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Firm Filling World's Need for Heating: American Energy Reaching Out From its Hutchinson Base

Pellet stove manufacturer American Energy Systems in Hutchinson MNThings are starting to heat up at American Energy Systems, the Hutchinson-based maker of biomass stoves and furnaces. Not only are Americans looking for ways to heat their homes and businesses with something less costly than natural gas, fuel oil and propane, but people in other countries are exploring their options, too. Increasingly, American Energy Systems is playing a role in filling that overseas need.

Two weeks ago, American Energy Systems hosted a delegation of 17 Austrians, including that western European country's minister of agriculture and finance. They were exploring options for home heating. While Austria imports most of its corn, it wants American Energy Systems founder Michael Haefner to research its more plentiful wood pellets and pumpkin seeds as potential fuels in the company's modified Magnum brand corn stoves.

"We've been approached by a number of countries about the biomass and corn-burning products we have," Haefner said last week. "Most are ahead of the United States in the use of biomass."
While Americans have been complaining about escalating prices for gasoline, natural gas, propane and fuel oil in recent years, the prices paid here would be considered bargains in many other countries.

"Natural gas is very difficult to get in Austria because of the terrain, and fuel oil is extremely high throughout Europe," Haefner said. "So the cost of heating is very high. They are looking to buy (alternatives)." The company is even working with Kenya to test the burning qualities of a charcoal-like coal made from coffee husks.

Submitted by Terry Davis
Hutchinson Leader Staff Writer


Going International

American Energy Systems, which Haefner founded in his native South Dakota in 1973 and moved to Hutchinson in 1984, is already a global company manufacturing through partners in Ireland, Asia and soon France. Its overseas operations usually involve setting up manufacturing within an overseas partner's existing factory. “We ship some production components over for assembly there, but eventually we look to manufacture in the countries," Haefner said. "We are helping to create a lot of new business and jobs worldwide in manufacturing and fuel delivery."

Finding labor overseas is not a problem. But in Hutchinson and throughout Minnesota, finding qualified, metal-working employees is becoming an increasing concern. He employs about 72 people in the company's 35,000- square-foot plant built a few years ago at the intersection of Michigan Street and Second Avenue Southeast. Haefner recently added a second shift.
Sales have grown about 500 percent during the past five years.

"Labor is our biggest challenge," he said. For that reason, the company now manufactures its line of stoves through a network of six manufacturing partners employing 150 people elsewhere in the state. But that hasn't stopped Haefner from planning a 22,000-square foot expansion of the production line, along with a 4,500-square foot expansion to the office area. Ground should be broken in the spring. Production is expected to increase to 75,000 units next year, double current levels.




Corn Still Economical Here

Haefner, chairman of the biomass appliance research committee of the Hearth, Patio and Barbecue Association, said corn is still an economical choice for heating even though it has gone up in cost because of demand by ethanol plants. Nor does he believe corn stove users need to fear that corn prices will increase so much further that it is no longer economical.

Even if it did, the stoves can burn other fuels. Canadian biomass stoves are fueled almost entirely by grains, such as wheat, barley, oats and rye because of low prices. Biomass fuels vary by region in the U.S., too, he said. Corn is readily available in the Midwest, but wood pellets are popular in the Northeast.

An average home would use about $600 worth of corn each heating season, burning about two-thirds of a bushel per day. That is compared to the average natural gas or fuel oil cost of about $2,000, Haefner said.  While economics is a major factor in favor of using biomass appliances that use domestic fuels, Haefner believes the best reason to consider using them is to protect our other fuel resources for other uses.

Workers at American Energy Systems put the finishing touches on a biomass-fueled hearth appliance at the company's plant in the Hutchinson industrial park. The factory is scheduled for a major expansion in 2007.

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