Slow sales force Ashland pellet-maker to cut back
ASHLAND, Maine — Amid warmer weather, cheaper oil and higher U.S. exchange rates, Ashland-based Northeast Pellets has curtailed production in an effort to stay open long-term.
Northeast Pellets decreased its pellet production by half effective immediately, Matthew Bell, founder and president, said in a media release Monday.
Sales have been weak this season because of the warm weather, Bell said, but the “real blow” was when one of the mill’s largest local customers, representing 15 percent of output, switched to a Canadian supplier. The customer is the University of Maine at Fort Kent. The company continues to supply the University of Maine at Presque Isle and Northern Maine Community College, he said.
Bell emphasized that the mill is not shutting down, but reducing production “to avoid closure.”
After developing the business idea for the pellet plant as a student at Husson University, Bell and his father built Northeast Pellets as the state’s first wood pellet manufacturer, and production started in 2006. Three other wood pellet plants have opened up in Maine since then.
Until recently, Northeast Pellets was operating 24 hours per day, five days per week, and over the past 16 months, the company invested almost $500,000 in the mill’s capacity and efficiency to try to meet the demand experienced last winter — when retailers were selling out of the fuel amid frigid cold.
Now, Bell said, Northeast Pellets’ operations have been set at three days a week, with reductions in hours for 13 full-time employees.
“We partnered with many interests in the area to create this transition and aid local businesses, but now find our operations at risk in this difficult market,” he said. “We ask our employees for their patience as we try to sort through this market situation.”
