A Portland company will discuss its plans this morning to build a $20 million wood pellet manufacturing plant that will help keep the world's largest wooden golf tee factory operating in Maine.

International WoodFuels LLC expects to break ground in September for a 100,000 ton per year pellet plant next to Pride Manufacturing Co. LLC in Burnham, south of Pittsfield.

Further details are expected at a news conference to be held at the city's Ocean Gateway building.

The partnership will have multiple benefits. It will help save 145 existing jobs at a wood-products company that has operated in the state since 1956. It also will create 35 new jobs in the renewable energy field, producing a homegrown fuel aimed at loosening the state's dependence on imported oil. Additional jobs are likely to be created in logging and trucking.

The wood pellets are expected to be sold locally to meet growing demand, according to Steven Mueller, the president of International WoodFuels.

"There's not a single pellet made in my plant that will leave the state of Maine," Mueller said.

The plant's startup is scheduled for next June. It will be the fifth wood pellet plant built in Maine. Wood will be harvested in a sustainable manner and trucked from within a two-hour drive of Burnham. The company will need 200,000 tons a year of whole logs to operate the pellet mill at full capacity.

That tonnage is roughly five times greater than what's now coming into Pride Manufacturing. The added volume, and the sharing of a log yard, for instance, will help Pride save money on wood purchasing. The savings are important, according to Randy Dicker, senior director of manufacturing at Pride, because the company's profitability has been undermined in recent years by a flood of imported golf tees from China.

"The synergies this opportunity creates will allow us to remain in central Maine for years to come," Dicker said.

Pride moved from Florida to Maine in 1956, first making wooden cigar tips. The tips are still part of the business, but the dominant product is golf tees made from white birch and white maple, hundreds of millions a year.

"This is going to strengthen a business that has a long history in Maine," Dicker said.

International WoodFuels and Pride were brought together by Maine & Co., the private corporation that helps companies that want to grow or locate in the state. "It seemed that there was an opportunity for someone who could use the scrap wood that Pride was providing," said Matt Jacobson, Maine & Co.'s president.

Jacobson, who is running for governor in 2010, said co-locating companies that can help each other save money is an important business strategy that can be duplicated elsewhere.

"If people can keep their jobs and be more efficient, that's how Maine is going to go forward and be more competitive," he said.

Some of the pellets from the plant eventually will be used to help heat space and water at the high school in SAD 61, which includes Naples, Bridgton, Casco and Sebago. International WoodFuels is close to signing a contract to install a free pellet-fired boiler and deliver pellets to the school. The school district will pay for the heat energy it uses. The boiler is scheduled to be installed by year's end.

The arrangement will advance the district's ongoing efforts to upgrade energy efficiency and cut back on fuel oil, according to Patrick Phillips, the superintendent. Under the contract, the district will save between $20,000 and $60,000 a year, depending on the price of oil, he said.

In a broad sense, the construction of a fifth pellet plant in Maine will diversify supply and offer a broader selection, said William Strauss, an economist and member of the Maine Pellet Fuels Association. The plant also will help supply what Strauss sees as a growing market for wood pellets.

"I believe there's plenty of demand," he said.

Staff writer Tux Turkel can be contacted at 791-6462 or at tturkel@pressherald.com

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