Scale Necessary for Export Wood Pellets Scale Necessary for Export

Shane Gaither Daychanger Consulting 910-434-2980

Wood Pellet Uses Domestic International Heat BBQ Pet Products Power Generation

Why Not in the US for Power GAS

Small Scale Opportunity Bagged Pellets Heat BBQ Pet Products Increased Handling Much Higher Quality requirements

Large Scale Opportunity International Green Energy Market Demand is poised to increase dramatically in Europe when Japan and Korean shipments begin.

US Rail

Largest European User of Wood Pellets Primary Market Power Generation European Countries UK Netherlands Germany Italy

Barrier to Entry Catch 22 Buyers want assurance that plants will actually be built Financiers want assurance that contracts are in place

Scalability The Ideal plant size is 450 thousand metric tons per year Leverage Wood costs Logistics Rail Ship Owners

Another Possibility Centralized Cooperative Deliver smaller amounts to a centralized location from i.e. Sawmills Store in dome near rail siding Ship in unit trains to port Load ship “hot”

Need for Scale Unit Trains Charter Parties

Unit Train Loading Unit Trains are required to keep freight costs down and smooth transit time

Charter Parties and Ship Size Many factors go into negotiating shipment size but bottom line is the bigger the better is best for the Bottom Line.