One of the biggest Russian pellet producers is stopped operating because of the European market price drop

Vologdabioexport with the capacity of 50 000 tons per year stopped the pellet production in Vologda region (Russia) at the end of 2010. The produced pellets are on sale at the moment.

As soon as all pellets are sold the plant is suspended. The plant will be suspended until the situation improves. The pellet prices went down on the European markets which were the main markets for the Russian plant. At the same time inflation inside country, the decrease of Euro to domestic Rubble as well as an increase of the domestic wood waste prices forced the company to be closed.
The plant produced pellets out of wood waste which was collected from different companies. The waste price was very low at the beginning and after the pellet plant start-up it started to grow.
As a result the pellet production became unprofitable and company management decided to close company but not to sell machinery. As soon the market starts to grow the company starts to produce pellets again. The domestic market could also consume some pellets in the future.
The Vologda region authorities told that they plan to switch all municipal boilers to biomass.
We will see the future….However the same manner other pellet companies in the North-West of Russia were stopped during last years. At the same time new projects of constructing big pellet mills are developing. The new plants start running as well as the biggest European pellet plant in Leningrad region Vyborgskaya Cellulose plans to start production in February 2011. The market is developing.