Expansion of production capacities
By expanding capacities, the annual pellet sales volume of the Pfeifer Group will increase to approximately 560,000 tons by 2024. As a result, the company's role as the largest pellets producer in Central Europe will also be expanded.
In 1998, when Pfeifer began producing wood pellets at the Kundl location, a modest 2,000 tons were produced at the end of the first year. Production volumes far beyond 500,000 tons seemed utopian even to the optimistic pioneers. But our success story progressed continuously: With a clever expansion strategy, a high willingness to invest and an uncompromising commitment to utilising 100% of the raw material wood, the Pfeifer Group has catapulted itself to the top of Europe's pellet producers. In 2018, our pellets contributed significantly to the success of the Pfeifer Group with a share of more than 12 % of Pfeifer's total sales.
We believe that all the markets relevant to us will experience stable growth. Heating with pellets is continuing its upward trend and the benefits are undisputed.
CEO Michael Pfeifer sees its future importance even increasing in regard to the planned production volumes of the Pfeifer Group: “Our sales volumes will increase to 560,000 tons per year by 2024 – based on the 2019 budget of 430,600 tons – due to the positive market development”. Basis for this enormous growth is the trend towards heating with pellets in many European countries, which can be regarded as long-term and stable in view of the politically defined global climate targets. Throughout Europe, 20 million tonnes of pellets are currently produced, 16.7 million tonnes of which are for heating. In this segment alone, demand is growing by One to Two million tons per year. The Pfeifer pellets, which are exclusively ENplus certified, meet the highest requirements for product quality.
The pellets made of sawmill waste wood are enjoying increasing popularity throughout Europe. Pfeifer responds to the enormous market demand by expanding its production capacities.
The Pfeifer Group is responding to the rising demand with extensive investments, especially at the most powerful pellet production sites in Chanovice and Kundl. As early as 2020, pellet production in Chanovice, Czech Republic, will be expanded to 120,000 tonnes per year. For this purpose, new pellet mills were installed and three pellet silos with a capacity of 4,000 tonnes built – in line with the requirements of complete raw material recycling: “We have thought well ahead,” is how Michael Pfeifer explains the strategic expansion of the production facilities.
Over the past five years, Pfeifer has also invested massively in the expansion of pellet production in Kundl in the Tyrolean lowlands, thus reacting to the high demand on the Italian market. With an annual capacity of almost 200,000 tonnes of wood pellets, the site is currently the largest pellet plant in Central Europe. We supply the regional market, but large quantities are also exported to the south, as Michael Pfeifer explains: “In the pellet country Italy, one of our most important markets, 3.5 to 4 million tons are now consumed annually. Our brand is very well known there, Pfeifer pellets made of pure spruce wood are considered to be of the highest quality”. The pellets, packed in 15-kilo bags, are mainly used in households, restaurants and hotels from the Brenner all the way to Sicily.
Michael Pfeifer, CEO Pfeifer Group
The fact that wood pellets make up 12 % of the Pfeifer Group’s overall sales underlines their importance for the company.
Stable sales of pellet boilers can be observed throughout Europe, with a trend towards pellet-fired stoves particularly in the southern countries. Climate protection-related legal directives such as the CO2 tax in France or the planned ban on heating with coal and oil in some countries are also boosting demand. With 180,000 pellet-fired stoves sold in 2018, France has already caught up with Italy's sales figures for stoves, and the associated annual growth in consumption of around 200,000 tonnes is also sparking the interest of the Pfeifer Group: “We are closely monitoring the markets in France and Spain,” Michael Pfeifer reveals. The Balkans, too, are undergoing a major rethinking process in the direction of abandoning fossil fuels, as is evident from the ready sales of pellet boilers. In Austria, boiler manufacturers are talking of a turnaround in 2019, which is reflected in a significant increase of 30% in sales compared to the previous year.
Annual production of 2018 in Europe
German wood pellet producers set a new record in the third quarter of 2019 (an increase of 9% or 71,000 tonnes compared to the second quarter of 2019 and 21.7% or 132,000 tonnes compared to the same period of the previous year).
In the first quarter of 2019, 30 % more pellet boilers were sold in Austria than in the previous year.