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Viridis forms subsidiary to broker biomass energy transactions

Viridis Energy, a manufacturer and distributor of biomass fuel, has formed a wholly owned subsidiary to arrange transactions between buyers and sellers of alternative energy, including wood pellets.

Commodities trading specialist Jesse Harte has been appointed MD of the wholesale division of the new company, named Viridis Merchants. Doug Middleton, who currently manages the US brokerage business for Viridis, has been appointed MD of the retail division of Viridis Merchants. Christopher Robertson, Viridis' CEO, will also serve as president of Viridis Merchants.

'The wood pellet industry represents a classic merchandising opportunity in its early stages. Viridis intends to expand its brokerage business, which currently utilises several third party producers, to include locational differentials, supply and demand imbalances and aggregation opportunities to increase its overall participation,' says new president Robertson.

'In addition to brokering transactions between buyers and sellers, Viridis intends to augment its production capacity, currently approaching 200,000 tonnes per year from its Okanagan Pellet and Scotia Atlantic Biomass Companies, with third party suppliers' products of equal quality to develop additional brands in the residential market.'

He adds: 'Since the business model is that of a broker, the gross margins generated from
Viridis Merchants are expected to be lower than our core business. However, the operating margins should be significantly higher since there are minimal incremental operational costs associated with the business.'

Harte comments: 'The market for brokering wood pellets and other renewable energy commodities is in its developing stage. Commercial users of wood pellets, such as energy producers, are securing sources of wood pellets to fill co-firing needs mandated by recent legislature.'