FMI Brands Inc.

The Pellet Business FMI BioEnergy has been involved in the pellet business since the early 90's and has witnessed the challenges faced by the industry over the past 20 years. In the early days of pelletizing, sawmill residues were cheap, readily available and could be locked into long term supply contracts. Pelletizing equipment and engineering of pellet plants was both expensive and time consuming but these costs were absorbed into production, this was feasible due to the economy of scale. The availability of wood residues have changed and long term supply of sawmill residues are harder to find. Some plants are now turning to forest based residues and round logs for production but sustainability of operations and the sustainability of the environment are now real concerns. FMI BioEnergy saw a need to create a better way to make wood pellets that dramatically reduces the capital cost of building a plant, allows for scalability and can be easily moved. The Modular Pellet Plant also accommodates the ability to use alternative feedstocks in a sustainable fashion and create profits while protecting the environment.

Wood Pellets Wood Pellet fuel is carbon neutral and environmentally friendly. This is only true if the material used to manufacture pellets comes from wood residues that are sustainable and renewable. Wood Pellets are used in domestic heating, commercial heating and industrial power generation applications globally. Their bulk density allow for affordable transportation and storage.

Typical Feedstocks The most economical way of producing pellets is from sawdust created through the production of lumber. The supply of sawdust is unpredictable and can cause interruption in pellet production when lumber demands change and when the sawdust is sought by a variety of end users. Traditional pellet plants built to utilize sawmill residues alone run the risk of failing as they are permanent in nature.

Alternative Feedstocks Many pellet operations that have been faced with reduced sawdust supplies have turned their attention to round log and utilization of logging residuals as a means to maintain production. Although this is a more expensive feedstock, a pellet operation can be viable but the movement of feedstock over long distances becomes cost prohibitive. The Modular Pellet Plant creates a long term solution to alternative feedstocks.

The Future? FMI is actively involved in the densification of ‘torrefied' feedstocks (similar to charcoal). Torrefaction produces a feedstock that has higher energy values, is hydrophobic (repels water) and can be manufactured from many types of fibers. FMI is working with high level academics and engineers to create a modular system to meet this emerging new feedstock. FMI has successfully run tests on torrefied products.