The Mowbray business is converting timber off-cuts and sawdust from its hardwood products into wood pellets that can be used for heating.

Neville-Smith Forest Products chief executive Andrew Walker said the business was now converting all wastage.

“We’re now self sufficient. Historically, a lot of our waste was going to landfill; now we’ve got nothing going to landfill and we’ve created a value-added product,” he said.

Until now there has not been enough pellets to supply the Tasmanian pellet fire market and they were imported from Geelong.

“One of the problems in the domestic market is that is hasn’t been able to grow because there hasn’t been enough pellets,” Mr Walker said.

Pellet heaters are used in homes, but Mr Walker sees an opportunity to expand into the commercial heating market too.

“We are trying to create a new industry around heating within Tassie, not just for the domestic market, but for commercial buildings as well.”

The Mowbray pellet mill is a test case for Neville-Smith Forest Products, which is also looking at building a larger pellet mill in southern Tasmania to handle to timber residue from its Southwood operation.

“This is a pilot plan to test that it all stacks up,” Mr Walker said.

In a three-bedroom house a $15 pellet bag would last between one and two days.