A nearly $100 million factory to produce wood pellets is planned in west Alabama, where a similar large project was announced recently.

The Tuscaloosa-based Westervelt Co. is partnering with Canadian Pinnacle Renewable Energy to build a facility in the Marengo County city of Demopolis. The plant is set to start production in the first half of 2021.

News outlets reported that the plant will be located on the Tombigbee River so pellets can be loaded into barges and shipped to the main state port in Mobile.

Wood pellets are generally produced from scraps at lumber mills or branches and other woody material collected from forest floors.

The material is primarily used as fuel for heating sources in Europe, where wood is steadily being used as an alternative to coal for producing heat and electricity.

Pinnacle will have a 70 percent interest in the plant, along with 20 percent for Westervelt and 10 percent for Two Rivers Lumber Co. The plant, which will be adjacent to a sawmill, is expected to produce 360,000 metric tons of pellets per year.

“This new venture with Pinnacle and Two Rivers allows Westervelt to participate in a growing market while capturing the advantages of the abundant resources in this area,” Brian Luoma, chief executive of Westervelt, said in a statement.

State officials announced in October that the Maryland-based Enviva Partners plans to invest about $175 million on a wood pellet production plant in Sumter County. It will ship product on the Tennessee-Tombigbee Waterway from the Port of Epes.