Peterson Flail and Chipper Get Arkansas Plant Up and Running
By Tim Cox
PINE BLUFF, Arkansas — Highland Pellets recently started up its new plant to produce wood fuel pellets for markets in Europe. Peterson Pacific has been a key supplier for the new mill, along with parent company Astec Industries, with its machines providing the feedstock the plant needs pending completion of its permanent chip mill.
Highland Pellets, headquartered in Boston, was founded by Tom Reilley, who was a senior managing director for former investment banking firm Bear, Stearns and went to London in 2002 to set up and head the company’s wealth management division. He later left the company to form an investment firm and private equity fund but exited his stake in 2012 and returned to the U.S.
Tom was approached by Rob McKenzie, now managing director for Highland Pellets, in 2011 about the business opportunity presented by the wood fuel pellet industry. Rob worked in the United Kingdom wholesale power market for 16 years and had considerable experience in renewable energy, energy trading, and developing new business opportunities. For example, he established a U.K. power and gas trading desk in London for U.S.-based global conglomerate Cargill.
Another key member of the Highland Pellets team is Alex Adome, director of finance, who previously worked with Rob at Cargill, where he held various roles in its energy enterprise and a wholly-owned hedge fund. His duties at Highland Pellets have included financial modeling and business development support.
Highland Pellets chose Astec as a principal supplier because it manufactures most of the pellet facility equipment itself, ensuring compatibility in all segments of the production process.
After research and securing a location, financing, and contracts with markets for its production, the company chose Wagner Construction to build a plant near Pine Bluff, Arkansas. Wagner completed the project within 18 months — on time and under budget.
“We have built a strong team that has exceptional expertise in energy markets, risk management, project finance, construction and forestry,” said Rob McKenzie, managing director.
The production facility is located on 203 acres. Most of it is in the open except for the pellet mills, a workshop, and an office building. All the conveyors and wood fuel for the furnace are enclosed. Most of the site is occupied by a two-mile, double-loop rail track that enables the company’s pellets to be delivered in bulk form to the Port of Greater Baton Rouge in Louisiana for shipping to Europe. Fifty people work at the mill, but that number will increase to 68 once it is in full production by year’s end.
The plant began production in December. When it reaches full capacity, it will be able to produce about 600,000 metric tons of pellets annually. All of its production is under contract to be supplied to markets in Europe.
Management’s strategy has been to partner with best-in-class companies to reduce or eliminate as much risk as possible in the supply chain, from tree to delivery of pellets. Highland Pellets chose Astec as a principal supplier because it manufactures most of the pellet facility equipment itself, ensuring compatibility in all segments of the production process. Other suppliers may source different parts of the production process from different companies and subsequently try to make the interfaces compatible.
Astec also uses a modular design. Each production line will produce about 150,000 metric tons annually, and the Pine Bluff plant has four of these lines. The modular design enables a faster route to market, less risk, and much greater security of supply; if one production line goes down, the other three can continue. There is no single point in the manufacturing process that would stop all production if there was a critical failure. For example, another plant may be out of production for weeks if the drying system goes offline.
Some individual machinery and equipment was supplied by other well-known names in the industry. Progress Industries equipped the plant for processing round wood. Hammermills were provided by Schutte Buffalo, and the pellet-making equipment was supplied by Andritz.
“What makes the Pine Bluff facility different is the design concept in how this equipment is structured,” said Jody Doak, plant manager. “Astec has designed the facility with four independent lines, which means redundancy and reliability.” That redundancy keeps production downtime to a minimum.
Redundancy is even built into each production line. For example, four pellet mills are required for each line for full production rates, but five pellet mills are supplied. The spare gives the plant the ability to maintain optimum production with minimal negative impact should a piece of equipment fail.
“While we cannot have a spare for every step of the process, Astec has done a great job at identifying areas more prone to production challenges and designed around it,” said Jody.
Peterson supplied two key machines to get the plant up and running. The wood yard was not completed until after two production lines began operation; it was scheduled later to allow enough space for delivery and construction of the Astec equipment.
“Once the mill was largely built we could finish off building the cranes for the wood yard,” explained Jody. “This meant that we needed a short-term solution to processing wood prior to completion of the wood yard.”
“Using the Peterson equipment for our debarking and chipping needs has given us the ability to generate the needed fiber for start-up…while we await the completion of our permanent chip mill. The equipment has been reliable and versatile in the sense that we can move it around the wood yard as needed to maximize the storage space on the ground.”
In the wood fuel pellet industry, the trend has been to use microchips — tiny chips ranging from ⅛-inch to ⅜-inch — for feedstock in the manufacturing process.
Peterson manufactures flails, chippers, grinders, screens, stacking conveyors and other equipment. Peterson drum chippers have proven themselves in capacity and reliability for applications for high production of uniformly sized microchips in the field. In addition, the portable equipment is an effective back-up for on-site pellet mill chipping if a mill chipper is down for maintenance or repairs or the mill requires additional chip production.
Peterson’s knife assembly setup guide for 6 and 12 pocket drum chippers recommends a particular combination of the Peterson chipper knife with a Peterson counter knife and shim (if required) in order to produce chips ranging in size from ⅛-inch to 1 inch. All Peterson chipper and counter knives are manufactured with an A8 Modified Steel, which is heat-treated to balance hardness for maximum abrasion and impact resistance. The cutting surface maintains a razor-sharp edge throughout multiple chipped loads and then is re-honed and re-babbitted, extending the service life of the knives.
The Peterson 4300B drum chipper is Peterson’s mid-sized drum chipper, with both a smaller and larger version available depending on customer’s. It is designed and built for high-volume biomass producers that use a wide variety of material, from logs up to 26 inches in diameter to brush and small wood.
The Peterson 4300B is powered by a Cat C18 765 hp engine. It utilizes a 36-inch diameter, 40-inch wide drum with wear resistant AR450 wear surfaces on the drum pockets and shell. A sloped feed deck makes feeding the chipper easier. Optional material sizing bars and chip accelerator minimize oversize twigs and branches in the chips. Traditional babbitt type knife systems are standard. Chip length can be changed from ¼-inch to 1-¼ inches by adjusting knife extension and feed speed.
The Peterson 4300B features a new generation of controls that includes Peterson’s high-production Adaptive Control System. The new control panel provides self-diagnosis for faulty sensors and open circuits, and fault indicators make troubleshooting easy. The control panel features an LCD display that provides the operator the complete engine and system parameters to simplify set-up and efficiently operate the machine.
Highland Pellets buys logs 40-45 feet in average length. They are unloaded from trucks with a log crane or portable equipment. The crane feeds logs to a drum debarker; bark is discharged and conveyed to a storage silo for eventual use as fuel in a drying system, and debarked logs are moved to the chipper.
Chips are conveyed to one of two storage areas and later gravity-fed into two 500 hp Schutte Buffalo hammermills to reduce the wood fiber to granular size. The material goes through a pre-dryer and dryer to reduce moisture content to 12-14 percent, then is fed into two Astec 600 hp hammermills and pneumatically sent to a storage silo. Bottom screws move the wood particles to the pelletizer feed conveyors.
As indicated above, each production line has five Andritz pellet presses, although only four presses are used at any one time with the fifth held in reserve as a spare to be used in the case of maintenance on another unit or an unplanned stoppage. The extruded pellets are conveyed and moved via bucket elevator to an air cooler surge bin, and the temperature is reduced to 10-20 degrees above ambient temperature. The pellets are then conveyed to the rail loading hoppers.
While there is always room for improvement in any project, Highland Pellets has been happy with the progress of the mill to date,” said Jody. “As we continue to commission and optimize each line, our expectation is further improvements on production and process efficiencies.”
The wood yard is scheduled to be fully operational in June. Until then, the tasks of debarking and chipping round wood will continue to be done by the diesel-powered Peterson flail and drum chipper.
The plant makes use of every bit of wood material; none of it is wasted. As noted above, bark is used for fuel for the furnace that provides heat for the drying process. “This means that we use all the wood that is delivered to site and ensures we minimize our carbon footprint,” observed Rob McKenzie. “We don’t use fossil fuels for drying.” The plant also may use additional supplies of hog fuel to supplement its collection of bark.
“Once the mill is at full production, we may also look to add mill residuals such as sawdust and wood shavings into the production process,” added Rob. “This will provide an outlet for waste materials from sawmills and again ensures that all parts of the tree are being put to good use.”
Pellets are transported by ship to the United Kingdom and are used as a substitute for coal to fuel power stations. “Even after allowing for the energy used in the pellet production process and all of the transportation emissions in moving the pellets to the U.K., the carbon saving from burning our pellets will produce around 75 percent less CO2 than if the power station had burned coal instead,” said Rob.
Because of the industry’s dependence on subsidies, one of the biggest challenges is regulatory and political turbulence across the globe that impacts pellet markets more so than conventional energy sources, according to Rob.
“Lack of market liquidity, foreign exchange volatility, spot prices below cost of production, and high sustainability standards make for a highly competitive market,” he said. The future supply of the industry needs to evolve through cost reduction, enhanced safety practices, consistent reliability, and the highest standards in pellet quality and sustainability standards. We are working with all our stakeholders on all of these aspects. Our success is tied to our people and the culture we have built and need to defend.”
Highland Pellets already is studying options to replicate the Pine Bluff plant and expand at other locations. “Our strategy has been to locate within the best fiber baskets of the Southeast next to strong logistic chains to the ports,” said Rob. The company is actively exploring sites in Stephens, Arkansas, and Enterprise, Mississippi, and is pursuing permitting requirements.
“The decision on which site will be constructed and when depends on securing an off-take contract and the customer preference for which port we use for export,” said Rob. “Another strong consideration is the local workforce.”
“Highland Pellets is passionate about caring for the environment, being a reliable partner, and providing a positive force for change in the areas we live and work,” concluded Rob. “Our vision is to provide exceptional service to our customers, partners, and co-workers. Our future growth will continue to be disciplined in timing, using best-in-class partners, and a professional risk management approach across the supply chain.”