Scotia Atlantic Biomass survives fibre shortage

After a wood pellet shortage last winter, Scotia Atlantic Biomass Inc. is making a comeback this week by shipping 33,000 tonnes of Nova Scotia-made wood pellets to a U.K. power plant where it's destined to be used to generate electricity.

Julie Millington, general manager, left the Scotia Atlantic Biomass plant in Upper Musquodoboit to oversee the large load out. This quarter, the plant turned its first profit since parent company Virdis Energy bought it in a receivership three years ago.

"This is a big milestone," said Millington. "We've been trying to figure out what are the right things we need to do from a staffing, cost, fibre, operating and staffing perspective."

The 33,000 tonne shipment out of Pier 28 in Halifax is the largest ever from the company.

It follows a 2015 "right sizing" that included laying off a shift of workers and cutting production from 24/7 to 24/4. The company, which currently employs 16 people, was responding to a lack of access to wood fibre in Nova Scotia.

"We would have people scheduled to work and we wouldn't have enough material to run. We would shut down a day here, a day there. It's hard on staff, hard on machinery," said Millington. "You're also paying top dollar because you are trying to get enough material in order to get to the ships."

"We have schedule dates we have to hit a ship by. If we don't have enough material, we can't produce enough pellets and we have to pay for empty storage on a ship, which is quite costly," she said.

Now that the business is making a profit, Scotia Atlantic Biomass hopes to resume quarterly shipments from the Port of Halifax. 

During its 2015 reorganization, it delayed shipment. Millington says the company has now accumulated an inventory of 6 to 8 weeks of fibre.

In October 2014, Scotia Atlantic Biomass was one of 16 companies that were awarded fibre from the former Bowater Paper Mill lands in Western Nova Scotia.

The industry is still recovering from the hollowing out that followed the shutdown of Bowater and several sawmills. Several harvesting companies also got out of the business.

"There is enough fibre to go around. With a lot of places closing down recently, there hasn't been the capacity to cut enough. With that lack of cutting capacity, its just meant there isn't as much available for the people who need it," says Millington.

The plant uses what she calls 'garbage' to make wood pellets: sawdust, bark and waste wood.

The company is competing for supply with the Nova Scotia Power Biomass Plant in Port Hawkesbury.

Halifax Grain Elevator Limited bought 20 per cent of the Scotia Atlantic Biomass in 2014, with a $1-million investment.

A resumption in shipments and profitability is encouraging news for the grain elevator and for Cornwall Investments, a New Jersey capital company that has lent Viridis Energy millions of dollars.