Enligna Canada turns to Continental Biomass Industries for help addressing an issue with their raw material preparation in its pelletizing operation.
“Green” is the hot fad right now, and everyone is jumping on the bandwagon. But Enligna Canada has been green since long before green was the “cool” thing to be. This past year, however, when the company developed a challenge in its pelletizing operation, they turned to Continental Biomass Industries for help addressing an issue with their raw material preparation. CBI was able to provide the help Enligna Canada needed, and now the company is back on track.
Enligna Canada traces its green roots to Europe, where the company began.
“Enligna is a group of private equity investors based in Berlin, Germany,” said Enligna Canada President Fraser Gray. “The investors’ background is in renewable energy, particularly solar. In the process of discussing other renewable resources, they decided to become involved in wood. So in 2007 they started a company called Enligna AG and became heavily involved in a green field investment in Germany; they hooked up with a sawmill partner and started making pellets and green electricity.”
At about the same time, the parent company Enligna started exploring options in both the U.S. and Canada.
It shifted focus to eastern Canada, and a company called Mactara Lumber, which was one of the largest lumber facilities in eastern Canada and the largest in Nova Scotia. In late 2007 and early 2008, the company was in trouble and was in the process of a complete and painful financial restructuring.
“Mactara Lumber had decided to get into pellets very early in the game, back in 1998,” Fraser said. “Originally it did that to get rid of the residual byproduct from its sawmill.”
Enligna saw Mactara’s financial troubles not as a problem but as a very interesting market and a good investment opportunity. So, in April 2008, Enligna bought the assets of Mactara Lumber and set up Enligna Canada. Then about a year ago, Enligna sold off its German green field operation and put its focus on Enligna Canada.
“At that time we were in the process of expansion talks here,” Fraser said, “so it was good timing. They were able to help us get things going here at a faster pace than any of us originally had thought.”
By last September all the plans were laid, and everything was in place for Enligna Canada to undertake the expansion that they had carefully worked out.
“A pivotal part of that expansion was trying to make better use of the huge boiler and dryer that we have,” Fraser said. “We did that by tweaking both the front end and the back end of the pellet mill.”
The pellet mill, as it existed under Mactara Lumber, was constructed in 1998, said company vice president Andy Wright.
“The plant was operating at a capacity of about 85,000 tons of annual production,” Andy said. “Much of the production historically was bark, because the plant was founded as a solution for excessive amounts of bark that the sawmill generated.”
On the front end of the mill is a live floor infeed system that moves raw material to a conveyer that feeds the Jeffrey Hammer Hog.
“The purpose of this is primary breakdown,” Andy said. “It takes the material to approximately ¾-inch in size. Adjacent to that is another feed system that feeds a GTS 70 million BTU wet fuel furnace. The wet fuel furnace provides the heat to the dryer for drying the material prior to pelletizing.” Over the course of a year, the furnace uses about 30,000 tons of bark, so quite a bit of biomass goes into keeping the system operating.
The system pulls heat directly from the furnace into a MEC three pass rotary dryer.
“That’s our drying chamber,” Andy said. “We pull the heat into that chamber at the same time the Jeffrey Hog dumps material into the inlet side of the dryer. In the three passes it makes through the dryer, it goes from an average moisture content of 45 to 58 percent to approximately 6½ to 7 percent.”
Next, the material goes through a de-stoning process to remove any contaminants, mostly small rocks and related material.
“From there, the material goes to be hammered,” Andy said. “Currently we run two Andritz Sprout 500 horsepower dry hammer mills. Once the material is hammered, it’s augered to five Andritz pelletizers, which are housed in a separate building.”
Fast forward to the recently completed expansion, that took place beginning last September. At that point, the fiber supply that Enligna Canada had available for its pellet process had considerably diminished.
“The sawmill was no longer running, which was a very large fiber supply,” Andy said. “The same thing was true of other mills around the area. As the activity of those sawmills decreased, we found the need to go to a raw material source other than bark. What we went to was basically the whole tree, which we chipped and introduced through the infeed of our system.”
However, this created a problem with the infrastructure as it had historically existed in the mill.
“The problem was that we couldn’t get the chips small enough,” Andy said. “The chips were ¾ inch to an inch in size, but further reducing the size of chips and reducing the size of bark are two totally different things. Bark is softer and breaks down very easily, as opposed to hardwood and poplar, which is what we’re dealing with.”
Not only is whole tree material more difficult to dry, Andy said, it also takes a lot more horsepower to break it down in the hammer mills to a size that can be pelletized and meet the company’s customers’ requirements.
“We set about to find a machine that would solve that problem,” Andy said. “When we get into a 100 percent whole tree run, we’re consuming upwards of 50 to 60 tons an hour, and we needed a machine that would generate that kind of volume for us.”
Company officials learned of a CBI chipping machine that they thought might be what they were looking for that was in operation at a site in Massachusetts, and made arrangements to go see it in operation.
“We talked to Aaron Benway at CBI, and he arranged for us to go to the facility, which was taking hardwood roundwood and chipping it to about a 3/8-inch size,” Andy said. “We viewed both that machine and a couple of others, but the CBI was the only one we saw that would give us both the size and the volume that we require.”
Andy and other company officials liked what they saw in the CBI equipment.
“It made a nice, small chip,” Andy said. “The owner of the machine that we viewed was happy with its performance. The cost to manufacture was where we wanted to see it. We also talked to one of the customers who was using the end product to make pellets, and he said it was doing exactly what he required it to do.”
As a result of that trip, Enligna Canada purchased a CBI 6400T Magnum Force Series self-propelled track machine with a 4-pocket chipping head on it, which produces a micro chip with a ¼-inch to 3/8-inch fiber length.
“It is equipped with a Cat 1050 horsepower engine,” Andy said. “We’re able to get a size chip that allows us to increase our productivity by putting anywhere between 60 to 100 tons through it. It has enabled us to increase the throughput of the materials through our hammer mills and therefore increase production. We’re also able to run our dryer temperature anywhere from 6 to 10 percent lower than what we previously did, because the material is smaller and easier to dry. This saves on fuel.”
At the front end of the operation, Enligna Canada also added equipment that made handling raw materials easier.
“We bought a Liebherr 904 log loader that works in tandem with the CBI unit,” Andy said. “On one shift, it only takes one person to operate both those machines.”
Andy said the company is very happy with the way the CBI equipment was installed and fits into Enligna Canada’s operation.
“The machine arrived in late August and CBI sent someone to make sure everything was ready to go,” Andy said. “His name was Frank Monroe, and he knows those machines inside and out. He taught our operators everything about it. CBI has good service people, and if there are any issues with the machine, they’re just a phone call away and they’re very helpful. They understand the importance of this machine to our process, and that we need it running every day, so they’ve been very accommodating about making sure any issues are taken care of as quickly as possible.”
Enligna also made changes at the back end of the operation, where pellets are produced.
“The other part of our expansion was to increase our pelletizing capacity,” Fraser said. “We added a fifth pelletizer, so we added 25 percent to our production capability there. We also upgraded and modernized our cooling system; the old system was bottle necking us just a little bit.”
Looked at from the point of view of processing costs, Andy said, the front end expansion has resulted in considerable savings.
“To process a ton of chips that we need for our pellet mill used to cost about $17,” Andy said. “Now it costs about $5 per ton.”
The benefits don’t stop there, Fraser said.
“Now we take that material—which is in a form much better suited for pellets—and it goes through the pellet process at a greater rate,” he said. In addition, the company is burning less of their resources for fuel.
“So on the production side, there are several savings,” Fraser said. “This is a win-win for us in many ways.”
Overall, Andy said, the bottom line has been lower production costs and a greater volume of pellets produced.
“What that means is that we can keep running our business,” Fraser said. “When you look at some of the other things going on in the wood world, this may mean survival.”
To put it in perspective, Andy said, the company’s previously best production year in the past nine years was 83,000 tons.
“We plan to produce upwards of 105,000 tons during 2010,” he said. “We’re already seeing that we can do that. We had record production in the 4th quarter last year, and the first two months this year have been the best January and February ever as well.”
What all of this does, Fraser said, is put Enligna Canada into the pellet production game.
“The pellet market is a very interesting economic model right now,” he said. “There’s a huge demand for pellets, but the market for them has fallen since the economic crisis and the price is down. The other thing is that the goalposts have tightened on us. I sure hope this isn’t a permanent thing, but the value of the Euro has made our customers’ currency very weak. Most of our production goes to Europe, and where in most of 2009 we could go to the bank and exchange one Euro for $1.57 to $1.60, it’s now trading at $1.37. That’s a 13 percent reduction in revenue with no correlation to reduction in cost. That has nothing to do with the pellet market or with pellet production.”
All of the economic issues underscore the importance of the expansion Enligna Canada undertook last year.
“It’s good that we took those steps, because we put ourselves into the game for even this kind of a year,” Fraser said. “We aren’t very happy with the economics right now, but our investors are believers in this process, because this is a very competitive form of alternative energy. So we’ll be here when the economic situation improves.”
