Highland Pellets LLC said Wednesday that it has reached a $135 million capital partnership with Orion Energy Partners LP to fund the expansion and upgrade of its wood pellet facility in Pine Bluff.
Completed in 2017, the Highland plant supplies wood pellets used as fuel for renewable electricity production at a converted coal power plant. The company has a long-term contract with a European power producer.
The expansion, which Arkansas Business reported in August was coming, entails:
- Reconfiguring the facility’s current footprint to accommodate new equipment;
- Nearly tripling Highland’s current full-time workforce to 90; and
- Increasing the plant’s capacity by 12% to 675,000 metric tonnes of sustainably sourced wood pellets per year.
Details of the expansion were provided by Chairman and Co-Founder Tom Reilley and CEO Jeff Vanderpool in a phone interview late Wednesday. Reilley is also CEO of Highland’s holding company of the same name.
“We wanted to be a low-cost producer in the industry. And so we are upgrading all of our drying systems, and our hammer milling systems and putting in state-of-the-art pollution abatement equipment,” Reilley said. “And all of that costs a lot of money, and we were able to work with our customer to actually increase the volume of our sales contract. And so what we’re doing is putting in better equipment at our plant and increasing the capacity of the plant at the same time.”
Reilley said in a news release that the partnership with Orion Energy puts the company in position to become a top global supplier of sustainable wood pellets. Orion provides capital services to middle market energy infrastructure businesses across North America and select international markets.
“We are pleased to partner with Highland to expand the Pine Bluff facility and provide a sustainable fuel source to support the global renewable fuels market,” Ethan Shoemaker, investment partner and head of Orion’s Houston office, said in the release. “Tom and his dedicated team have worked relentlessly to execute their plan and we are excited to collaborate at this transformational stage.”
The plant has 34 employees during the construction phase, but hiring is underway, Reilley told Arkansas Business. Highland expects to finish the expansion in the second quarter of 2021.
He added that the project will create another 300-plus indirect jobs with Highland’s suppliers.
“The job creation in Jefferson County is very much needed. … We’re happy that we’re able to reinvest and put these 90 people to work,” Vanderpool said. “And, also, the outreach that Tom was talking about with these 330 jobs, that’s not just isolated to Jefferson County. That’s spread over a very large portion of south and southeast Arkansas, so we’re happy to do it.”
He also explained why the company chose to expand in Pine Bluff.
“I think south Arkansas is a really underutilized resource and it’s a great work environment,” he said. “You’ve got the natural resources. You’ve got the people resources and, and if you can make your plant more productive with the same footprint, that just makes business sense.”
(Correction: A previous version of this article incorrectly reported Highland’s under-roof SF. Its operations are located on 200 acres and, to expand, the company did not need to buy additional land or construct additional building footprint.)
Sign up for Daily E-news
