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Latgran’s plans fourth wood pellet plant in Latvia

April 12, 2013, London, UK — Scandinavian-owned wood pellet producer Latgran has announced plans for a fourth wood pellet production plant in Latvia.


April 12, 2013
By Argus Media

The plant, located near the city of Gulbene in northeast Latvia, will produce 170,000 t/yr of wood pellets and raise the company's production to about 600,000 t/yr.

“We have the planning permission and firm quotations for the equipment, and the final investment decision is expected within a couple of weeks,” Latgran chief executive Jarl Wallden said. “The location is some 250km from Riga and the pellets will be transported by rail to the Latgran shipping hub of Riga. When operational, the factory will have the same annual output as Latgran 2 and Latgran 3 — some 170,000 t/yr.”

Latgran aims to double its production capacity but said there is no more scope for expansion in Latvia. “We will continue building plants of the same scale, as the uptake in building larger would be very big with high transportation costs for the feedstock, plus there is no real economy of scale. But now we are looking at other countries as Latvia is now full in terms of availability of raw materials,” Wallden said.

Latgran is one of a number of industrial producers looking to supply the industrial and premium heating markets in Europe. The new plant will be equipped to capitalise on growing demand for heating pellets in the “mid-market”.

“For us flexibility is the name of the game and so the new plant will probably be equipped for debarking. The mid-market is quite attractive and we have already started producing a limited amount of ENplus pellets in one of our facilities, with the ambition to expand this production to several of the existing factories if demand and price levels are attractive compared to the traditional industrial grade.”

Latgran will announce details of its next production plant later this year.

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