In March, Ken Tucker, president and CEO of Lignetics, Inc., announced that the wood pellets manufacturer has been acquired by Taglich Private Equity LLC, with financing from Gladstone Capital Corp. and Texas Capital Bank. The investment is intended to allow Lignetics to pursue its plans for continued growth.
“They (Taglich) have multiple companies in their portfolio, but this is the only one in this industry, manufacturing pellets,” Tucker says. “Operationally, nothing has changed. Everyone is still in the same role.” Lignetics General Manager of Operations, John Utter, who came on board in 2003, reiterates that Lignetics will continue to function the same as before.
With the access to new investment capital, Lignetics aims to extend its reach in the domestic residential heating market, as well as potentially explore some offshore opportunities. Part of the plan is aggressive expansion by way of buying other facilities. “They bought it to grow the business, not to buy these three plants and call it good,” Tucker adds. “We want to grow our footprint in New England, especially.”
Operations
A privately held American company that started in Idaho in 1983, Lignetics, Inc. has been producing wood pellets for home heating since before it was cool. In the time since, the company has expanded its operations to include three production facilities. Lignetics of Virginia, which opened in 2009, is the newest of the three plants—with the original at company headquarters in Kootenai, Idaho, and the second plant is in Linn, West Va. Along with wood pellets for residential home heating, the Idaho location makes Pres-to-Logs brand fire logs, fire starters and bedding products. Both the Virginia and West Virginia plants manufacture residential heating pellets and animal bedding pellets, and both have recently begun producing barbecue pellets for wood pellet grills and smokers.
While the bedding product uses only untreated natural pine sawdust, the residential pellet line is 100% hardwood, using several species sourced from lumber mills and flooring plants within a 100-mile radius, mostly to the south of the plant. The region, encompassing southern Virginia and northern North Carolina, is rich in quality hardwood timber.
Lignetics of Virginia
Much of the machinery at the Kenbridge plant was fabricated in-house either at this location or at one of the other two. A Peerless truck tipper dumps trailer loads of sawdust onto a concrete slab at the receiving station. The tipper operator then uses a Caterpillar front-end loader to carry sawdust into the appropriate piles based on species. Various hardwood species are generally mixed together, with poplar and pine having separate piles.
The material is mixed together outside to get the right moisture content, with dry and green dust blended together before going to the dryer. A sample from each load goes to the control room for moisture and ash testing with a moisture analyzer. Moisture percentage of incoming raw material can range between upper 30s to mid-50s. This lets the operator know the appropriate feed rate setting for the dryer drum in order to form quality pellets. Material that is either too wet or too dry won’t form a good pellet. The blend may typically start with five scoops of green material to two scoops dry, and after sample tests the operator will adjust as needed to achieve the optimal ratio, at which point the batch is ready to run through the dryer.
From there the front-end loader will dump the sawdust into the infeed bin, where the material goes through a shaker screen to separate oversize particles, rocks, slab wood and foreign material. Along the conveyor the material also passes through a series of several magnets to remove any metals.
Sawdust drops from the shaker screen to a weigh belt below. Once it is weighed, the sawdust mix is carried to the inlet of the tumble dryer via a screw conveyor. At this point the green sawdust mix is introduced into the hot gas stream to begin the drying process. After passing through the rotary dryer the sawdust passes through a rock catcher to remove any small pebbles that could have passed through the earlier screening process. The dry sawdust is then conveyed through a series of ducts to the primary cyclone for separation of the air from the sawdust. The sawdust is then fed into a Sprout hammermill for sizing. Once sized, the sawdust continues through a series of ducts and conveyors until ultimately reaching the pellet mills.
The plant uses byproducts from its own processes to run the burner, supplying heat for the dryer. This includes fines that fall out during the screening process. Burner temperature ranges from 1,000-1,200°. The single-pass dryer system has flighting in the internal framing, functioning like a tumble dryer to ensure all material is moving as heat is applied. Sawdust moves continuously through the system. It takes about 15 minutes for material to move through from start to finish, with an exit temperature of 110 to 160°. When finished, sawdust will be down to about 8-14% moisture.
The plant uses a Grecon spark detection and extinguishment system to sound alarms and put out any sawdust that may ignite during the drying process.
Ducts and conveyors from the dryer feed two Andritz pellet machines, used to make both fuel pellets and animal bedding pellets (separately). The dryer operator controls the infeed rate at a steady flow, but the process is continuous, and almost immediate. Heat and pressure form sawdust into pellets inside the die. While the pellet machine spins, it is steadily dropping pellets down to coolers beneath, which draw air over the fresh pellets to remove heat and moisture. At timed intervals, the cooler releases the pellets to an auger system that feeds into a Rotex rotary screener for the initial screening process. Once screened the pellets are then conveyed to one of six storage silos.
The silos feed a Hamer bagging machine, which automatically measures and fills 40-pound bags. On average the plant produces and bags 190 tons of fuel pellets in every 24-hour period of operation—about 9,500 bags a day. That comes to 47,500 bags a week, or 2,470,000 bags a year of fuel pellets. The plant routinely pulls bags to check weight, on a separate scale, to ensure accuracy and proper sealing of the bag.
From the Hamer line, sealed bags move up a conveyor to be stacked by a Pasco automated packaging system. The system utilizes a robotic arm to stack on a pallet, 50 bags per pallet. At 40 lbs. per bag, each pallet carries a ton. Each finished pallet then moves to an automatic Highlight Industries stretch wrap machine. A forklift driver moves and stacks the pallets in a warehouse where it awaits delivery. The Virginia location has the capacity to store more than 25,000 tons of finished product in three separate warehouses.
Marketplace
Lignetics currently doesn’t export; since its beginning the company has serviced primarily the domestic residential heating market. Aimed at this market, the Idaho location services the market west of the Mississippi while the West Virginia and Virginia locations service the eastern market.
Retailers and specialty stove shop owners typically send trucks to pick up their orders, so transportation is not a concern for the plant. Lignetics uses several different bags depending on the order’s destination. Some customers require a private label bag while others utilize one of two Lignetics labels, Lignetics brand or Pres-to-Log brand. Lignetics customers include companies such as Lowe’s, Home Depot, Tractor Supply and Ace Hardware along with numerous independent and specialty stove shops. On the animal bedding side, only Tractor Supply has its own unique bag; all others use Lignetics brand EZ Equine package.
Teamwork
“The Virginia plant has enjoyed steady growth since it opened,” Utter says. “Last year especially, I think everyone in the industry experienced a spike.” In early March the plant had just gone to a five-day week with 24-hour days, but that is only temporary. It will soon return to its usual 24/7 operation. “We need to run around the clock to meet commitments to customers,” Utter says.
When production is on a five-day schedule, the crew can perform maintenance on weekends, but when it goes back to the 24/7 grind, it’s more of a challenge. The employee roster includes three full-time maintenance people who do as much as they can while the machines are still running. For example, while roller bearings on the pellet machines are automatically greased, maintenance checks the greasers periodically to ensure grease rates are at the proper levels. When a situation necessitates shutting down production—say if a belt breaks—then everybody works together to get it done as quickly as possible in order to minimize downtime.
Lignetics employs 18 here, with two administrative personnel in the office and the rest in the plant, on three shifts. One runs the receiving and infeed station, one runs the pellet machines, one oversees the bag filling line, and others drive forklifts. “It doesn’t take a lot of people, so everybody’s a key employee,” Utter notes. “Nobody has a more important job than others. It all has to work in tandem, seamlessly.”
PFI Accreditation
Lignetics is accredited through the PFI Standards Program. After initiating revision of its standards in 2005, the Pellet Fuels Institute launched its PFI Standards Program in 2011, with the American Lumber Standard Committee (ALSC) serving as the program’s accreditation body.
The third-party accreditation program, which provides specifications for residential and commercial-grade fuel, has been proposed for incorporation in the EPA’s New Source Performance Standards (NSPS) for residential wood heaters. EPA, which mandates regulation of pellet fuel through NSPS, supports the inclusion of the PFI Standards Program in the NSPS.
In March, all three Lignetics plants underwent the auditing process successfully, with Conway Robinson overseeing the audit. The company is approved to label its bags of pellets with the PFI quality mark, indicating that the product is guaranteed to meet specified grade standards.