Dumond receives MFPC president’s ‘Supply Chain Award’
“I learned about halfway through my first year as Council president,” Jim Contino said at the MFPC banquet Sept. 18, “that one of the benefits was that during the annual meeting you get to give an award to whoever you want to for whatever you want it to be and it’s called the “President’s Award.” So this doesn’t really fit any category, but I would like to recognize today Eric Dumond from Waterville and this is a Supply Chain Award.
“I can’t figure out if I was mad at him or jealous of him, but I competed against his supply-chain antics when he was locking up the biomass supply chain into the ReEnergy plants at about the same time we were trying to start our biomass plants at the Bucksport mill. Those were some trying times. It was a much, much different market than what biomass is today, but still it’s worthy of recognition.”
“I think during his early career at Great Northern it was the norm to build close relations with logging company suppliers and he learned to develop trust with suppliers very early on. He started to sponsor the purchase of company-owned chippers and chip vans in exchange for production and supply commitments around 2004. That was pretty successful and they asked him to move to Waterville and work much the same magic in Stratton and Livermore Falls.
“It was a pretty neat program in that the company made initial capital cost payment, but as they completed that supply obligation, the ownership of the chipper was actually passed to the loggers themselves. So I thought it was a really ingenious way to expand the capacity of the supply chain at the same time that you’re spreading around the risk and the reward of the capital investment that it takes to make a system rise to the occasion.
“At that time in 2008 and 2009, if I remember right, the price of oil was about $120 a barrel and the biomass prices were very, very difficult, but I think that Eric probably did as good a job as anyone could have to lock up supplies for those plants during a time when they really needed to run.
“To accomplish this, Eric had to overcome reluctance from his company, bankers, loggers, vendors, insurance providers, and competitors. Commitments were both made and honored. Contracts were kept simple and plainly worded so they were clear to all parties involved.
“I think during this time a sense of pride really developed and evolved within his supply chain. I had never seen anybody take a biomass supply chain and get the SFI certification, but I think they did it not so much because their customers demanded it, but because they were proud of their supply chain and they had a really good thing. To this day, I’ve never heard of another energy-generating facility getting SFI certified. I think the vision for that was Eric’s and Eric alone.”
“The present program continues in Maine, Massachusetts, New York and New Brunswick with a total of over 100 active chippers, grinders, and forest harvesting equipment in a way that expands production capacity while spreading both the investment risk and equity across the supply chain.
“Eric, you have a proven ability to match up your best loggers with the equipment that fits their jobs and also to bring those equipment dealers pretty much to their knees from what I can tell. I think Eric was the largest chipper buyer in the Northeast for probably five years running and they had a dedicated position for his sales associate. So he got really good service for those chippers, I think.
“Eric feels lucky and privileged to have been a part of an industry that was growing and expanding during his career. Now that the energy markets have corrected with declining wood consumption across the board, Eric is actively engaged with Maine Wood Biomass Exports LLC, dedicated to locating export opportunities that will help the supply chain stresses of today.
“He feels this is a way to give something back to a great industry. With this in mind, please help me give something back to Eric as he accepts this award, which reads: “In recognition of supply chain excellence for woody biomass through a unique fuel chipper lease-to-own program that expanded production capacity to meet growing demand between 2001 and 2016. His common sense and hands-on approach expanded production capacity to meet this growing market demand. During this period, he became a force to be reckoned with – “The Biomass Czar.”
Eric Dumond’s reply: “Thank you very much Jim. This is an honor to be recognized. Little did I know when we got into the biomass that I would have the opportunity to put a program together. It all came about very simply. We were sitting in corporate in Montreal back in ’03-04. The owner was Boralax at the time and the chairman of the board asked one question: “How do we put chips in these biomass plants?” So after three cups of coffee I said, “Why don’t you buy them a chipper?” And he looked at me and he said, “Go do it.”
“From then on we purchased somewhere around $40 million worth of equipment through the almost 10 years we were doing the program and it worked out really well. Loggers were the proof of the pudding. They’re the ones who made this successful.
“And it’s interesting, but every logger that I met, sat with and talked to, we never did a credit check. We always went on their word. That meant a lot to me and in this industry in Maine, we still go by our word.
“One day we had somebody come in, an accountant, and this was under ReEnergy, probably about two years before I retired last year, and they said, “You know we went through all your accounts, all the contracts, all the payments, everything that was purchased, and you actually had a 95 percent success rate.”
“So I said, ‘Great. We did it. We did it right and we did it with the people on the ground, the people who are at the stump.’ They’re the most important to me. They’re the ones that made this happen.”