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The Negative Impact of Covid-19 on Wood Pellet Producers

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COVID-19 has lasted from the end of 2019 to the present, and has affected all industries, but most industries have a negative impact. Especially the negative impact on the machinery industry is relatively large. COVID-19 has had a negative impact on wood pellet machine manufacturers and wood pellet manufacturers. Let's take a look at the investigation of the negative impact of COVID-19 on pellet manufacturers.

A survey conducted by ENplus®, a certification scheme for wood pellets, found that 75% of certified producers have been negatively affected by the COVID-19 pandemic.

Wood Pellet
Wood Pellet

The goal of the survey was to gather data on the current impact of the pandemic on ENplus certified companies and to provide information on possible future fluctuations in the market of high-quality wood pellets. 93 certified companies from 21 countries (most of which are based in Europe) participated in the survey.

Two out of three companies are already planning the introduction of new pellet prices for end-users, according to the organisation.

More than half of the negatively affected producers and traders highlighted the reduction in end-user demand as the most significant consequence so far. ENplus said an assumption can be made that this will be the main reason behind a decrease in production and trade in the coming months.

ENplus said almost 36% of respondents plan a small price increase, while another 26% of companies intend to decrease prices until the end of the year. In both cases, the new pellet prices will likely introduce a difference of up to 20%, according to the organisation. The survey also showed that local government aid is available, according to 71% of respondents, but less than half of them plan to apply for it. Government aid was reported for countries including Spain, the Netherlands, Italy, the UK, Poland, Belgium, Hungary and Croatia.

Despite the negative trend, the organisation noted that the pandemic also brought opportunities for around 5% of respondents. Most of these companies reported an “unusual increase” in end-user demand during the first half of the year.

The COVID-19 outbreak in 2020 will affect wood pellet manufacturers as much as it will affect wood pellet machinery manufacturers. Richi Machinery is a manufacturer of wood pellet machines, biomass pellet machines, and hay grass pellet machines. Although COVID-19 in 2020 has had a lot of adverse effects on the industry, Richi, based on years of production experience and reputation, reached a cooperation with a company in the United States in April 2020, which is a 10 tons/hour wood pellet production line project. It has now been shipped for installation. In more than half a year in 2020, Richi has signed more than 30 orders. If you have a need for a wood pellet machine or wood pellet production line, please contact us. In 2020, Richi is here for you!

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