In 2009, Pine Bluff, Arkansas, a small town in Jefferson County with about 45,000 residents nestled between the Arkansas Delta and the Arkansas Timberlands, was named by Forbes Magazine as one of the country’s ten most impoverished cities. With a poverty rate well above 30% and a declining population (down from 57,400 in 1970), Pine Bluff was in need of a major investment to jump-start the economy.
As its name implies, the region surrounding Pine Bluff is rich in natural resources – particularly southern yellow pine trees. In 2015, Governor Asa Hutchison and Heartland Renaissance saw an opportunity to bring a major bring the wood pellet industry to Pine Bluff. Wood pellets are a growing source of energy overseas.
To help realize this opportunity, Heartland Renaissance, a subsidiary of Arkansas Capital, provided $8 million in NMTC financing in support of a new 209-acre Pine Bluff plant for Highland Pellets, a Minnesota-based wood pellet supplier. River Gorge and Capital One provided an additional $5 million and $1.5 million in NMTC financing, respectively, with Capital One serving as the NMTC equity investor. The plant site allowed Highland to tap into the area’s deep fiber basket and strong logistics chain to the Port of Greater Baton Rouge.
Highland worked with Astec Inc., a manufacturer of continuous and batch-process hot-mix asphalt plants, wood pellet plants and soil remediation plants, and related equipment, for the manufacture and delivery of the plant. Astec delivers state-of-the-art facilities and best-in-class training for employees.
The new plant, which opened in 2017, will use about 1.4 tons of wood feedstock annually, mostly southern yellow pine. Pellets produced at the facility are transported by Union Pacific on the mainline rail to the Port of Greater Baton Rouge, Louisiana, for export to Europe in support of the company’s mission to be a preferred supplier of sustainably-sourced biomass to industrial markets in both Europe and Asia.
While Highland ships the pellets produced at the new facility overseas, the benefits remain in the community of Pine Bluff. Today, the new facility employs 68 people directly, but it has also generated nearly 1,000 indirect jobs in Jefferson County and surrounding communities. The direct financial impact on the Pine Bluff area is more than $86 million annually, according to the Arkansas Economic Development Commission, which, along with the Economic Development Alliance of Jefferson County, worked closely with Highland Pellets on the project, providing additional tax incentives to help the company prepare the plant’s industrial site infrastructure.
“We haven’t seen anything this size since International Paper and Tyson,” Lou Ann Nisbett, president and CEO of the Economic Development Alliance for Jefferson County told the Pine Bluff Commercial. The Highland Pellets facility delivered its first train of pellets in April 2017. The plant is now fully operational. According to Biomass Magazine, Southern Yellow Pine from managed forests serves as the plant’s feedstock source, with most coming from forest thinnings, in addition to tree tops, low-grade trees without an end market, and mill residuals.
“This plant began with a simple economic goal but has evolved into producing sustainable fuel by producing sustainable outcomes for our employees, our community, and our environment,” Tom Reilley, chairman and co-founder of Highland Pellets, told the Pine Bluff Commercial at a ribbon cutting ceremony. “Our goal is to show our fellow citizens that respecting people is good business. Creating a stable platform around not just financial capital but social capital like trusted relationships, shared values of compassion, community outreach, education, and economic development yields demonstrable returns. Together we are building a strong culture here at Highland, and I am confident that our workforce will be the safest, most motivated, and most productive in the area because we will invest in their future.”
Also on hand was Arkansas Governor Asa Hutchinson, who said, “Highland Pellets’ leadership is passionate about this new facility and the impact it will have on Jefferson County’s economy.