets include L & M Fleet Supply in Mountain Iron, the New London Warehouse in
Virginia and Homestead Mills in Cook.
Wood pellets absorb urine, moisture in stalls
By CHARLES RAMSAY
Regional Editor
Published: Sunday, April 13, 2008 9:43 PM CDT
CHERRY — While winter may seem to be melting away, the barnyard set will still be staying indoors over the damp
nights ahead.
And, according to Karena Ersbo of Valley Forest Wood Products, the best thing to have in the stall for horses and
cattle is their Barn Buddy product.
“It controls the ammonia, which is harmful for their respiratory tract,’’ she said. Barn Buddy, wood pellets which absorb
urine and moisture, also are sterile, which helps in keeping stalls cleaner and good for horse bedding. It is produced at
Valley Forest Wood Products in Marcell, Minn., and is owned by the Mountain Timber group in Mountain Iron.
Made up of 50 percent pine and 50 percent aspen, Barn Buddy contains no binders or ends, and at 5 percent
moisture, can absorb lots of moisture than straw can that may be in the barn, Ersbo said.
The product works well with cattle, chickens, goats, geese, pigs and dog kennels. About 4-5 bags in a 10 foot-by-10
foot stall with a few gallons of water, makes the pellets open to up to four times their original size. Cleaning removes
very little of the material, and stalls can be stripped out every two to three months, compared to weekly, for regular
wood shavings. Straw and sawdust contain on average about 50 percent moisture, and don’t hold as well as the wood
pellets do. With low dust, and lower humidity holding down mold and bacteria, there is less chance for animals to get
lung congestion, she said.
Ersbo, sales representative for Valley Forest Wood Products, expects sales to expand to the upper Midwest, from North
Dakota and South Dakota to Minnesota, Wisconsin, Michigan, and eventually nationwide and overseas. Sales are
taking off now. “It’s going strong,’’ she said.
There are lots of horses, and horse people, on the Range, Ersbo explained. And going from homestead to homestead,
she said people have been receptive to trying out Barn Buddy. In one week recently, she sold more than five tons of
the material.
Local dealers carrying the wood pellets include L & M Fleet Supply in Mountain Iron, the New London Warehouse in
Virginia and Homestead Mills in Cook.