(The Center Square) – The world’s largest industrial wood pellet manufacturer is declaring bankruptcy and that could affect planned mills in both Alabama and Mississippi.
Enviva, in a release, said it hopes to reduce debt by $1 billion through Chapter 11 bankruptcy. Two of its plants under construction will be affected.
The new Alabama plant in Epes near the Mississippi border in Sumter County will continue construction and begin production in 2025. The mill was scheduled to open this year. It is recipient of $112 million in taxpayer-funded subsidies in the form of a manufacturing equipment tax credit.
In southern Mississippi, the mill proposed for Bond in Stone County will be paused. The company says it intends to “revisit restarting Bond, depending on the level of customer contracting, once it emerges from its in-court restructuring process.”
The Bond mill, also scheduled to open this year, will receive $4 million in state grants and state and local tax breaks.
“These agreements with our lenders and noteholders represent a significant milestone in the ongoing process to transform our business, as we focus on improving profitability, reducing costs, enhancing asset productivity, and optimizing our capital structure,” Glenn Nunziata, interim chief executive officer and chief financial officer, said in the release. "We look forward to emerging from this process as a stronger company with a solid financial foundation and better positioned to be a leader in the future growth of the wood-based biomass industry.
“We appreciate the support of our lenders, our vendors, and our customers and the tremendous efforts of our entire team as we continue to execute our transformation plan.”
Enviva has 10 mills spread throughout Mississippi, Florida, Georgia, North Carolina, South Carolina and Virginia. The oldest is in Amory, acquired in August 2010, and another built in 2019 in Lucedale just a short drive from the Bond site. The Lucedale plant received a state $4 million grant in 2019 for site preparation and $13 million in property breaks from George County taxpayers.
Enviva’s wood pellets are manufactured from low-grade wood fiber unsuitable for lumber because of small size, defects, disease or pest infestation. They also use parts from trees that can’t be processed into lumber such chips, sawdust and other residue. Eniviva mills, dries and pellets the wood in a press, using natural polymers in the wood called lignin to act as a natural glue.