Background
My background is in investment banking, so I am always looking for projects to develop. I got into the biofuel business in the early 1990’s when a friend of mine installed machinery for making wood briquettes (compressed sawdust used as fuel). How we got started is interesting, I think.  

Biofuel beginnings
This was at the time when the Soviet Union was breaking up.  Riga, Latvia, and Kobe, Japan became sister cities.  As a gesture of friendship, the Japanese sent three briquette machines to Latvia. Unfortunately, all the documents describing how to operate and maintain the machines were lost, so no one installed the machines.

A friend of mine decided to give it a try.  He managed to install the machines and get them operating, but he was poorly capitalized. A group of us raised the capital to get the business started and keep it going. So, that’s how I got into the biofuel business. You can say that my training was on-the-job.

A different market then
Keep in mind that the biofuel market in the 1990’s was completely different. Sawmills paid us to take their sawdust “waste” away. We got our raw material for free and could sell the briquettes for 50 US dollars per ton.

Compare that to today, where sawdust is our largest cost, and we have reached the limits of what Latvian sawmills can produce (about 400,000 tons a year). We have to expand outside our borders if we want to grow.

Fast learning curve
We moved quickly from briquettes (6,000 tons per year) at our first company into the production of wood pellets. We bid for and acquired a pelletizing company in Latvia (owned by a Danish company) in 2001. That company owned three Sprout Matador pelletizing lines (manufactured in Denmark). This was my first experience with the Andritz Sprout-Matador products.

Then, we decided to build a new plant, Gaujas Granulas, near the seaport in Riga. The three Andritz machines were moved to Gaujas Granulas, and three new ones were added in 2004. Today, Gaujas Granulas is the largest and most modern producer of pellets in the Baltic States, with a capacity of 120,000 tons per year.

In 2005, we expanded outside Latvia with the acquisition of a company in Estonia. We also own a portion of a new production facility, Kurzemes Granulas, in Ventspils, Latvia, which started up in July 2005 and has two new Andritz pelletizing lines.

Today, we have 17 pelletizing machines, 11 of them from Andritz, with the ability to produce 250,000 tons per year of wood pellets.  

Why Andritz?
In my opinion, the machines from Andritz are the Mercedes Benz of pelletizing equipment. We own competitive equipment as well, so we know from experience. In terms of investment cost per ton of product, the Andritz machine is the lowest.  

When we look at investment opportunities today, we look at buying or building plants with a minimum of three pelletizing lines. Fewer than three lines is not economical because we have to purchase a cooler, hammer mill, dryer, automation equipment, and other auxiliaries anyway. So, there are advantages to have three pelletizing lines in the plant in terms of investment cost per ton of production.  

Technically, Andritz does some things better than its competition. For example, the cooling rotors give us more stable production and lower costs. But, equally important is the reputation of the company and the quality of service.

We chose Andritz Sprout-Matador because they are the most reliable and deliver the best performance. We have eight years of experience operating Andritz equipment and we know what to expect. The machines consistently press out three tons of product each hour. Installation and start-up is done quickly, and our operators know how to optimize the lines.

What is the future?
Our business is about getting energy from wood – and to extract that energy at the lowest cost possible. Our customers purchase the heating value of green energy. We pelletize it to make it easier to store and transport. We’re always looking for new and better solutions.