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Enviva (EVA) to Build More Wood Pellets From New Alabama Plant
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Enviva Inc. (EVA - Free Report) started construction of Epes plant in Sumter County, AL. The company has been operating in Sumter County since its first assessment of the location in 2018. The plant has been designed using information from the company’s existing ten plants to deliver an improved and modernized model known as the EVA-1100.
EVA purchased nearly 300 acres in the Epes Industrial Park in 2020 in order to build its wood pellet production plant. The park lies close to the Tombigbee River in Sumter County. In July 2022, the company started the construction work of its fully contracted Epes facility, which will have a nameplate capacity of 1.1 million metric tons per year. The plant will be operational by mid-2024, with ramped up production by 2025.
Benefits of the Project
Enviva plans to invest nearly $375 million for every newly constructed plant going forward, including the Epes plant. Once the facility becomes operational, it is expected to support jobs, including adjacent industries such as logging, trucking and shipping.
Pellets made at the Epes plant will be shipped to foreign markets, primarily those in Europe and Asia. This will help meet the international demand for reliable renewable energy sources that aid in defossilizing power and heat generation, as well as energy-intensive industries like steel, cement, lime and sustainable aviation fuels.
Advantages of Wood Pellets
Both Canada and the United States are major producers and exporters of wood pellets. The global demand for these pellets is expected to grow exponentially over the next few years. Enviva, the world’s largest producer of wood pellets, is planning to double its capacity from 6.2 million tons per annum (MTPA) to 13 MTPA by 2026.
Wood pellets are an eco-friendly fuel source that produces much lower emissions than fossil fuels. When burned, these pellets release only a small amount of carbon dioxide into the atmosphere, making them a cleaner fuel source. According to the Biomass Energy Resource Center, using wood pellets instead of fossil fuels can reduce greenhouse gas emissions up to 90%.
While the initial cost of installing a pellet boiler can be higher than a traditional oil or gas boiler, wood pellets are generally less expensive than fossil fuels. In addition, wood pellet prices are less volatile than oil and gas prices, which can fluctuate widely due to global supply and demand.
Therefore, by choosing wood pellets over fossil fuels, we can reduce our reliance on non-renewable energy sources and move toward a more sustainable future.
Price Performance
In the past month, shares of Enviva have risen 28% compared with the industry’s 17% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Enviva currently carries a Zacks Rank #5 (Strong Sell).
The Zacks Consensus Estimate for ACA’s 2023 earnings per share (EPS) indicates a year-over-year increase of 26.5%. It delivered an average earnings surprise of 59.9% in the last four quarters.
The Zacks Consensus Estimate for EXP’s 2023 EPS indicates a year-over-year improvement of 8.4%. It delivered an average earnings surprise of 6.5% in the last four quarters.
LEN’s long-term (three- to five-year) earnings growth rate is 6%. It delivered an average earnings surprise of 18.4% in the last four quarters.
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Enviva (EVA) to Build More Wood Pellets From New Alabama Plant
Enviva Inc. (EVA - Free Report) started construction of Epes plant in Sumter County, AL. The company has been operating in Sumter County since its first assessment of the location in 2018. The plant has been designed using information from the company’s existing ten plants to deliver an improved and modernized model known as the EVA-1100.
EVA purchased nearly 300 acres in the Epes Industrial Park in 2020 in order to build its wood pellet production plant. The park lies close to the Tombigbee River in Sumter County. In July 2022, the company started the construction work of its fully contracted Epes facility, which will have a nameplate capacity of 1.1 million metric tons per year. The plant will be operational by mid-2024, with ramped up production by 2025.
Benefits of the Project
Enviva plans to invest nearly $375 million for every newly constructed plant going forward, including the Epes plant. Once the facility becomes operational, it is expected to support jobs, including adjacent industries such as logging, trucking and shipping.
Pellets made at the Epes plant will be shipped to foreign markets, primarily those in Europe and Asia. This will help meet the international demand for reliable renewable energy sources that aid in defossilizing power and heat generation, as well as energy-intensive industries like steel, cement, lime and sustainable aviation fuels.
Advantages of Wood Pellets
Both Canada and the United States are major producers and exporters of wood pellets. The global demand for these pellets is expected to grow exponentially over the next few years. Enviva, the world’s largest producer of wood pellets, is planning to double its capacity from 6.2 million tons per annum (MTPA) to 13 MTPA by 2026.
Wood pellets are an eco-friendly fuel source that produces much lower emissions than fossil fuels. When burned, these pellets release only a small amount of carbon dioxide into the atmosphere, making them a cleaner fuel source. According to the Biomass Energy Resource Center, using wood pellets instead of fossil fuels can reduce greenhouse gas emissions up to 90%.
While the initial cost of installing a pellet boiler can be higher than a traditional oil or gas boiler, wood pellets are generally less expensive than fossil fuels. In addition, wood pellet prices are less volatile than oil and gas prices, which can fluctuate widely due to global supply and demand.
Therefore, by choosing wood pellets over fossil fuels, we can reduce our reliance on non-renewable energy sources and move toward a more sustainable future.
Price Performance
In the past month, shares of Enviva have risen 28% compared with the industry’s 17% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Enviva currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks from the same sector are Arcosa (ACA - Free Report) , Eagle Materials (EXP - Free Report) and Lennar (LEN - Free Report) , each sporting Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ACA’s 2023 earnings per share (EPS) indicates a year-over-year increase of 26.5%. It delivered an average earnings surprise of 59.9% in the last four quarters.
The Zacks Consensus Estimate for EXP’s 2023 EPS indicates a year-over-year improvement of 8.4%. It delivered an average earnings surprise of 6.5% in the last four quarters.
LEN’s long-term (three- to five-year) earnings growth rate is 6%. It delivered an average earnings surprise of 18.4% in the last four quarters.