For all its biomass resources, Africa has pretty much remained a blind spot when it comes to wood pellet plants, in particular “large” such plants. Not from a lack of trying over the years it should be said. However, this could change with Congo Basin Pellets GmbH, the most recent entrant to make an earnest attempt as Bioenergy International finds out.
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As it transpires, Congo Basin Pellets (CBR) is an aptly named new starter in the biomass pellets field. No doubt there will be those that find the name extremely provocative – reading it as an intention to convert the world’s second-largest rainforest, the “Green Heart of Africa”, into fuel.
Rest assured, it is not. Instead, it is all about transport, logistics and the use of existing unused waste wood resources as founder and owner Chris Fodor explains.
The opportunity lies in manufacturing large volumes of pellets for export to established markets like the European Union or Asia from existing wood waste and residuals. Others have tried but it is the lack of infrastructure and logistical costs in Africa that have been the primary deal breakers. And this is where our knowledge, expertise, and innovations will make a difference, Chris Fodor said.
“Will” is the operative word as the company’s first pellet plant project is currently being set up in Gabon.
From publishing to fish feed to pellets
An ex-pat American living in Austria, Chris Fodor is an entrepreneur with transportation planning as his academic forte, along with 40 years of professional experience in the Americas, Asia, Europe, and Africa.
Current businesses on the latter continent include domestic aquafeed production in Gabon and Congo Brazzaville for local fish farms as well as fresh seafood export from the region to France.
Wood pellets came up as an idea one winter’s evening in early 2019 cozy by the pellet stove at home in Salzburg, Austria.
I’d been working on publishing and fish farms in Central Africa and was about to retire. But before doing so I wanted one last project this time with wood, a material that I really love. I’ve seen numerous wood processing plants on my dealings in the region and noticed that wood waste was a big issue along the value chain. So, I figured that I’d try and build a business case around this, and pellets seemed an obvious solution, recounted Chris Fodor.
Strategic positioning
With its around 216 million hectares (ha) of forest spanning six countries – Cameroon, Central African Republic (CAR), Democratic Republic of the Congo (DRC or Congo K), Republic of the Congo (Congo B), Equatorial Guinea, and Gabon – the Congo Basin rainforest is second only to the mighty Amazon, the world’s largest rainforest.
Apart from all the said countries being francophone, all have tropical forestry, timber, and wood products industries as important export industries.
Congo Basin Pellets itself is a holding company for a cluster of six wood pellet production projects identified in four of the countries – Cameroon, Congo K, Congo C, and Gabon – of which the first project, a 45 000 tonnes-per-annum capacity plant, is under installation in Nkok, Gabon.
Almost all Congo Basin Pellet projects are at coastal locations seemingly as this is where most of the timber and wood processing industries are clustered.
Actually, the reason for choosing coastal locations is two-fold: on the one hand shipping pellets from the hinterland is risky since abundant rains in certain seasons would almost certainly destroy the pellets; secondly being close to the harbour reduces the outbound transport costs, explained Chris Fodor.
Apparent feedstock availability
The Nkok pellet plant is located in the Nkok Special Economic Zone (SEZ). Nkok is a small town almost 30 km east of Gabon’s capital city Libreville in the Estuaire Province in the northwest of the country.
First launched in 2010 when the Gabonese government announced a ban on log exports, in effect since 2011, the 1 126 ha designated SEZ site is now home to over 50 wood processing businesses ranging from plywood manufacturing, and sawmilling to joinery and furniture manufacturing.
Wood processing has in fact emerged as the main activity of Nkok SEZ. Here the transportation infrastructure is good with access to decent road, rail, and port facilities, the energy infrastructure is secure with a dedicated gas-fired power plant close to the SEZ, and proximity to local construction and residential markets – Libreville, both the capital and the largest city, is just a short distance away, said Chris Fodor.
According to him, two principal wood species are used by companies in Nkok SEZ – Okoumé aka Gaboon (Aucoumea klaineana) and Azobé aka Akoura or Ekki (Lophira alata). The former is widely used in veneer and plywood manufacturing and Gabon accounts for 90 percent of the world’s supply.
On an annual basis, Fodor estimates that around 350 000 m3 of wood waste is generated on-site. Arisings range from sawdust and shavings, sawmill- and veneer trimmings, to log off-cuts, although how much is actually available for pellet production is more difficult to ascertain.
Some is used for other industrial uses such as particle board, while some is used to make charcoal for the cooking market. That is one reason why we opted to start with a 45 000 tonnes-per-annum plant, to ensure we have feedstock margin on our side. We’d rather be in a position to scale-up and double production than be squeezed to downsize, said Chris Fodor.
Feedstock due diligence
Before delving into technology choices, the big questions on most people’s minds are legality and sustainability – the feedstock may be secondary residuals but where do the incoming logs come from?
It is a legitimate concern, and to be frank, tropical timber generally speaking (with European bias) carries with it both perceived and actual reputational risks, especially in these times of elevated anti-biomass forest destruction rhetoric.
Illegal logging is a scourge behind much deforestation and forest degradation, robbing people of livelihoods and national treasuries of revenue.
A 2016 International Criminal Police Organisation (INTERPOL) report called “Uncovering the Risks of Corruption in the Forestry Sector”, estimated the global annual cost of corruption in the forestry sector was US$29 billion.
Furthermore, that illegal logging costs the forest industry between at least US$19-47 billion per annum in lost company profits.
The report noted that crimes can occur at every point in the supply chain – from harvest and transportation to processing and selling and are often linked to other illegal activities such as illicit wildlife trade, drugs, document fraud, corruption, and money laundering.
And to be clear, this applies no matter where illegal logging occurs, not just in the tropics or Central Africa.
All wood entering Nkok SEZ has to be certified to ensure both legality and sustainability. What this means in practice is that incoming log numbers are traced back to the stump back at the harvest site and the numbers have to tally with the concessionary permit and other paperwork, said Chris Fodor.
In fact, Nkok SEZ has its own dedicated agency set up in late 2018 to ensure the control of the wood traded in Nkok SEZ.
Initiated by Gabon Special Economic Zone (GSEZ), TraCer-Nkok is operated and managed by Forêt Ressources Management Gabon (FRM Gabon), a subsidiary of sustainable forest management specialists FRM Group, together with the Gabonese non-governmental organization (NGO) Brainforest.
According to Sylvie Boldrini Corporate Social Responsibility (CSR) Manager of GSEZ, it is of critical importance for Nkok SEZ to ensure that the wood sold in the zone meets the legal requirements for sustainable forestry.
A due diligence system for risk analysis had to be put in place to minimize the risk of illegal wood and this had to be operated by an independent third party.
She explained that a supplier that wants to sell wood within Nkok SEZ must first obtain approval from TraCer Nkok.
The agency in turn requires documents proving that the company is registered in Gabon, that it honours its administrative and fiscal commitments – pays its corporate dues, employees’ social security contributions etc – in addition to the forest management plans for the logging concession, adherence to the Gabonese forestry code, and full traceability of the logs to be sold.
In addition to analyzing the traceability of the wood supplied by logging companies, TraCer Nkok also conducts concessions visits to ensure that the elements provided through the documents are consistent with the reality on the ground.
Supplier approvals are valid for 12 months.
Keeping CAPEX and OPEX low
Going against the grain perhaps, Congo Basin Pellets has purposely opted for “fully non-automatic” production lines requiring high employment levels.
Labour is available and relatively inexpensive here while technology needs to be imported and maintained, and that can be very expensive. We imported the entire production line from Richi, a Chinese manufacturer out of Henan province and we will continue to import certain parts that cannot be found locally such as electric motors and rubber belts. That said we do plan to make the additional equipment for our plants locally, Fodor said.
With over 50 wood processing plants located in Nkok alone, there are skilled fabricators to be found in the region that can service, maintain and rebuild equipment such as conveyors, shredders, grinders, and hammer mills.
Keeping CAPEX and OPEX low is a priority. The Nkok project is self-funded, I’ve ploughed my retirement funds into it and a European angel investor has matched the amount, roughly EUR 600 000 in total. This money needs to last and not only to see the plant get built but also through a learning and commissioning period. I’m not a seasoned pellet producer so there needs to be a learning by doing margin built-in, said Chris Fodor.
From an OPEX perspective, being in the Nkok SEZ has fiscal and administrative benefits including fixed parity between the EUR and FCFA, VAT exemption, and customs duty exemption on imported equipment and machinery.
The plant site is leased and the utility rate for power and water is subsidized.
Our raw material will be essentially free for the first three years of operation, given to us by sawmills that are anxious to clear out space and happy to find a use for what had been their waste, said Chris Fodor.
While the installation of the Nkok plant is underway, the current focus for Chris Fodor is the post-production stage, storage, and logistics.
Our production will be entirely export-orientated to Europe and Asia. Initially it is the utility markets but we aim to achieve ENplus certification once we properly up and running. Firstly though, it’s 30 km to quayside from the plant and the task in hand now is to sort out interim storage, ship-loading and shipping at cost-competitive prices. The goal for the latter is to match East-coast US to ARA (Antwerp-Rotterdam-Amsterdam) shipping rates, Chris Fodor said.
Project pipeline
As mentioned earlier, Nkok is the first of six pellet project locations for Congo Basin Pellets. A second, and potentially fourfold larger project in Gabon is also being developed, this time in Port Gentil.
Phase one of the Port Gentil project envisages a 110 000 tonnes-per-annum facility using feedstock from local sawmills within a 5 km radius. Discussions are well advanced with the Austrian Development Bank for funding.
Phase two at Port Gentil proposes a second slightly larger facility (134 000 tonnes per annum) that would use feedstock transported by river from inland sawmills some 900 km away.
The idea is to utilise the inland waterways and possibly also make use of logging residues of which there are a lot of. We estimate that we could almost double the quantity of wood waste if we retrieve the branches of tree crowns or stumps left in the forest, explained Chris Fodor.
The other locations in the company’s proposed pipeline include Pointe Noire (100 – 350 Ktpa) and Brazzaville (50 -250 Ktpa), both in Congo B and the latter being the only inland location. Kribi (50 – 350 Ktpa) in Cameroon, is the most northerly location, and Matadi (50 – 500 Ktpa) in Congo K is potentially the largest.
In total, the six Congo Basin Pellets projects represent anywhere between 325 000 and almost 2 million tonnes per annum of potential pellet production capacity.
These are all serious propositions. We have a non-binding Letter of Intent for a 100 000 tonnes offtake with CellMark, and are in discussions with other well-known pellet buyers and traders in Europe and Asia for another 500 000 tonnes, ended Chris Fodor.
And while there is a long way yet to go as the first test pellets in Nkok come through the press, Chris Fodor and Congo Basin Pellets has most certainly put Africa on the World of Pellets Map.
Note: This article was first published in Bioenergy International no. 2-2021 (Pellets Special no.7). Note that as a Premium subscriber you get access to the e-magazine, and other exclusive materials on the website before the print edition reaches your desk!
