German Pellets non-solvency proceedings, the company keep the doors open and lights on

German Pellets Company claims its insolvency or so called inability to make operations connected with money. The insolvency proceedings were started against the company`s assets. The economic difficulties of the German Pellets Company GmbH were caused by the following factors: a significant fall of the prices for oil and oil products, the reduction of the proceeds from wood pellet production sector caused by two previous warm winters and thus two heating seasons without high demand for wood pellets. The last reason was low amounts of the investments by the company into the organization which deals with furnace production. Nonetheless, they say that this procedure will not become a barrier for the wood pellet sector development.

Insolvency statement by the German Pellets Company

On the 11th of February, 2016, the Limited Liability Company with headquarters in Germany German pellets made a statement concerning their business situation. First of all, the representatives of the company mentioned that a court of Germany made an appointment of the temporary non-solvency administrator. The appointment was made due to the started non-solvency proceedings against the funds of the German Pellets Company. The company also mentions that the court in Schwerin, Germany, which deals with non-solvency cases appointed for the position of temporary non-solvency administrator Bettina Schmudde. The above mentioned lawyer works for the White & Case firm. The announcement also takes note of the court`s resolution carried out on the 10th of February, which says that Bettina Schmudde received the task to grant the protection for the assets of the company. Moreover, the lawyer is obliged to make due diligence examination in order to find out whether there are reasonable causes to instigate insolvency proceedings and to make clear if the company is capable of existing in the future.

German Pellets

Despite the procedure of non-solvency proceedings, all the employers and workers of the company are guaranteed to receive salaries and wages for the next three months at the expense of compensation payments which will be made due to the non-solvency of the company. Moreover, the announcement says that the proclamation of claims cannot be conducted until the start of insolvency proceedings. The operation shall start at the beginning of May, 2016. Creditors are advised not to do any claims before the above mentioned date.

German pellets keeps its head high

On the previous day, the 10th of February, made a statement, that the intercessions made by the company to the court did not persuade it not to organize the process of restructuring the company through bankruptcy. The company also mentioned that it is going to continue conducting its financial and business operations during the preliminary non-solvency proceedings.

According to the German Pellets LLC, the financial problems of the company were caused by three most significant factors which are drastic fall of the prices for oil, not very high incomes from wood pellets caused by the two previous warm winters and, moreover, scant German Pellets investments in KAGO in 2010, which is a furnace producing company.

On the 27th of January the company issued a press-release which stated that the reduction of the price for oil and other fossil fuels is not potentially dangerous obstacle for the wood pellet market development. Moreover, the press release makes optimistic predictions. The German Pellets quoted company Hawkins Right, which deals with different kinds of consultations and is situated in London. The company makes forecasts that the wood pellet market will increase significantly from 29 million metric tons per year in 2015 up to 49 million metric tons per year in 2019.

Wood pellet market will face further growth

On the 27th of January German Pellets made a statement, in which they pointed out that power station business and the tendency of pellet-fuelled heating are actually spreading and gaining momentum worldwide. The United Nations Conference on Climate Change, which has taken place recently, must have become the starting point as certain resolutions considering the issue of global warming were taken and the general agreement to restrict and prevent global warming to below two degrees Celsius was made.

Thus, both the power station and the pellet-fuelled heating market now experience a constant growth and undergo changes. So far, such countries as Great Britain, Belgium and Denmark gave their preference to the usage of biomass instead of fossil fuels in electricity production. Moreover, Italy, Denmark, Germany, Austria and France tend to burn wood pellets in special systems of pellet-fired heating and stoves. Due to this fact, the market share of oil and gas as fossil fuels is gradually shrinking. A vivid example of constant wood pellet market development is the growth of popularity of biomass portals such as Such web portals offer a lot of handy and useful information on the market development tendencies, various events connected with biomass usage and many other useful options.


On the 11th of Fabruary by the German Energy wood and Pellet Association stated that the legal actions against German Pellets regarding insolvency are not expected to impact the domestic usage of pellets, that is, to cut it down. Another statement was issued by the organization at the end of January, in which they gave a short overview of the situation with the pellet industry in Germany in 2015. It was also explained that the prices for oil went down significantly last year because during that time around 16,000 boilers and furnaces operating on pellets were put to use in Germany. Still, it is far less than it had been planned, the number originally being 40, 000. In their statement, The German Energy wood and Pellet Association also urged the government to give more support to the promotion of pellet fuel and biomass heating.

Reference information

At the moment German Pellets runs two plants in the United States. Besides, it has got a port operation in Texas. One more plant, which is also situated in the state of Texas, has already reached its full capacity-500,000 metric tons per year. Moreover, the company has recently announced the beginning of the next stage of construction of its pellet plant in Louisiana, the annual capacity of which is growing – it has increased from 578,000 metric tons per year to 1.156 million metric tons per year. The representatives of German Pellets explain that they internationalize their production in the US and at the same time increase their profits as well as provide the constant and stable supply of pellet market in terms of the urgent need for a renewable source of energy on a global level. The company plans to keep on expanding and growing for the purpose of providing the society with a secure climate-friendly energy source with a fixed price.

Pellet plant

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The prices for wood pellets increased by 0,8 per cent in February 2015

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