Port of Riga rapidly increases volume of handled wood pellets
In August, the Port of Riga handled a record volume of wood pellets. According to the port’s press release, during a single month, port terminals managed to handle more than 200,000 tonnes of pellets. Also, year on year this cargo group has shown impressive growth. During the first eight months of this year, the year-on-year increase in the volume of wood pellets shipped from the Port of Riga was 55.4%.
Several factors contributed to this impressive outcome. First, there was high demand for Latvian granules in the main markets of Western Europe. The demand was fuelled by the global trend of substituting fossil fuels with renewables, including wood pellets. Of late, the demand has also been fuelled by seasonal factors, namely, people are stocking up on fuel for the next winter season.
Second, Latvia has also managed to increase production and export volumes significantly, which was facilitated by the availability of raw materials and decrease in prices. “Currently, there is smaller demand for Latvian timber in Scandinavian markets. This benefits the local pellet producers, who can now operate their facilities at maximum capacity. Thus, they can also sell more and meet demand in export markets,” explains Atis Šulte, Business Development Director of Rīga Universālais terminālis LLC, which operates from the Port of Riga.
In the Port of Riga, wood pellets are handled by nine companies. The share of Rīgas Universālais terminālis LLC is more than 65%. Of late, the company has made significant investments in deepening and lengthening its berth and introducing advanced loading technologies. This makes it possible to receive and service large Panamax type vessels, which is very important in the case of wood pellets. “To optimise costs, our customers rely on ever larger vessels. It is possible to cut per tonne costs if the ships are larger and can accommodate more. We have to meet customer requirements and be able to service these ever larger vessels in suitable berths,”underlines Atis Šulte.
The third largest terminal as to the volume of wood pellets at the Port of Riga is a family owned company B Port LLC, which took over the land of the port and its berths in Mangaļsala on the right bank of River Daugava seven years ago. This company handles grain, peat, fertilisers and timber, though a half of its volume is generated by wood pellets. Since starting at the Port of Riga, B Port LLC managed to increase the volume of handled pellets more than tenfold. “At the very beginning, we handled 20,000 tonnes of pellets per year. But now we can deal with the same amount in only a month,” explains Artūrs Batraks, the Director of B Port LLC. The company is also positive about the future growth of this group of cargo. “So far, we have seen that this sector is growing consistently. There are many customers, and they are even queuing up for warehouse space,” continues Artūrs Batrags.