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Rochester Top 100: Business heats up for wood pellet company

Rochester Business Journal
November 13, 2015


(Photo by Kimberly McKinzie)

The increasing popularity of alternative energy sources is great news for Biomaxx Inc.: The wood pellet manufacturer has seen its annual revenues and workforce increase over the last few years as more people turn to wood as a heat source.

Christian Modesti, Biomaxx president, said business has been strong.

“We are focused on growing,” he said.

Owned by private-equity firm DeltaPoint Capital Management LLC, Biomaxx was the first investment from DeltaPoint Capital IV L.P., a $60 million fund that includes $25 million from the New York State Common Retirement Fund.

Biomaxx came to be in 2010 when DeltaPoint acquired PA Pellets LLC of Ulysses, Pa. A year later, DeltaPoint acquired Dry Creek Products Inc. in Arcade, Wyoming County, around 100 miles from PA Pellets. Both are part of Biomaxx.

The business produces a variety of wood products, including wood pellets for residential heating fuel. Customers often use the pellets to heat their homes, garages and hunting cabins.

Biomass applications create clean and renewable energy that reduces dependence on foreign oil, Modesti said. It is a popular choice for those who live in rural areas, where connections to natural gas may be limited, and can be more cost-effective than other forms of heating sources, the company states.

The pellets are sold at retailers in the Northeast, primarily in New York and Pennsylvania, but also in Connecticut, Massachusetts and New Jersey.

Sales are projected to grow to $22.9 million this year, up from $19.4 million in 2014 and $15.9 million in 2013.

Biomaxx employs 51 workers, up from 43 last year. The business has five local workers in Perinton. The remaining employees are located in Arcade and Ulysses. Nearly all of the firm’s products are made at those two sites.

When Modesti came on board in 2012. Biomaxx was having financial challenges. Sales were $15.9 million in 2012, down from $16.7 million in 2011. Employment dropped over that same period from 77 workers in 2011 to 41 in 2012.

Modesti, a member of the Rochester Business Journal Forty Under 40 Class of 2002, is a veteran in the energy industry, having worked at Griffith Energy Services Inc., Energetix DE LLC and Rochester Gas & Electric Corp. Changes he implemented to help the business included selling some assets and creating a strong management team, he said.

Current challenges include working in a capital intensive business that requires substantial investments into facilities such as equipment upgrades. While the industry is fairly new, it is gaining in popularity, which has lead to more regulations that require more time and money spent, Modesti said.

Chairman George Yancey Jr. said the company has worked to increase the number of outlets where its pellets are sold. In addition, the number of wood pellet stoves being purchased increases each year.

“The convenience of pellet stoves versus traditional wood stoves is a strong attraction,” Yancey said.

Increasing demand for pellets in foreign markets, especially Europe, has taken some of the U.S. capacity, Yancey explained, which opens more potential customers for Biomaxx in the Northeast.

“The industry is just beginning to embrace bulk pellets for use in residential and commercial furnaces, and this will only grow the market,” he said. “We will continue to add to our dealer network and supply the growing demand from our other customers.”

Modesti said Biomaxx will continue to invest in its current facilities, taking steps to increase production, Modesti said.

“We want to create the best atmosphere for our employees and great products for our customers,” he said.

The Rochester Top 100 program is presented by the Rochester Business Alliance Inc. and KPMG LLP. Launched in 1987, it recognizes the fastest-growing private companies in Greater Rochester. The 2016 Rochester Top 100 event will be held Nov. 2. For more information, go to rochesterbusinessalliance.com.

Biomaxx Inc.
Wood pellet manufacturer
Year founded: 2010
2015 ranking: 96
Top executive: Christian Modesti, president
Current employment: 51
(five locally)
Headquarters: Perinton
Website: drycreekpellets.com

11/13/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.



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