COTTONDALE — Northwest Florida wood pellet manufacturer Green Circle Bio Energy has announced an agreement to sell its total share holdings to Maryland-based pellet company Enviva.
Green Circle, which operates a production plant in Cottondale, produces and sells about 650,000 metric tons of pellets per year, and exports product from Port Panama City.
Company President and CEO Morten Neraas said Friday the sale, which is expected to close in early 2015, will not change the logistics of Green Circle’s current operations.
“There’s nothing that will change as far as the operation ... all of that will stay the same,” Neraas said. “We are not looking at any changes for the foreseeable future.”
Enviva operates five pellet plants in the Southeastern U.S. and exports products from Chesapeake, Va. and Mobile, Ala. Neraas described the two companies as complimentary to one another.
A press release issued by Enviva following the announcement states, “Green Circle’s Florida-based production and logistics operations are expected to complement Enviva’s existing operating footprint.”
Both companies sell wood pellets to industrial power generators in Europe as an environmentally-friendly alternative to coal, and Green Circle is licensed to sell to the residential market, he said.
“At this point, it’s a very successful business,” Neraas said of Green Circle, which launched operations at the Cottondale production facility in 2008. “If we are not the largest wood pellet manufacturer in the world, we are right there.”
Green Circle and Enviva were some of the first companies to tap into large-scale pellet production nearly a decade ago, and the industry has grown significantly since then.
“Green Circle goes back to 2006, and Enviva wasn’t that far behind us,” Neraas said. “Right now, the industry is still growing quite quickly. What we are seeing, over the last year or so, there has been quite a concentration on the buyer side. On the industrial side, there are fewer buyers.”
The consolidation of buyers, he said, also has led to a consolidation of sellers.
Panama City Port Director Wayne Stubbs relayed the announcement to the Port Authority during a meeting Thursday, and said the sale is not a game-changer for the port.
“I have a lot of confidence that what we have provided Green Circle, the service we provide them, has probably been an unmatched value in ports,” Stubbs said. “I think with the new situation, they’re going to be pretty happy with it.”
Green Circle has an executed warehouse agreement and corporate guarantee with the port, which expires in 2018.
“We have a long-term agreement to use the warehouse and the receiving facilities,” Neraas said. “We have a contract with the port and we intend to fulfill that contract.”