Providing customer-based solutions that surpass expectations
Fram Renewable Fuels had a unique challenge. The Georgia-based company had grown consistently in its core business: renewable wood pellet fuels for the industrial power market. Fram had carved out a global leadership position supplying wood pellets to customers in Europe for the production of electricity and heat. The company, that started in 2005 as a single-mill production facility of 230,000 tonnes per year, had grown to a two-mill system which produced and marketed more than 395,000 tonnes by 2012.
But Harold Arnold, Fram’s President, recognized that they could grow further still. “We have a tremendous lyrich forest resource in our backyard which is professionally and sustainably managed. Our company also has a deep relationship with local wood suppliers and partners who emboldened us to expand further.” But, how was Fram to ensure that the mill was well sold and balanced in a multitude of markets?
Harold Arnold, President, has worked in the forest industry in the
southern US his entire working life. He spent more than 23 years
in the Forest Resources Division of Hercules Incorporated, he has
exported chips and other forest products through port facilities at
Savannah, handled a variety of consulting projects for forest products
industries in the South and completed several international
forestry-related assignments as a consultant for the United States
Agency for International Development. So, to say that he “knows
the forest products business” would be an understatement.
Nonetheless he was under no illusions as to the size of the
task ahead of him when senior management challenged him to
expand the company to build a greenfield mill site in Hazlehurst,
Georgia. The $90 million investment would produce 500,000
metric tonnes of pellets per year. Arnold knew that the new
Hazlehurst mill had to sell into other segments and other markets
to diversify. But how do you sell all those pellets? This is where a
relationship proved critical.
Fram and CellMark had come to know one another during
some protracted negotiations for an industrial pellet opportunity in
the UK. Both companies respected one another and the key personnel
formed a friendship. “It’s refreshing when you can do business
with people whom you can also call your friends”, recalls
Magnus Lindberg, CellMark’s Director of Marketing for Bioenergy.
The challenge was enormous. Fram wanted to enter a completely
different market channel: residential-heat pellets to the European
market. The residential-heat pellet market is large but very complicated.
Unlike its close cousin, industrial pellets, residential-heat
pellet customers are smaller, in a multitude of countries, serviced by
smaller ports and required a more difficult specification. “We were
in uncharted territory and we needed a sales channel which could
handle this complexity”, says Arnold. “CellMark had the knowledge
and sales footprint locally to help us enter this new market.”
The two companies signed a marketing alliance and began the
enormous task. Their work began with an extensive market
study utilizing CellMark’s local offices in Europe. Continual customer
visits with Fram helped introduce the product to the market.
Consultations with logistic partners were also critical since the
residential-heat market requires smaller scale delivery solutions.
The Hazlehurts mill is now in the middle of its production commissioning
and the important work of customer trials is underway.