01 December 2020

We live in turbulent times, full of challenges and opportunities. A devaluating ruble means good business for exporting wood pellet producers who invested in their equipment at better valuta rates. This counts for the Siberian producers focused at China/ Japan/ Korea, or for those focused at the EU from western Russia.

We all look forward to cold European winters. I, because I am Dutch and love ice-skating, and you because it will help to get stocks empty and the pellet prices up. I also wish you a cold Christmas, with a solid hard forest ground to give access to the machinery.
On the mid and long term I see the demand for biomass only to grow. Due to ‘Paris Agreement’ and the derived ‘European Green deal’ for Europe, it’s less and less accepted to produce electricity by means of coal or other fossil fuels. As we don’t have sufficient land surface to produce considerable amounts of solar and/ or wind energy, Europe must use imported green energy. This green energy comes in the form of wood pellets from Russia or from the US. The latter is a less attractive option, because it makes no sense to have oil drinking super tankers sailing thousands of kilometers to supply us with ‘green’ energy. European subsidies on energy produced with Russian biomass will stay, demand will increase and biomass prices will go up.
Let’s look at the costs factor. As always in forestry, raw material costs and logistic costs play a major role. Sawn wood producers, who use their own chips and saw dust for their wood pellet production and who have long leasing on the forest ground might be considered the most stable. They are less influenced by fluctuations in raw material costs, and either benefit from a good wood pellet price or from a good price for sawn materials. As I am an Area Manager at CPM Europe B.V, I would like to zoom in on production costs. To keep your production costs per produced ton and per hour acceptable, high output of your pellet line and an absolute minimum of down time of your equipment (due to breakage) is required. At CPM Europe B.V. we have both the process knowledge and the stable machinery to ensure a stable production at high output. Personally, I think this is proven by the fact that most big Russian pellet producers use CPM Equipment.
For CPM Europe B.V. and for our Russian customers the pandemic and the closed borders were and are difficult. Even without being able to travel and just by endless talks on the phone/ whatsapp, I secured some big equipment orders. Of course I am happy to sell, but I am even more proud to see that ‘my’ customers aren’t afraid to invest and keep looking forward. But I miss the physical contact with customers and it is a big shame that I can’t visit the ЛесДревМаш this year.
The transport of equipment and spare parts was not prohibited by the closed borders and our customers were always supplied with spares. For the start-up of new approach we found an innovative approach, we did it online. Our start-up engineer in front of the computer screen and the customer’s production manager and his teams and a translator at the other, supported by our local partners. As such the crises also lead to innovation. However it would not have been possible, without the support of our local partners and without the flexibility of our customers. As such, a big thank you to you.