AL - 118 Million Wood Pellet Plant In Jackson In Limbo

A proposed wood pellet plant in Jackson, Ala., has been indefinitely delayed, as owners have yet to raise the $118 million needed to build the 100-job project

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118 Million Wood Pellet Plant In Jackson In Limbo

Thursday, July 16, 2009
By JEFF AMY
Business Reporter

A proposed wood pellet plant in Jackson, Ala., has been indefinitely delayed, as owners have yet to raise the $118 million needed to build the 100-job project, said Debra Bolen, executive director of the Clarke County Economic Development Partnership.

"It is still in an ongoing state, it's just that construction has not begun," she said Wednesday. "It's my understanding they're still working on the financing."

Evan Bates, the chief executive of New Gas Concepts, could not be reached for comment Wednesday.

The worldwide financial crisis crippled the borrowing ability of many businesses beginning last fall. Bolen said there's no new date set for building to begin.

The plant would make 600,000 tons of pellets a year from sawdust, wood chips, branches and other leftovers from sawmills and loggers.

European power companies are burning pellets in an attempt to cut carbon dioxide emissions, and a number of pellet mills have been built or proposed in the Southeast to feed Europe's growing demand.

New Gas Concepts Inc. announced its plans in February 2008. Since then, the site has been cleared and graded using a $500,000 loan from the city of Jackson and part of a $500,000 grant from the Alabama Department of Economic and Community Affairs, said Bolen and Jeff Miller, Jackson city administrator.

Plans have been drawn for an access road and water and sewer connections to the site off Alabama 177 on Jackson's south side, Bolen said.

New Gas Concepts also led the construction of the $75 million Dixie Pellets plant in Selma. That plant was financed in part by a $70 million, 18-month loan from an arm of French bank Credit Agricole SA, according to a July 2008 statement by the bank.

Bates told the Clarke County Democrat last year that New Gas Concepts had sold its interest in the Selma mill.

Harbert Power Fund III, an investment fund managed by Harbert Management Corp. of Birmingham, owned 86 percent of the Selma plant as of Dec. 31, 2008, according to Harbert Management's annual report. Harbert could not be reached Wednesday.

New Gas Concepts had sought to lease a warehouse at the state docks in Mobile for 10 years at $480,000 a year. Alabama State Port Authority directors approved the lease in January, but New Gas Concepts never moved forward and docks spokeswoman Judith Adams said officials haven't heard from the company in four months.

Additional Information

Web Site: http://www.al.com/business/press-register/index.ssf?/base/business/1247735729115190.xml&coll=3

Category: Forestry>Biomass Energy

Region: Alabama

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