Canadian Wood Floor Maker Starts Pellet Business

Middle River, Nova Scotia, Canada, Oct. 28, 2008--A Cape Breton company that makes hardwood flooring is cashing in on the increased demand for wood pellets, used for heating.

When Finewood Flooring and Lumber Ltd. got a wood pellet machine, it was mainly to use up leftover sawdust and wood chips.

But with more people switching from oil to wood heat and fewer businesses producing pellets, the company in Middle River, N.S., finds itself in the right business at the right time. It has a three-page list of potential customers waiting for pellets.

"I think people have seen just over the last year what can happen to the price of oil. One year you're paying 70 or 80 cents a litre and then the next year you are paying $1.20," said co-owner Peter Christiano.

"The price may go lower than it is right now, but we know it can go a lot higher."

Christiano said a shortage of wood chips for pellet production can be traced to the collapse of the U.S. housing market, which led to mill shutdowns.

The company began selling pellets only last week and it hasn't advertised the fact. But word spreads fast, Christiano said, and calls are coming in from outside the province.

He plans to sell locally first, then grow the wood pellet business to meet as much of the demand as he can.