Q&A: Maine’s Pellet Phoenix
Any small business person fears the type of phone call that Matt Bell, president and CEO of Northeast Pellets, received in late March 2009—a pellet mill he designed for a college independent study was engulfed in flames. After confirming that everyone had made it out of the facility unharmed, Matt began the tremendous task of bringing his operation back online. The new Northeast Pellets emerged from the ashes larger, more efficient and far less prone to destructive fires. Similarly, Bell emerged from the experience more convinced than ever about the importance of his pellet mill to the local economy. His peers in the region have taken note of his passion, and he was recently elected to serve as the vice president of the Maine Pellet Fuels Association.
You wrote your business plan for your pellet mill operation while still in college. Where did the idea come from initially?
I was taking classes at Northern Maine Community College and Husson College, working simultaneously toward my associate and bachelor’s degrees in business management. One of my final classes was small business management, and I opted to take it as an independent study, where we were tasked with writing a business plan. I chose to do mine on a wood pellets facility, as my parents had recently installed a pellet stove and I was intrigued by the newness of the industry. I had always been a hands-on kind of guy, working in all forms of construction, equipment operation and mechanics, as my father did. At this point, there was only one pellet mill in the Northeast, and a couple in Atlantic Canada and Quebec. I originally thought I’d build a hobby-scale mill, but quickly realized there were economies of scale to be had. I couldn’t build the facility too big, however, given our fiber basket, market range and the infancy of the industry. I spent hundreds of hours researching, drawing, designing and creating pro-formas. Before I knew it, I had a viable plan, and the next thing I knew, my father and I were at the bank pitching the idea. After talking to a couple of banks and looking at several potential sites, we secured a couple of Small Business Association guaranteed loans. We intended to build from a greenfield site, my father and I being partners on the operation and equipment, while a friend and I were partners on buildings and real estate. The folks at the SBA said my plan was one of the most thorough and well put-together plans they had seen, and needless to say, I got an A in the class.
You designed and served as the general contractor for the original mill and the one you built after your fire in 2009. Was your pellet mill the first industrial facility that you’ve designed?
Yes, this was my first industrial design. Up to this point I had only visited a few industrial facilities. I had been involved with the building of residential and commercial lots and roads, and had also done some building design, layout and construction, but certainly nothing of this magnitude. My father, primarily a millwright by trade, helped with the design, along with a good friend who owns a local equipment manufacturing facility, which is where we built much of the conveying and storage equipment. We still work with them regularly to this day.
You lost your facility in 2009 to a catastrophic fire. Can you talk a little bit about what went through your mind when the phone rang that March night?
The phone rang at 12:05 a.m., March 30, 2009. I had just gone to bed after my nightly check-in with the shift supervisor, and he was calling to tell me the mill was completely engulfed in flames. He continued to say they had tried to put it out, but were unsuccessful, and the fire department was on its way. My first question was “is everyone out and safe?” At this point, we were operating 24 hours per day, five days per week with a skeleton crew of three people at night.
Once the fire was extinguished, I was anxious to hit the ground running, perform site clean-up and prepare to rebuild. Unfortunately, the insurance company and some more recent investors had other plans. Things got delayed drastically, and valuable time within our short building season was lost. I have since separated from my partnership—prior to rebuilding—and the insurance claim has yet to be fully settled.
When you rebuilt, your design changed from the original. How did safety and fire abatement contribute to your design ideas for the new facility?
Safety and fire abatement were of the utmost concern. Our original design was made with accessibility for me and others in mind, with everything housed beneath one roof, on one level. Now, although the buildings are still accessible, but all seven of them, plus multiple external storage areas, are spaced out. We separated raw material storage, ground material storage, major process equipment, the control room, prebagged bulk pellet storage, the bagging facility, the maintenance shop, the break room and office. Every segment of the operation has been broken up, and many of the buildings are sprinklered and all are heavily equipped with fire extinguishers.
What was the most difficult part of your fire experience?
All of it. It was like a member of my family had died—the mill had been my baby, my life and my passion for nearly four years. I often joke that I am not married because I am married to the mill. Because our facility was a total loss, we not only had to reconstruct all of the buildings and equipment, we also had to rebuild all of our documents. Without proper documents, dealing with the insurance company was a nightmare. Through this, my partners and I decided to go our separate ways, and I immediately began rebuilding on the same site with my father, friends, family and employees by my side. This time, it was going to be bigger and better than before. All of those ‘Next time, I’d do it this way or that way’ thoughts from our first mill were integrated into our new design. As you might imagine, we have our share of some of those same thoughts after our build. Trust me, though, there will not be another ‘next time.’
Northeast Pellets makes a practice of experimenting with different feedstocks, including eucalyptus and Red Cedar. Why is feedstock testing a part of your operational plan?
We have experimented with several crops indigenous to our region in an effort to produce the best pellet possible, while supporting local farmers and reducing cost to the consumer. We have yet to find a wholly produced or blended pellet that can increase quality while maintaining or reducing costs.
The pellet export market seems to be exploding, with a 70 percent increase in 2012. Are you looking to tap into this market opportunity?
That is something that all of us here in Maine have been keeping a close eye on. I don’t foresee Northeast Pellets being able to capitalize on the export market from northern Maine, for a whole host of reasons. It is a great distance to our nearest port, and our fiber market is very costly compared to southern regions where eucalyptus and other fast-growing trees are available. The American Southeast is where I see the major players coming from, in regard to the export market. Although they have power reliability issues, fiber and labor are readily available on the cheap. Additionally, Northeast Pellets electrical rates are nearly three times the rate of our competition outside of the local utility grid. These major factors are why we plan to keep our focus on producing the best pellet possible—a super premium pellet with an ash content of half a percent or less, and a Btu value greater than 8,600 per pound. With that in mind, we plan on keeping our business right here in the Northeast, to help homeowners, businesses and institutional facilities cut their heating bills in half, while lessening their dependence on foreign oil.